Another Year, Another Medicare Fee Schedule, Another Cut to Physician Payment

2025 Medicare Physician Payment Rule Proposes Cut for 5th Straight Year

The Alliance of Specialty Medicine submitted detailed comments to the Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure on policy proposals included in the CY 2025 Medicare Physician Fee Schedule (MPFS) proposed rule. The Alliance, representing over 100,000 specialty physicians from 16 societies, highlighted several key concerns and made multiple recommendations to improve specialty care access through Medicare payment and policy.

Payment Proposals

The proposed rule proposes another sharp reduction in Medicare payments to physicians, estimated at 2.8%, due to the implementation of statutory requirements and regulatory changes. This is the 5th straight year that physicians will have to endure a cut. By contrast, CMS finalized sizeable increases in most other Medicare provider 2025 payment rates (e.g., inpatient hospitals (2.9%), inpatient rehabilitation facilities (3.0%), hospices (2.9%), and Medicare Advantage plans (3.7%). Like these other Medicare providers, physician practice costs have increased considerably over the past several years. The increased costs disproportionately impact practices serving small, rural, and underserved beneficiaries — yet physician updates do not meaningfully consider the impact of inflation.

In response to this cut, the Alliance called on CMS to collaborate with Congress on a permanent fix to ensure that physician payment rates reflect practice costs, emphasizing the impact of inflation over the last several years. Legislative fixes such as the Strengthening Medicare for Patients and Providers Act (HR 2474), the Provider Reimbursement Stability Act (HR 6371), and the Physician Fee Stabilization Act (HR 4935) have broad support from the physician community.

Quality Improvement

The Alliance expressed concerns about transitioning from the traditional Merit-Based Incentive Payment System (MIPS) to MIPS Value Pathways (MVPs), highlighting gaps in applicable measures for many specialties. Specialists urged CMS to retain flexibility for clinicians and avoid mandating subgroup reporting, which could burden multi-specialty practices without meaningful improvements in quality measurement. The Alliance also supported CMS’s proposal to revise the cost performance category scoring methodology, which would reward clinicians with median performance more fairly, and recommended that CMS retroactively apply these improvements to previous performance years or, at a minimum, zero out the weight of the cost category for prior years.

Next Steps

Congress is scheduled to reconvene after the November elections. This ‘lame duck’ session is expected to be quite busy, primarily focused on funding the federal government for the fiscal year 2025. The Alliance will advocate that Congress also address the scheduled 2.8% cut and ask that measures to stabilize future Medicare payment policies be prioritized when the new Congress begins in January. For further reading on the Alliance of Specialty Medicine’s views on Medicare payment, please see their letter to the Senate Finance Committee.