AAFP Urges Swift Legislative Fix for Conversion Factor Cut in 2025 MPFS

The AAFP warned that a physician payment cut in the 2025 Medicare physician fee schedule final rule, released Nov. 1, “negates the impact” of investments to primary care made elsewhere in the rule.

“The consequence of this year’s 2.8% reduction is dire, putting practices at risk, exacerbating physician workforce shortages and preventing patients from accessing primary care,” Academy President Jen Brull, M.D., FAAFP, said in a statement the same day, which urged Congress to address the pay cut.

Only Congress can offset the Medicare physician payment reduction, which is caused by statutorily required budget neutrality (the stipulation that CMS can’t raise payment in any area of the fee schedule without lowering it somewhere else) and the expiration of limited conversion factor relief that lawmakers enacted last year. At least two bills are in motion that are meant to alleviate the 2025 conversion factor’s effects.

The Medicare Patient Access and Practice Stabilization Act of 2024 (H.R.10073) — which a bipartisan group of House members introduced Oct. 29 — would, as similar legislation has done the past few years, offset the conversion factor cut. This time that correction would be a 4.73% physician payment increase (reversing the fee schedule’s 2.8% cut while adding a payment update equal to half of the Medicare Economic Index, for a net conversion-factor increase of about 1.9%). As in previous congressional fixes this decade, that bill’s adjustments would be limited to one year.  

The AAFP has long called on lawmakers to permanently address inadequate Medicare physician payment by eliminating budget neutrality and setting annual inflation-based payment updates corresponding to the MEI, which tracks inflation based on practice costs and wages. CMS expects the MEI to go up about 3.6% this year. The Academy has urged passage this year of the Strengthening Medicare for Patients and Providers Act, which would ensure such payment updates. More than 230 House lawmakers wrote to congressional leadership in October to voice support for that bill.

The Academy, with its partners in the Group of Six coalition of frontline physicians, applauded that letter during in-person advocacy conducted at the end of October. Leaders from the AAFP and the other Group of Six organizations reminded members of Congress that 2025 marks a fifth consecutive cut to physician payment in the MPFS and called for swift stabilization of Medicare payment before the new year.

Primary Care in the Final Rule

The 2025 MPFS finalizes several policies for which the AAFP advocated. Top among these are

• allowing payment for the G2211 add-on code alongside modifier 25 in some instances, including the Medicare annual wellness visit, vaccine administration or Medicare Part B preventive service at the same encounter as an office/outpatient evaluation and management service; and

• three new codes for advanced primary care management services that bundle elements of several existing care management and communication technology–based services, a step toward achieving hybrid primary care payment within the framework of traditional Medicare.

The final rule also will allow two-way, real-time audio-only telehealth for beneficiaries, as the AAFP supported, and includes minimal changes to the Quality Payment Program. As the AAFP called for, the QPP’s Merit-based Incentive Payment System performance threshold will remain 75 points for the 2025 performance year.

In another acknowledgement of the Academy’s advocacy, CMS notes in the final rule that its future rulemaking on the primary care exception will consider guidance the AAFP supplied as part of its response to the MPFS proposed rule (in which the agency asked stakeholders about expanding the exception). A flexibility expanded during the COVID-19 public health emergency, the primary care exception allows teaching physicians to directly supervise residents via real-time, interactive audio/visual technology and bill for certain services furnished by residents. The Academy has sought the permanent adoption of the exception’s expanded list of services, noting that such a move would support the primary care workforce, improve patient continuity of care without compromising patient safety and increase the utilization of high-value services.