CMS floats 2.8% physician pay cut

CMS has proposed a 2.8% conversion factor reduction to its physician fee schedule for 2025. 

The decrease includes requirements that adjustments be budget neutral, the expiration of a 2.93% bump in 2024 and an adjustment related to the work relative value unit portion, according to a July 10 news release from CMS.

These inclusions set the proposed physician fee schedule conversion factor for 2025 at $32.36, down 3.34% from $33.29 in 2024. 

“Medicare physician reimbursement is on a dire trajectory and these ongoing cuts continue to undermine the ability of medical practices to keep their doors open and function effectively. — the need for comprehensive reform is paramount," Medical Group Management Association Senior Vice President of Government Affairs Anders Gilberg said in a statement.

According to research from the American Medical Association, Medicare physician payment declined 29% from 2001 to 2024 without accounting for the most recent cut. 

"Physician practices cannot continue to absorb rising costs while their payment rates dwindle," American Medical Association President Bruce Scott, MD, said in a statement. "The death by a thousand cuts continues. Rural physicians and those treating underserved populations see this CMS warning as another reminder of the painful challenges they face in keeping their practices open and providing care. It’s crucial that we ensure both continue."

On July 10, CMS also shared a proposed Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System rule that would update payments by 2.6%.

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