Doctors, facing another pay cut in 2025, call for permanent Medicare payment reform
November 2, 2024 – By Heather Landi
“There needs to be a systematic reform that makes Medicare payment rational, predictable and sustainable,” AMA president Bruce Scott, M.D. said.
The Centers for Medicare and Medicaid Services (CMS) is moving forward with a 2.9% cut to physician payments in 2025 despite protest from major industry groups.
CMS announced Friday it finalized the calendar year 2025 Medicare Physician Fee Schedule rule that sets payment rates for next year and also outlines new policies focused on primary care, preserved telehealth flexibilities and a strengthened Medicare Shared Savings Program (MSSP). A CMS fact sheet on the rule outlines the key provisions.
“The Medicare physician payment final rule continues our work to strengthen primary care while also supporting preventive care and promoting better access to behavioral health care. In addition, the final rule codifies and builds on guidance to continue our ability to use rebates from drug manufacturers to strengthen Medicare,” said HHS Secretary Xavier Becerra in a statement. “This is made possible by the Biden-Harris Administration’s historic prescription drug law, the Inflation Reduction Act. This rule ensures that everyone can get health care, regardless of the color of their skin, what language they speak, or where they were born. And, it encourages more participation in the Medicare Shared Savings Program by accountable care organizations serving people in rural and underserved communities – to the benefit of millions.”
But, provider groups were quick to condemn CMS’ decision to go ahead with the pay cut, which was proposed in the draft rule released in July.
Under the rule, which is 3,088 pages long, the average payment rates will be reduced by 2.93% in 2025, compared to the average amount these services were paid for most of calendar year 2024, CMS said.
That number incorporates statutory requirements that adjustments be “budget neutral,” the expiration of a 2.93% bump included in calendar year 2024 and a small budget neutrality adjustment necessary to account for changes in valuation for particular services, CMS said.
Together, this places the proposed rule’s conversion factor—or the number of dollars Medicare pays per RVU—at $32.35—2.83% lower than calendar year 2024’s $33.29.
