CMS Cuts Medicare Reimbursement Again by Nearly 3%; Physicians Urged to Reach Out to Congress

November 7, 2024

The 2025 Medicare conversion factor will decrease for the fifth straight year by approximately 2.83%, the Centers for Medicare & Medicaid Services (CMS) announced on November 1.  

This cut is largely the result of the expiration of a 2.93% temporary update to the conversion factor at the end of 2024 and a 0% baseline update for 2025 under the Medicare Access and CHIP Reauthorization Act. Unfortunately, these cuts coincide with ongoing growth in the cost to practice medicine as CMS projects the increase in the Medicare Economic Index (MEI) for 2025 will be 3.5 percent.   

“Physician practices can’t continue to absorb these increased costs while payment rates continue to decrease,” said MMA President Edwin Bogonko, MD, MBA. “It’s just not sustainable. Congress needs to fix this.” 

Both the Medicare Payment Advisory Commission and the Medicare Trustees have issued warnings about access to care problems for America’s seniors and persons with disabilities if the gap between what Medicare pays physicians and what it costs to provide high-quality care continue to grow.  

The MMA, AMA and other groups in organized medicine are strongly supporting the bipartisan H.R. 10073, Medicare Patient Access and Practice Stabilization Act of 2024, which would stop the cut, increase physician payment by one-half of the MEI, and result in a 12-month payment update of 4.73 percent.  

This bill comes on the heels of 233 bipartisan members of Congress (140 Democrats, 93 Republicans) co-signing a letter to House leadership that requested the latest round of cuts be replaced with a payment update that reflects inflationary pressures on physician practices. All physicians are urged to ask their representatives to cosponsor H.R. 10073.     

The text of the final rule can be accessed here.