Independent physicians have faced an uphill battle for decades as reimbursement rates decline below the cost of running a practice and persistent administrative burdens continue to wear physicians’ patience thin.
David Eagle, MD, president of the American Independent Medical Practice Association, recently joined Becker’s to discuss the challenges that independent physicians faced in 2025 and where AIMPA’s advocacy will be targeted in the year ahead.
Regulatory burdens
Dr. Eagle has been in practice for over 20 years and has seen various waves of burdensome regulatory and administrative requirements. For 2025, he named the Medicare Merit-based Incentive Payment System as one of the top regulatory burdens facing independent physicians.
MIPS ties clinician payments to performance, theoretically rewarding quality and penalizing poor outcomes through a performance-based framework in CMS’ Quality Payment Program. There has been significant back and forth between CMS and physician advocacy groups in recent years regarding the points threshold and other aspects of the program.
A June 2025 report by the American Medical Association found that small, rural practices faced disproportionate penalties from MIPS. While 86% of MIPS-eligible physicians avoided penalties in 2025, three practice types were overrepresented among the remaining 14% who were penalized by the program: Solo physicians, small practices and rural practices.
“Meeting MIPS requirements is a big deal, and it’s hard, and there’s really not much reward for that,” Dr. Eagle said.
Competition
Dr. Eagle said that the “unlevel playing field” of healthcare competition is another element pushing physicians out of private practice.
“Our hospital competitors get paid under a different schedule than independent physicians; and frankly, they get paid more,” he said. “They get paid facility fees. They negotiate higher commercial contracts because they generally are much more consolidated in their local markets.”
In 2024, at least 47% of physicians were employed by or affiliated with hospital systems, an increase from about 30% in 2012, according to an October report from the Government Accountability Office. Meanwhile, just 42% of physicians worked in private practice in 2024, down from 60% in 2012.
Corporate entities, including payers and private equity-backed firms, employed 23% of physicians in 2024, up from 15% in 2019. Within that group, about 6.5% of physicians practiced in private equity-owned organizations, compared to 4.5% in 2022.
Reimbursement
In November, CMS issued its final policy changes for Medicare payments under the Physician Fee Schedule — including a 3.77% increase from the current conversion factor.
While on its face the increase may seem like a step in the right direction, physicians told Becker’s that it still falls short of what most independent physicians need to run their practice.
“Adjusted for inflation, the reimbursement for physicians has gone down about 26% over the last 20 years, and that’s just unsustainable,” Dr. Eagle said. “So when you add all three of those things together, you see this shift from independent practice into the hospital setting, and that’s just what’s happened over the last 15 to 20 years.”
