A bipartisan group of House representatives introduced a bill on Friday aimed at addressing and exceeding a pay cut for doctors that took effect at the beginning of this year. The legislation, known as the Medicare Patient Access and Practice Stabilization Act of 2025, seeks to mitigate the financial strain on physicians caused by the recent reduction in Medicare reimbursement rates. Murphy Introduces Bipartisan Legislation to Preserve Medicare for Patients and Physicians | Congressman Greg Murphy
Details of the Proposed Adjustment
The proposed adjustment would take effect on April 1 and continue through the rest of 2025. This legislative measure would maintain the 2.83% Medicare pay cut for services provided from January to March. However, services furnished after the cutoff date would see a notable 6.62% increase. This increase is intended to offset the initial pay cut, adjust for inflation, and prorate the first three months of reduced pay.
Impact on Physicians
Representative Greg Murphy, M.D., R-North Carolina, who introduced the bill, emphasized the dire financial challenges faced by physicians due to January’s pay cut, Medicare’s below-cost reimbursement rates, and medical inflation. These factors have put unprecedented pressure on the financial viability of medical practices, necessitating a legislative fix.
Rationale for the Bill
The bill aims to provide financial stability to medical practices by addressing the cumulative impact of declining reimbursement rates and increasing operational costs. By prorating the first quarter pay cuts and implementing a significant pay increase for the remainder of the year, the legislation seeks to ensure that physicians can continue to provide high-quality care without the burden of financial instability.
Next Steps
As the bill moves through the legislative process, it will be closely watched by medical professionals and industry stakeholders. The proposed adjustment represents a critical step towards ensuring that physicians are adequately compensated for their services, thereby supporting the sustainability of medical practices and the accessibility of patient care.
In conclusion, the Medicare Patient Access and Practice Stabilization Act of 2025 is a crucial measure aimed at addressing the financial challenges faced by doctors due to recent pay cuts. By implementing a targeted pay increase and adjusting for inflation, the bill seeks to provide the necessary financial relief to maintain the viability of medical practices across the country.
The irony here of course, is that this issue is not new. I wrote about the Medicare Physician Fee Schedule/Payment issues in September of 2024 (even the titles are similar). https://rhislop3.com/doc-payment-fix-in-the-works/
The graph below is where the issue started via current law. Note, nothing in the Murphy bill changes current law implementing a permanent fix.
The bill’s genesis began in 2024 but never came to the floor as concurrent with the election cycle and the closing of the 118th Congress, it effectively died. It was reintroduced with an updated name reflecting the year 2025. Because of this timing change, the bill would change provider payments on April 1 with all payments prior subject to cuts or current law.
With respect to outpatient therapy providers, the bill would increase the fee schedule’s conversion factor by 4.73%, essentially wiping out the 2.8% cut to the conversion factor and providing a 1.9% inflationary payment increase for 2025 (approximately 50% of the 2025 Medicare Economic Index, which is a measure of practice cost inflation).
Without congressional action, the 2.8% conversion factor cut in-effect this year from the Centers for Medicare & Medicaid Services (CMS) will remain per the final rule, impacting dozens of providers paid under the Medicare fee schedule, including physical, occupational and speech therapists. The conversion factor is a scaling factor that converts the relative value units for each service into a dollar payment amount for the various CPT codes paid under the fee schedule. It applies to all Medicare Part B providers.