AMA-backed bill seeks to stop 2.83% Medicare payment cut

A new bill introduced by a bipartisan group of 10 House members once again attempts to stop the 2.83% Medicare payment cut that went into effect this year.

Physicians paid under the Medicare Physician Fee Schedule have faced the payment cut since Jan. 1, 2025, per a rule finalized by CMS in November 2024. The rule also eliminated the temporary 2.93% increase in Medicare payment under the fee schedule as required by the statute. Altogether, the rule decreased the rate conversion factor by $0.94 versus CY 2024's conversion factor.

Physician associations have criticized the final rule's payment cuts. They argue that a 2.83% reduction in physician reimbursements fosters an unsustainable environment for providers and practices, both of which have experienced Medicare rate reductions several years in a row, as well as a myriad of financial challenges, including higher practice expenses and workforce shortages.

The bill, Medicare Patient Access and Practice Stabilization Act, instead would roll back the Medicare payment cuts and provide a 2% increase to physician reimbursements under the fee schedule. If passed, provisions of the legislation would go into effect on April 1, 2025.

"The future of private practice medicine, the most cost-efficient and personalized care, is in dire straits. This bipartisan legislation prevents further cuts, provides a modest inflationary adjustment to help ease the cost of care, and ensures Medicare remains viable for both doctors and patients," said Congressman Greg Murphy, M.D. (R-NC), who reintroduced the bill after Congress did not address the Medicare payment cuts in its recent lame duck session.

The American Medical Association (AMA) said it strongly supports the legislation and wants it included in upcoming legislation to fund the federal government beyond the Mar. 14 statutory deadline.

"This legislation would begin to roll back the cuts physician practices have faced over the last four years while we all have experienced high inflation," stated Bruce A. Scott, M.D., president of the AMA. "As evidenced by this bipartisan legislation, lawmakers know the trend is unsustainable and, if left unaddressed, will ultimately harm their constituents. Patient access to care and practice sustainability are not partisan or geographical issues. It's an urgent national issue that demands immediate attention from Congress."

AMA found that Medicare payments to physician practices have fallen by 33% since 2001 when adjusted for inflation -- an issue Murphy also identified as a problem for physicians already facing Medicare payment cuts. Meanwhile, practice expenses have increased by 59%, according to the AMA.

The Medical Group Management Association also came out to support the bill, urging its swift passage.

"Physician practices are now a month into the new year, facing uncertainty and financial shortfalls from the congressional failure to reverse the 2025 Medicare fee schedule cuts," said Emily Dowsett, director of policy communications at MGMA. "These cuts have negatively impacted the viability of their Medicare business, commercial contracts tied to Medicare rates, as well as Medicaid reimbursement in states that use Medicare as a benchmark."

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.