The American Medical Association supports the Medicare Patient Access and Practice Stabilization Act of 2025 that would temporarily reverse the 2.83% payment cut to physicians and apply a 2% update to Medicare payments.
What happened
The American Medical Association announced its strong support for the Medicare Patient Access and Practice Stabilization Act of 2025. The bill would reverse the 2.83% payment cut to physicians that went into effect in January. Senate bill S.1640 and its House counterpart H.R. 879 would reverse the cut and apply a 2% update to the Medicare Physician Fee Schedule Conversion Factor from June through December 2025. The AMA had previously objected to the January cut and stressed for legislation to be included in last year's spending package to prevent the physician pay decrease. Sen. Dr. Robert Marshall, D-Ks, introduced the Senate version of the bill.
What was said
In a May letter to Sen. Dr. Robert Marshall, the AMA said the bill "takes a meaningful step toward reestablishing Medicare payment stability" after five consecutive years of payment cuts.
Dr. James L. Madara, the AMA's then executive vice president and CEO, stated in the letter: "By fully reversing the 2.83% cut and applying a 2% update to the MPFS conversion factor from June through December 2025, S. 1640 offers physician practices a temporary but important reprieve. It allows practices to better weather inflationary cost pressures while Congress works toward the long-term structural reform that Medicare urgently requires."
The 2024 Medicare Trustees report said that "absent a change in the delivery system or level of update by subsequent legislation, the trustees expect access to Medicare-participating physicians to become a significant issue in the long term," according to the AMA.
By the numbers
- 2.83% payment cut went into effect in January 2025
- 2% proposed update to Medicare Physician Fee Schedule from June-December 2025
- 33% decline in Medicare physician payments since 2001 when adjusted for inflation
- 5 consecutive years of payment cuts to physicians
In the know
The Medicare Physician Fee Schedule (MPFS) Conversion Factor determines how much Medicare pays physicians for their services. Updates to this factor directly impact physician reimbursement rates. The Medicare Payment Advisory Commission (MedPAC) provides independent advice to Congress on Medicare payment policies and recently voted to urge Congress to link Medicare payment updates for physician practices to the growth in the cost of providing care.
Why it matters
This legislation addresses an issue threatening physician participation in Medicare. With payments declining 33% since 2001 when adjusted for inflation, and the Medicare Trustees warning that physician access could become "a significant issue in the long term," this bill represents an intervention. The timing is important as the Medicare Payment Advisory Commission has recognized that current payment structures don't reflect the actual costs of providing care, potentially driving physicians away from accepting Medicare patients and limiting healthcare access for millions of beneficiaries.
The bottom line
While this bill provides temporary relief, the AMA emphasizes that long-term structural reform of Medicare physician payments remains urgently needed. Healthcare organizations should monitor this legislation's progress as it could impact physician participation in Medicare and ultimately affect patient access to care.
FAQs
How would the 2% increase affect small, rural, or independent physician practices differently?
Smaller or rural practices may feel more immediate relief from the increase but still face challenges without permanent reform.
Will this proposed bill affect Medicare Advantage or only traditional Medicare?
The legislation targets traditional Medicare payments under the Physician Fee Schedule.
How do payment cuts and increases impact physician retention and recruitment?
Sustained cuts may discourage new physicians from entering Medicare and push current ones to limit participation.
What role does MedPAC play in influencing or shaping Medicare legislation like this bill?
MedPAC provides advisory recommendations to Congress, such as aligning payments with actual care costs.
