Concerns among physicians about the future of healthcare have intensified following CMS finalizing a 2.83% physician pay cut Nov. 1.
The 2025 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System sets the physician fee schedule conversion factor for 2025 at $32.35, down from $33.29 in 2024.
"The CMS pay cut is a disgrace. As every industry in America is being forced to adjust their pricing due to the out of control inflation over the past 2-3 years, physicians are being hammered," Thomas Loftus, MD, neurosurgeon at the Austin (Texas) Neurosurgical Institute, told Becker's. "Not only are we not receiving inflation-adjusted increases in reimbursement, but the government is actually continuing to whittle away at our practice revenue overall."
Physician groups are raising concerns about how this cut will further impact physicians' ability to provide care.
"To put it bluntly, Medicare plans to pay us less while costs go up," American Medical Association President Bruce Scott, MD, said in a statement. "You don't have to be an economist to know that is an unsustainable trend, though one that has been going on for decades. For physician practices operating on small margins already, this means it is harder to acquire new equipment, harder to retain staff, harder to take on new Medicare patients, and harder to keep the doors open, particularly in rural and underserved areas."
AMGA, formerly known as the American Medical Group Association, echoed these statements.
"Five years of Medicare cuts is going to catch up with us," Jerry Penso, MD, President and CEO of AMGA, said in a statement. "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."
There is some movement in Congress to halt the pay cut. A bipartisan group of lawmakers in the House introduced a bill in October to reverse the cut. Rep. Greg Murphy, MD, R-N.C., joined by co-sponsors and hundreds of supporting medical groups, introduced the Medicare Patient Access and Practice Stabilization Act, which would give physicians a raise equivalent to half of the increase in the Medicare Economic Index.
"Our bipartisan legislation would not only prevent harmful cuts but also would adjust provider reimbursements for inflation," Rep. Jimmy Pancetta, D-Calif., said in an Oct. 29 news release from Rep. Murphy's office. "Such a law would expand seniors' access to quality healthcare by helping medical providers continue their care for Medicare beneficiaries."
The cut comes after CMS implemented a 1.25% reduction in overall physician reimbursement for 2024, setting the updated Medicare conversion factor at $32.74, a 3.4% drop from the previous year. Certain physicians also face additional financial setbacks of up to 9% due to the cost-performance category under the merit-based incentive payment system.
Physician reimbursement per Medicare patient dropped approximately 2.3% between 2005 and 2021, according to a study from the Harvey L. Neiman Health Policy Institute highlights that, when adjusted for inflation. While some specialties have seen an increase in reimbursement rates, 16 specialties experienced declines, with 13 of these seeing reduced payments even as patient volumes increased. Affected specialties include psychiatry, cardiology, urology, OB-GYN, internal medicine, pulmonology, radiology, gastroenterology and anesthesiology.
"There will be, and already has been for so many, a breaking point in which it no longer makes sense to practice medicine," Dr. Loftus said. "We will all become simple hospital or private equity employees with little autonomy. It is very possible that this is simply the way our government plans to take over healthcare without actually saying it out loud. Death by a thousand cuts."