Proposed Medicare Rule Will Impact Payment Amounts

On July 16, 2025, the Centers for Medicare and Medicaid (CMS) offered a proposed rule concerning the physician fee schedule and other Medicare payment policies. The rule, if adopted, will take effect January 1, 2026. What follows is a list of some of the more significant proposed changes.

Aspects deemed beneficial by the AMA:

• A one-year 2.5% increase for the conversion factors used for the physician fee schedule. There are also smaller conversion factor increases—these increases are larger for participants who are qualifying participants in advanced alternative payment models.
• Increases in anesthesia-conversion factors, for both qualifying and non-qualifying participants.
• Increase in work relative value units (RVUs) for clinical psychology, clinical social work, geriatric medicine and psychiatry because telehealth was exempted from efficiency-related adjustments that will reduce payment amounts.

Aspects deemed detrimental by the AMA:

• Imposition of a 2.5% decrease to the work RVUs based on a determination that practice efficiency has increased.
• Efficiency-related adjustments that will cut overall payment by 1% for radiology, pathology and most surgical specialties.
• Some changes based on CMS’ conclusion that physician time in the resource-based relative value scale is inflated.
• Lack of any upward budget-neutrality adjustment to the conversion factors.
• Adjustments to indirect cost calculations for facility-based versus non-facility-based services. These adjustments will result in a 7% decrease for facility-based payment versus a 4% increase for non-facility-based services.
• Current Procedural Terminology codes were not added to the telehealth list.

CMS will accept comments until September 12, 2025. The proposed rule and instructions on how to offer comments are available here.

Read the AMA summary of the proposed rule here.