Overview of Physician Concerns
Physicians nationwide are demanding greater certainty around Medicare reimbursement policies, arguing that compounding payment decreases over time have drastically increased financial pressure on medical practices. Industry organizations, individual physicians, and healthcare stakeholders recently submitted comprehensive comments on the proposed Physician Fee Schedule, with Friday marking the deadline for public input.
The proposed legislation would increase payments by 3.62% next year, accounting for a 2.5% payment adjustment under the One Big Beautiful Bill Act. However, physician organizations argue this modest increase fails to address years of inadequate reimbursement that has left many practices struggling to maintain financial viability.
Current Financial Challenges
The healthcare industry has experienced significant financial strain throughout 2025, with a 2.83% Medicare payment cut proving particularly challenging for medical groups nationwide. This reduction has compounded existing administrative and financial pressures that have been building for years, creating an unsustainable environment for many physician practices.
MGMA’s Key Demands
The Medical Group Management Association (MGMA) acknowledged the proposed pay increase while expressing serious concerns about long-term payment trends. In their detailed comment letter, the organization outlined several critical issues requiring immediate attention.
Budget Neutrality Policy Reform
“Outdated budget neutrality policies, coupled with a lack of an inflationary update, undermine the ability of physician practices to remain financially viable,” the MGMA stated in their official response. The organization emphasized that current policies fail to account for rising operational costs that medical practices face annually.
Administrative Burden Reduction
The MGMA highlighted the significant administrative burden that physicians face under current Medicare policies. These bureaucratic requirements not only increase operational costs but also divert valuable time and resources away from patient care, ultimately affecting the quality of healthcare delivery.
American Medical Association Position
The American Medical Association (AMA) echoed many of MGMA’s concerns in their comprehensive comment letter, advocating for more permanent solutions to support physician practices across the nation.
Stagnant Payment vs. Rising Costs
The AMA emphasized that Medicare payments to physicians have stagnated while practice operational costs continue climbing steadily. This widening gap creates an unsustainable financial environment for healthcare providers, particularly smaller independent practices.
“Inadequate physician payment has real-world consequences, accelerating the trend in consolidation and worsening seniors’ access to care,” the AMA stated. The organization urged the Trump Administration to support congressional action implementing inflation-based updates for physician payments.
Legislative Advocacy
A provision tying payment updates to the Medicare Economic Index was included in the House’s version of the reconciliation package but unfortunately did not make it into the final legislation. The AMA continues advocating for such measures to ensure physician payment sustainability.
Telehealth Policy Extensions
The MGMA specifically requested that the Centers for Medicare & Medicaid Services (CMS) extend telehealth flexibilities currently set to expire at the end of September. These policies have proven crucial for maintaining healthcare access, particularly in rural and underserved areas.
Practice Location Billing
The organization asked CMS to make permanent the current Medicare policy allowing physicians to list their practice location when billing for telehealth services conducted from home. Reversing this policy could “lead to security concerns” and significantly increase documentation burden for healthcare providers.
Digital Healthcare Innovation
Telehealth policies have revolutionized healthcare delivery, enabling providers to reach patients who might otherwise lack access to specialized care. Maintaining these flexibilities ensures continued innovation in digital healthcare delivery while preserving patient safety and care quality.
MIPS Program Overhaul Requests
Both MGMA and AMA called for significant reforms to the Merit-based Incentive Payment System (MIPS), citing excessive administrative burden and outdated performance metrics.
Performance Threshold Maintenance
The organizations specifically requested that CMS maintain the MIPS performance threshold at 75. “CMS should ensure its methodology avoids unsustainable increases to an already high threshold,” the MGMA emphasized in their comments.
Data Access Improvements
The AMA expressed disappointment that the proposed fee schedule doesn’t address critical data access issues in the MIPS program. Physicians typically receive annual MIPS reports containing feedback from months after patient visits, making real-time practice improvements virtually impossible.
Quality Measure Calculations
The AMA urged CMS to modify how it calculates claims-based quality measures, arguing that current methodologies don’t accurately reflect care quality or practice performance.
Medicare Shared Savings Program Changes
The National Association of ACOs (NAACOS) and Premier healthcare organization recommended continued refinements to the Medicare Shared Savings Program (MSSP) to ensure sustainable financial benchmarking.
Financial Sustainability Measures
NAACOS suggested addressing the ACO benchmark ratchet and removing the Accountable Care Prospective Trend to create more sustainable financial benchmarking within the program.
Innovation Integration
The organization recommended incorporating all waivers from CMS’s Innovation Center into the MSSP and making it easier for ACOs to test additional waivers across different models.
“Accountable care empowers patients and providers with tools to focus on prevention, manage chronic conditions, expand access to services not traditionally covered by Medicare, and reduce overall costs,” NAACOS stated.
Rural Provider Considerations
Premier recommended that CMS consider creating a specific MSSP track for rural providers and establishing higher-risk track options within the program to address unique challenges faced by rural healthcare facilities.
Long-term Impact on Healthcare Access
The cumulative effect of inadequate physician payment updates extends far beyond individual practice finances, potentially threatening healthcare access for millions of Medicare beneficiaries nationwide.
Practice Consolidation Trends
Inadequate reimbursement rates are accelerating consolidation trends in healthcare, with smaller independent practices increasingly forced to merge with larger health systems or close entirely. This consolidation often reduces patient choice and can lead to higher healthcare costs.
Senior Healthcare Access
The AMA specifically warned that current payment policies are “worsening seniors’ access to care.” As practices struggle financially, many are reducing Medicare patient acceptance or limiting services, directly impacting healthcare access for the nation’s most vulnerable populations.
Future Medicare Viability
“To protect Medicare for the next generation,” healthcare organizations are urging comprehensive payment reform that addresses both immediate financial pressures and long-term sustainability challenges facing the Medicare system.
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