CMS proposes 2.8% pay cut for providers in 2025
The Centers for Medicare & Medicaid Services (CMS) has released a proposed change to the physician fee schedule and Medicare Part B reimbursement that would effectively cut provider pay.
CMS is seeking a 2.8% reduction to the conversion factor used to determine Medicare reimbursement for 2025, an adjustment to payments made based on the need for physician services in local markets. It is not uncommon for CMS to propose a cut to the conversion rate. According to the American Medical Association, the regulatory agency has done so for five straight years.
The average payment rate to physicians is suggested to be reduced by 2.93% in 2025 under the proposed fee schedule change, CMS confirmed in an announcement.
The news has not been well received by the Medical Group Management Association (MGMA). In a statement sent to HealthExec, the organization said the updated fee schedule had “dangerous implications” and “would be alarming in the best circumstances” but is made worse by the rising cost of care delivery.
About 92% of medical groups are experiencing higher operating costs or financial struggles that threaten their practice, according to a report from MGMA. The group called the proposal by CMS “shortsighted” in light of the current economic landscape.
“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,” MGMA said.
Congress has stepped in to reduce the blow of previous proposed cuts to the physician fee schedule and Medicare reimbursement. The proposal by CMS awaits public comment and has yet to be finalized.
“MGMA is once again calling on Congress to pass the Strengthening Medicare for Patients and Providers Act to implement an annual inflation-based physician payment update tied to the Medicare Economic Index, and modernize Medicare’s antiquated budget neutrality policies by enacting the Provider Reimbursement Stability Act,” the statement from MGMA concluded.
The full proposal from CMS can be found here.
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