CMS Physician Fee Schedule Provokes Protests Among Providers
The finalized calendar-year 2025 Medicare Physician Fee Schedule, which the Centers for Medicare & Medicaid Services (CMS) released on Nov.1, is provoking considerable protest from the national associations representing physicians and other providers.
In a press release posted to the agency’s website on Friday, the agency noted that, “By factors specified in law, average payment rates under the PFS will be reduced by 2.93% in CY 2025, compared to the average amount these services were paid for most of CY 2024. The change to the PFS conversion factor incorporates the 0% overall update required by statute, the expiration of the temporary 2.93-percent increase in payment for CY 2024 required by statute, and a relatively small estimated 0.02-percent adjustment necessary to account for changes in work relative value units (RVUs) for some services. This amounts to an estimated CY 2025 PFS conversion factor of $32.35, a decrease of $0.94 (or 2.83%) from the current CY 2024 conversion factor of $33.29.”
The agency noted that “The CY 2025 PFS final rule is one of several final rules that reflect a broader Administration-wide strategy to create a more equitable health care system that results in better accessibility, quality, affordability, empowerment, and innovation for all Medicare beneficiaries.”
But every major national provider association came out with a largely negative assessment on Friday, Nov. 1.
The leaders of APG, the Washington, D.C.-based America’s Physician Groups, posted a news release on Friday with a statement that began, “The publication of the Medicare Physician Fee Schedule (MPFS) final rule today leaves in place proposed physician fee cuts for 2025 and in fact bumps them slightly higher, to 2.93 percent, as a result of other changes in the fee schedule. ‘We are disappointed,’ said Susan Dentzer, President and CEO of America’s Physician Groups. ‘Any action to blunt the crippling effect of the fee cuts will now be the responsibility of Congress.’”
The association’s statement went on to note that, “As widely reported, inflation-adjusted Medicare physician fees have fallen by 29 percent since 2001 due to fee schedule changes and the lack of a full update for medical practice inflation. APG looks forward to working with congressional policymakers in the coming weeks and months to shape plans for moderating the proposed fee cut, and ideally, eliminating it altogether. Other aspects of the final MPFS rule are far more favorable for physician practices and APG member organizations,” APG noted, quoting Dentzer as stating that “We welcome such measures as allowing eligible Accountable Care Organizations (ACOs) with a history of success in the Medicare Shared Savings Program, including many of our member groups, to receive advances on their earned shared savings.” Also beneficial “will be new coding and payment policies for advanced primary care management services that, as CMS noted, will constitute a new pathway to accountable care built into the fee schedule, and will help to increase the number of smaller physician practices committed to value-based care,” the association stated.
Leaders at the Alexandria, Va.-based AMGA (American Medical Group Association) also expressed disappointment. The association’s statement was published as a press release posted to its website on Friday. It began thus: “AMGA today objected to a looming 2.83-percent cut in the Medicare conversion factor,” AMGA’s statement began. “As finalized in the 2025 Medicare Physician Fee Schedule, the cut may force AMGA members to lay off staff and clinicians, further exacerbating patient access to care; not accept new Medicare beneficiaries as patients; and delay investments in social drivers of health,” AMGA stated in a press release on Friday.
“Despite a projected 3.6-percent increase in the Medicare Economic Index, which measures inflation in medical practice costs, the Centers for Medicare & Medicaid Services (CMS) finalized the cut of 2.83 percent in the Medicare conversion factor,” the statement continued. “This cut demonstrates the flaws in how Medicare reimburses Part B care and services. Specifically, the lack of an inflationary update in Part B reimbursement creates an unsustainable situation for AMGA members, who are facing a fifth consecutive year of lower Medicare reimbursement for physician and other clinician services.”
And AMGA quoted its president and CEO, Jerry Penso, M.D., as stating that “Our member survey paints a pretty bleak picture. If Congress does not stabilize reimbursement, our members will be forced to take further action that will impact patient care.” Per that outlook, the association said that “AMGA recently surveyed its membership on what actions these Medicare cuts have forced them to take this year and what actions they will take in the future. For instance, 45 percent of respondents reported they will be forced to furlough non-clinical staff. But, the layoffs may be larger, as 31 percent indicated layoffs of clinical staff would be necessary. These layoffs will have an effect on access to care, as 27% said they would not accept new Medicare beneficiaries as patients. The survey is available on the AMGA website.
“Five years of Medicare cuts is going to catch up with us,” Penso said. “To keep the doors open, AMGA members are going to need to cut staff and reduce access to care for Medicare patients. The only real question is if Congress will come together to prevent this.” And AMGA added that, “Now that CMS has finalized this cut, Congress must act to prevent it from taking effect on January 1, 2025.”
The leaders at MGMA, the Englewood, Colo.-based Medical Group Management Association, released the following statement: ““CMS and Congress have once again overlooked the sobering financial realities facing our nation's medical practices, finalizing a 2.83% reduction to the 2025 Medicare conversion factor, further increasing the gap between practice expenses and reimbursement rates. Today's final rule throws the financial viability of physician practices into question and threatens beneficiary access to care. On a positive note, we are pleased CMS heeded our call to finalize numerous telehealth policies, such as permanently covering audio-only services and extending flexibilities for direct supervision and home address reporting for practitioners. Congress must immediately return from recess to pass H.R. 10073, averting the 2025 cut to the conversion factor and stabilizing physician practices until a more permanent, sustainable solution to the Medicare physician payment system can be realized.”
Meanwhile, NAACOS, the Washington, D.C.-based National Association of ACOs, the national association representing accountable care organizations, released a statement on Friday, attributed to Aisha Pittman, its senior vice president of government affairs. “The National Association of ACOs (NAACOS) commends CMS for its ongoing efforts to support ACOs by finalizing policies that protect against significant and unusual billing anomalies, thus fostering long-term stability and certainty for ACOs,” Pittman said. “We are encouraged by CMS’s commitment to advancing the Medicare Shared Savings Program, particularly through reducing the burden of beneficiary notifications, offering prepaid savings for successful ACOs, incorporating upward benchmark adjustments for ACOs serving rural and underserved populations, and establishing billing for advanced primary care.”
Further, the statement from Pittman continued, “While we welcome these advancements, we remain concerned about unresolved issues that threaten ACO participation in the Shared Savings Program. Historically successful ACOs are faced with increasingly reduced financial targets over time. Current policies fail to adequately account for prior success, leaving ACOs unable to sustain robust clinical interventions and enhanced benefits for beneficiaries. Additionally, new quality reporting requirements will necessitate costly technology investments without producing actionable quality data. These challenges discourage clinician participation in ACOs and hinder progress toward CMS’ goal of all Medicare payments in an accountable care relationship by 2030.”
And leaders at the Charlotte-based Premier Inc. also released a statement attributed to Soumi Saha, the alliance’s senior vice president of public affairs, posted to the Premier website on Friday. In it, Saha said that “Premier is profoundly disappointed that the Centers for Medicare & Medicaid Services’ (CMS) latest updates to the calendar year (CY) 2025 payment rules will further widen the gap between Medicare reimbursements and the actual operational costs healthcare providers shoulder daily. Providers are grappling with rising inflation, labor shortages and the demands of an aging population—challenges CMS fails to adequately address. This update misses the mark, failing to recognize the real cost pressures providers face—particularly labor. It’s time CMS adopted more realistic methodologies and data sources to keep up with these escalating challenges. If CMS continues to implement payment updates of this nature, the future of American healthcare will be jeopardized,” Saha said.
