The Centers for Medicare and Medicaid Services (CMS) has released the 2025 Medicare Physician Fee Schedule (PFS) Final Rule confirming a 2.83 percent cut to the Medicare physician fee schedule conversion factor next year — the fifth straight year the conversion factor is set to decrease — unless Congress intervenes with passage of critical legislation.

This cut is largely the result of the expiration at the end of 2024 of a 2.93 percent temporary update to the conversion factor provided by Congress and a 0 percent baseline update for 2025 under the Medicare Access and CHIP Reauthorization Act (MACRA). This cut coincides with ongoing growth in the cost of practicing medicine as CMS projects the increase in the Medicare Economic Index (MEI) for 2025 will be 3.5 percent.

The Medicare physician payment system is broken. Systemic issues, such as the negative impact of the Medicare PFS’s budget neutrality requirements and the lack of an annual inflationary update will continue to generate significant instability for physicians moving forward. 

Recently, Reps. Greg Murphy, MD (R-NC) and Jimmy Panetta (D-CA) introduced the "Medicare Patient Access and Practice Stabilization Act" (H.R. 10073). This bipartisan legislation seeks to eliminate the looming  cut and provide a 1.8 percent payment update in 2025, an actual payment increase equal to one half the Medicare Economic Index, helping to stabilize physician practices and protecting patients' access to care. ACOI has endorsed this legislation because it will provide temporary relief to physicians from the impending pay cut while work continues on reforming the Medicare physician payment system. 

Time is running out – there are few legislative days left before the end of the year with Congress expected to conduct a "lame duck" session after the elections. This will be the last opportunity for Congress to pass H.R. 10073 as part of any final year-end package.

Take action now.