Bipartisan legislation aims to block Medicare cuts, boost physician pay in 2025

Physicians and other healthcare practitioners may get a pay boost in 2025 through a bipartisan bill introduced in Congress on Tuesday. 

The proposed bill seeks to block planned Medicare pay cuts next year and would provide the first inflationary update to physician pay in years.

The Medicare Patient Access and Practice Stabilization Act would counteract the 2.8% cut to the conversion factor proposed by the Centers for Medicare and Medicaid Services (CMS) in the draft CY2025 Physician Fee Schedule. A stop-gap pay fix is usually enacted by Congress at the end of the year. 

However, the proposed one-year pay fix includes an additional 1.93% pay increase, which is roughly equivalent to half of the current Medicare Economic Index, the measure of inflation for physician practice cost. The total fix offered in the discussion draft is a 4.73% increase to current pay rates.

The bill was co-led by Reps. Greg Murphy, M.D. (R-N.C.), Jimmy Panetta (D-Calif.), Mariannette Miller-Meeks (R-Iowa), Ami Bera, M.D. (D-Calif.), Larry Bucshon, M.D. (R-Ind.), Kim Schrier, M.D. (D-Wash.), John Joyce, M.D., (R-Pa.) and Raul Ruiz, M.D. (D-Calif.).

A statement by Murphy’s office cites the American Medical Association’s analysis that physician pay has declined by 29% since 2001, through annual cuts to reimbursement and rising inflation.

"America's physicians are at a breaking point and access to high-quality, affordable care is at risk for millions of Medicare patients," Murphy said in a statement. "When a physician sees a Medicare patient, they do so out of the goodness of their heart, not because it makes financial sense. Medical inflation is much higher and the cost of seeing patients continues to rise. Unfortunately, reimbursements continue to decline, putting immense pressure on doctors to retire, close their practices, forgo seeing new Medicare patients, or seek a less efficient employment position. This bipartisan legislation would stop yet another year of reimbursement cuts, give them a slight inflationary adjustment, and protect Medicare for physicians and patients alike."

Jeffrey Davis, health policy director at McDermott+Consulting, said Congress recognized that it would take more than plugging the 2.8% cut proposed by CMS to counteract the annual pay cuts. Davis said the Medicare Patient Access and Practice Stabilization Act is the first nod to inflation doctors have gotten in years.

There are other bills in Congress that would make regular MEI adjustments to physician pay, but those bills have yet to pass. 

The final CY2025 Physician Fee Schedule is expected to drop in a matter of days. The final cut to the conversion factor may vary slightly from the proposed 2.8% cut, Davis said.

Depending on the final conversion factor cut, Congress may adjust the 4.73% pay raise.

“The introduction today of a bill to stop the ruinous Medicare payment cut that is scheduled to go into effect Jan. 1 is a vital sign that Congress is poised to act," Bruce Scott, president of the American Medical Association, said Tuesday in a statement. "Lawmakers must take action during the lame-duck session."