Medicare physician fee schedule cuts conversion factor in 2025 with ‘dangerous implications’ for patient care
The Centers for Medicare & Medicaid Services on Wednesday released the 2025 physician fee schedule, which includes a proposed cut to the conversion factor, among other changes.
CMS is suggesting a 2.8% reduction to the CF, a multiplier used to convert geographically adjusted relative value units to determine Medicare payment for physician services. The Medical Group Management Association commented on the proposal July 10, asserting that it will have “dangerous implications” for practices in radiology and other specialties.
Doc payment reductions would be “alarming in the best circumstances,” but doing so when 92% of medical groups are reporting increased operating costs is “critically shortsighted.”
“Medicare physician reimbursement is on a dire trajectory and these ongoing cuts continue to undermine the ability of medical practices to keep their doors open and function effectively—the need for comprehensive reform is paramount,” said Anders Gilberg, senior VP of government affairs for the association, which represents over 15,000 group medical practices in radiology and other specialties. “MGMA is once again calling on Congress to pass the Strengthening Medicare for Patients and Providers Act to implement an annual inflation-based physician payment update tied to the Medicare Economic Index and modernize Medicare’s antiquated budget neutrality policies by enacting the Provider Reimbursement Stability Act.”
Average payment rates under the fee schedule are proposed to be reduced by 2.93% in 2025 compared to the average amount paid by Medicare last year, CMS said in its announcement. The conversion factor change incorporates a 0% overall update as required by federal statutes, the expiration of the 2.93% increase in payment for 2024, and a “small adjustment” to account for changes in the valuation for the work RVU portion of services. This amounts to a proposed CF of $32.36, a decrease of $0.93 (0r 2.8%) from the 2024 figure of $33.29. The combined impact on total allowed charges would amount to -2% for interventional radiology and 0% for both diagnostic imaging and radiation oncology, according to the proposed rule. Nuclear medicine, meanwhile, would see a 1% increase.
The Radiology Business Management Association similarly slammed the proposed cut in a statement issued late Wednesday.
“A 2.8% reduction in physician reimbursement will have a direct and detrimental impact on patient access to essential radiology services,” RBMA Co-executive Director Linda Wilgus, MBA, told Radiology Business. “Amid record inflation and an escalating physician shortage that has only been compounded by years of cuts, the sustainability of our healthcare system is at risk. This reduction not only threatens the financial stability of radiology practices but also compromises the quality of care patients receive. Furthermore, it forces consolidation within the industry, thereby limiting patient choice and reducing competition. We urgently call on Congress to act decisively to protect our Medicare program and ensure access to high-quality healthcare for all beneficiaries."
For more on the rule, you can read CMS’ formal news announcement and corresponding fact sheet.
More responses
Several radiology stakeholders shared feedback about the 2025 MPFS after the initial Radiology Business story was published Wednesday. Here is a brief sampling of their comments:
- "The overall conversion factor reduction once again demonstrates that the current Medicare payment system is not sustainable. ACR will continue to work with Congress to encourage substantive changes to the Medicare physician payment system to ensure patients continue to have access to high quality care." —The American College of Radiology
- “SIR has begun its analysis of the newly released 2025 MPFS proposed rule, but early indications are that IR reimbursement is being cut to bolster increases to other specialties. Such cuts make it difficult for interventional radiologists to continue to operate and deliver care to patients in need of IR services. We intend to submit comments by the Sept. 9 deadline outlining how CMS’s decisions to continue to reduce physician payments overall, and to IR specifically, will negatively impact patients." —Society of Interventional Radiology President Robert Lewandowski, MD
- “The declines in reimbursement for radiation therapy services for people with cancer under the Medicare Physician Fee Schedule are disappointing. We are concerned that CMS continues to undervalue the impact of cost-effective radiation treatments for cancer and urge Congress to act on bipartisan radiation oncology payment reform legislation this year." —Jeff M. Michalski, MD, MBA, chair of the American Society for Radiation Oncology Board of Directors
- "With CMS estimating a fifth consecutive year of Medicare payment reductions—this time by 2.8%— it’s evident that Congress must solve this problem. In addition to the cut, CMS predicts that the Medicare Economic Index—the measure of practice cost inflation—will increase by 3.6%. Facing this widening gap between what Medicare pays physicians and the cost of delivering quality care to patients, physicians are urging Congress to pass a reform package that would permanently strengthen Medicare." —American Medical Association President Bruce A. Scott, MD
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.