CMS Finalizes 2.9% Cut to Physician Payments

The Centers for Medicare and Medicaid Services (CMS) has finalized a 2.9% cut to physician payments for 2025, a decision met with significant opposition from industry groups like the American Medical Association (AMA), which warns this will negatively impact access to care, especially in rural areas. The reduction follows a trend of decreased payments, totaling 29% since 2001, despite rising operating costs for providers, estimated at 3.5% for the upcoming year. While Congress is reportedly working on a bill to avert these cuts and provide a partial inflationary increase, the lack of automatic adjustments in the Medicare fee schedule exacerbates the financial strain on physicians. CMS's decision affects various healthcare providers, including therapists and those billing for nursing home services, who are also facing increased operational challenges. Additionally, while outpatient services will see a slight increase in payments, the overall financial landscape for providers remains precarious. The AMA and other advocacy groups are urging Congress for immediate action to address these cuts and the need for comprehensive reform of the Medicare payment system.