March 21, 2025 | Sacramento, CA — MedLegalNews.com — Last week, Congress passed a Continuing Resolution to fund the government through the fiscal year. However, the bill, led by Republican leaders, did not prevent the 2.8% Medicare physician payment cut.
Deepening Crisis for Physician Practices
When adjusted for inflation, this payment cut results in a 6.3% effective reduction for physicians. This marks the fifth consecutive year of Medicare cuts, adding financial strain on practices and threatening care for 66 million Medicare patients.
CMA Condemns Congressional Inaction
“The California Medical Association (CMA) is outraged by Congress’ failure to prevent yet another catastrophic cut to Medicare payments,” said CMA President Shannon Udovic-Constant, M.D. She emphasized that bipartisan support exists for fixing the flawed Medicare program and improving patient access.
Alarming Impact on Physician Practices
Medicare physician payment cut: Since 2001, Medicare physician fees have dropped by 33% when adjusted for inflation. Other Medicare providers, however, received regular updates. This trend is pushing small and rural practices toward financial collapse. In California, these effects are evident as physicians:
- Face early retirement
- Limit the number of Medicare patients they accept
- Close their doors to new Medicare patients
Future Prospects for Reversing the Cut
U.S. Representative Greg Murphy, M.D. (R-NC), chair of the GOP Doctor’s Caucus, stated that Republican leaders assured him they would consider reversing the cut in a budget reconciliation bill expected for a vote in May.
Read CMA’s full statement on the Medicare physician payment cut.
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FAQS: Medicare Physician Payment Cut
How does the Medicare physician payment cut affect California doctors?
The Medicare physician payment cut reduces reimbursement rates by 2.8%, further straining California practices already facing inflation and staffing challenges.
Why did Congress fail to stop the Medicare physician payment cut?
Despite bipartisan support for reform, Congress’ recent funding bill did not include provisions to block the 2025 Medicare physician payment cut, leaving doctors without relief.
What steps can physicians take to address the Medicare payment cut?
Physicians can contact their representatives, join advocacy efforts led by the California Medical Association (CMA), and explore alternative payment models to sustain operations.
Are future reversals of the Medicare physician payment cut possible?
Yes. Congressional leaders have suggested that a budget reconciliation bill expected in May could include provisions to reverse or offset the current Medicare payment cut.