Lawmakers Introduce Bill Boosting Physician Pay from April through December 2025
Lawmakers Introduce Bill Boosting Physician Pay from April through December 2025
On Friday, January 31, 2025, a bipartisan coalition of lawmakers reintroduced a bill aimed at counteracting and surpassing a recent pay reduction for physicians that took effect at the beginning of the year. The Medicare Patient Access and Practice Stabilization Act of 2025, effective April 1, 2025, would continue the 2.83 percent Medicare pay reduction for services provided from January through March. However, starting April 1, 2025, through December 31, 2025, the legislation would implement a 6.62 percent increase, offsetting the previous payment cut and the impact of the first quarter’s reductions, while adjusting for inflation.
The lawmakers highlighted the broader consequences of Medicare payment cuts, warning of reduced access to care in rural and underserved areas, physician layoffs, office closures and increased burnout. Additionally, the Centers for Medicare & Medicaid Services (CMS) projects a 6.4 percent increase in practice costs, exacerbating the strain on medical providers.
This same measure was introduced in October 2024, but it failed to pass before Congress adjourned in January 2025. This legislation has gained support from over 150 provider organizations, trade groups and lobbying associations.
The Medicare Payment Advisory Commission (MedPAC), which advises Congress on Medicare policy, has also called for a revision to the current pay cuts. However, their recommendation would replace the existing system with a single update based on the Medicare Economic Index (MEI) or practice cost inflation minus one percentage point, alongside safety-net add-on payments that are not budget neutral.
The American Medical Association (AMA), a key advocate for Medicare payment reform, reported inflation-adjusted Medicare reimbursement for physician services has by 33 percent since 2001. Over the same period, payments have increased by just 7 percent, while medical practice costs have risen by 59 percent.
“This legislation would begin to reverse the cuts physician practices have endured over the last four years, all while dealing with high inflation,” said AMA President Bruce A. Scott, M.D. in a press release. “As this bipartisan bill demonstrates, lawmakers recognize that the current trend is unsustainable and, if unaddressed, will harm patients. Ensuring access to care and supporting practice sustainability is a national issue requiring urgent congressional action.”
The Medical Group Management Association (MGMA) has also called for swift passage of the bill. In a press statement, the organization emphasized the financial hardships resulting from Congress’s failure to reverse the 2025 Medicare fee schedule cuts: “These cuts have jeopardized the viability of Medicare-funded practices, commercial contracts linked to Medicare rates, and Medicaid reimbursements in states using Medicare as a benchmark.”
