On January 1, 2025, a 2.8% cut to the Medicare Physician Fee Schedule went into effect, marking the fifth consecutive year of reduced physician payments. When adjusted for medical practice inflation, this reduction equates to a 6.3% loss in real income for physicians, exacerbating an already dire situation in the healthcare system.
Physicians nationwide struggle to stay afloat as rising operational costs and declining reimbursement rates push many to consider early retirement, reduce their Medicare caseloads, or close their practices altogether. This circumstance has left millions of Americans without timely access to care, particularly the elderly and chronically ill who depend on Medicare services.
In response, a bipartisan group of lawmakers has introduced HR 879 – The Patient Access and Practice Stabilization Act to prevent further damage. The bill, spearheaded by Congressman Jimmy Panetta (D-CA) and co-sponsored by a coalition of physicians in Congress, would stop the 2.8% cut from January 1 through December 31, 2025. Additionally, it proposes a 2% inflation update, partially offsetting the 3.5% increase in medical practice costs.
“Medicare payments to physicians haven’t kept pace with economic realities or the rising costs of healthcare,” explained Rep. Panetta. “By passing this bipartisan legislation, we will protect seniors’ access to quality care and support the providers who make it possible.”
Physician-legislators echoed Panetta’s concerns, emphasizing the need for stability in Medicare payments. “Without inflationary updates, physicians have faced unsustainable cuts, undermining their ability to provide care,” said Rep. Ami Bera, M.D. (D-CA). “This bill will create a more secure Medicare payment system, allowing healthcare professionals to focus on their patients rather than financial survival.”
Over the last two decades, Medicare payment rates have fallen by 33% when adjusted for the cost of running a medical practice. This ongoing financial squeeze has led the California Medical Association (CMA) and the AMA Federation of Medical Associations to urge Congress to include HR 879 in the March legislative package to prevent further closures of physician practices.
The upcoming package, which will fund the government past March 14, is expected to address several healthcare priorities, including the extension of pandemic-era telehealth waivers. Physicians are encouraged to contact their congressional representatives to support and co-sponsor HR 879, emphasizing the urgent need to stabilize Medicare payments for the future of patient care.
