Policies enacted by the Centers for Medicare & Medicaid Services can be a powerful force in shaping the future of the health care ecosystem. The American Academy of Family Physicians recently responded to the 2025 Medicare Physician Fee Schedule proposed rules with recommendations to achieve CMS' stated goal to strengthen primary care.¹ Private payers, a key stakeholder group the AAFP engages with Beyond the Beltway, are not directly impacted by the MPFS, but the decisions made by CMS in its final rule have significant influence on the decisions of private payers. Medicare-covered services and their corresponding payment rates act as benchmarks, influencing private payers' pricing and coverage strategies. Additionally, CMS is crucial in influencing the shift to value-based care through its Innovation Center models that seek to expand their impact by aligning with private payers and state Medicaid programs.

A BROKEN SYSTEM

CMS has stated its commitment to an “administration-wide strategy to create a more equitable health care system that results in better accessibility, quality, affordability, empowerment and innovation for all Medicare beneficiaries.” The Center for Medicare and Medicaid Innovation emphasizes the importance of primary care in achieving these goals, stating that “advanced primary care and accountable care models are central to driving growth in the number of beneficiaries in accountable care relationships.” Family physicians account for nearly 40% of the total primary care physician workforce,² with more than 90% of non-pediatric primary care physicians caring for Medicare patients.³ As such, AAFP members are the cornerstone of primary care delivery for our health system and central to achieving CMS/CMMI strategic goals.

The AAFP shares CMS' commitment to these goals. However, as we have repeatedly expressed to both CMS^4,5 and Congress,^6,7 there are fundamental flaws within the MPFS that, absent broader legislative reform, limit CMS' ability to have meaningful impacts on physicians and their patients.

Most importantly, the MPFS is underfunded and physicians are underpaid, with family physicians continuing to be among the lowest-paid specialists in the United States.⁸

The number of factors and resulting impact on physician payment grows every year, starkly contrasting with other Medicare spending areas, which continue to increase at substantially higher rates. The imbalance has and will continue to destabilize physician practices, accelerate consolidation,⁹ worsen access to care for beneficiaries and contribute to increased health care spending.^10,11 While this imbalance is experienced across all medical specialties, the impact on primary care is striking and at odds with stated goals by CMS/CMMI. The number of primary care physicians declined from 68.4 to 67.2 per 100,000 people between 2012 and 2021,¹² and family physicians are reporting a 25% reduction in patient panel size during the 10-year period from 2013 to 2022.¹³ The Health of US Primary Care: 2024 Scorecard Report, No One Can See You Now, cites chronic underinvestment in primary care as one of the driving forces behind the decline in patient panel size.¹⁴ Some root causes include attracting fewer medical students and residents, causing physicians to limit their clinical practice hours or stop seeing patients altogether by choosing an administrative or other role over clinical practice or leaving the profession entirely.

The AAFP questions how long the MPFS can meet the needs of people with Medicare if physicians cannot afford to stay in business with continuing payment reductions that do not keep pace with inflation or the growing demands placed on physicians, especially primary care physicians. We recognize CMS' limitations under the Social Security Act, and we urge the agency to publicly identify the statutory shortcomings that hinder its ability to implement policies that will lead to meaningfully systemic improvements in access, quality, affordability and equity.

REFORMING A BROKEN SYSTEM

The stated mission of CMS is that it “serves the public as a trusted partner and steward, dedicated to advancing health equity, expanding coverage and improving health outcomes.”¹⁵ Taking their mission at its word, we believe the agency has a responsibility and is best positioned to provide the public with information on the current state of its programs and threats to their sustainability. The AAFP strongly proposes the following four reforms to ensure the viability of both CMS programs and primary care for Medicare patients:

1. Update the threshold for budget neutrality. The current $20 million threshold for budget neutrality imposed on the MPFS has not been updated since it was implemented in 1992.⁶ The trajectory of Medicare spending over time is misaligned with their stated goals of supporting equitable access to accountable care relationships, which predominantly rely on primary care physicians. Physician payment has increased just 11%, while hospital and skilled nursing facility payment has increased roughly 60% over the two decades between 2001 and 2021.¹⁶ Given this stark imbalance, it is not surprising that physicians are disillusioned and increasingly employed by hospitals, health insurers, private equity or other corporate entitites¹⁷ who benefit from increased payment. Meanwhile, access to high-quality primary care, including a focus on prevention, suffers as investments and innovations in rescue care seemingly thrive. These trends can only be countered by increasing investment in primary care and preventive services and removing or limiting mechanisms like budget neutrality, which undermine any attempt by CMS to improve payment or care delivery under the fee schedule.

2. Limit beneficiary cost sharing. AAFP members are unified in their view that a major barrier to physicians' ability to bill for the kind of comprehensive primary care they want to deliver — and that CMS has expressed its support for — is the requirement that patients must share in the cost of most services they receive. For example, billing for chronic care management services continues at less-than-ideal rates. However, the degree to which this service is billed should not be interpreted solely as a sign that those services are not being delivered in many primary care practices. Rather, it is often the case that the threshold for billing this service is being met, but practices cannot bill consistently for these services because beneficiaries are unwilling to consent to it based on the additional cost sharing they experience under the current rules. This challenge is especially germane given the discussion above on payment challenges and barriers in the current MPFS, as any increase in physician payment will also increase beneficiaries' financial obligations, thus requiring both to be addressed together.

3. Inadequate data and information exchange continue to hamper family physicians' ability to deliver high-quality, comprehensive and coordinated care to patients. The ongoing lack of interoperability and information exchange, including with payers who hold vast amounts of information, is the underlying theme of these challenges and is highlighted throughout our comments. The AAFP's Information Sharing in Value-based Payment Models for Primary Care (Position Paper) outlines several key calls to action to improve the electronic exchange of information. The AAFP appreciates the visions outlined in the 2023 HHS Data Strategy and CMMI Data Sharing Strategy Initiative. We believe stronger efforts should be made to improve data sharing for all physicians serving Medicare beneficiaries, not just those participating in CMMI models.

4. Administrative burden associated with quality measurement is increasingly intertwined. The ever-increasing number of measures that payment is tied to under different models is exacerbated by the inefficient payer-specific approaches to measurement. This takes the focus away from real innovation and places it on performance tracking and measurement. Historically undervalued fee-for-service reimbursement means that many primary care practices have been unable to invest in updating infrastructure or expanding capabilities. As a result, they are struggling to meet quality reporting requirements to maintain current payment levels under Medicare's Quality Payment Program rules. Those participating in alternative payment models are challenged by inadequate or non-existent upfront investment coupled with weak performance incentives. Payments tied to quality must be accompanied by commensurate funding in infrastructure that ensures practices can invest sufficiently to improve their performance.

The AAFP recognizes CMS is limited in its current statutory authority to address many of these concerns, and we have urged the agency to take a more holistic, creative and bold approach to addressing systemic issues under the MPFS, while also managing its obligation to implement annual updates. Unfortunately, unless the fundamental flaws we've presented in this article are addressed, these issues will continue to undermine CMS' well-intentioned attempts to improve physician payment that secures a primary care physician workforce for the future and improves the overall health care system.

While the challenges are formidable, the AAFP will continue to advocate for your needs and work with CMS and Congress to address these issues. On the same day we submitted our extensive comments to CMS in response to the 2025 MPFS proposed rule, we sent a letter to congressional leadership detailing our end-of-year priorities that must be accomplished before the end of the 118th Congress. Included among these priorities is providing an inflationary update to offset the proposed cuts for 2025, reforming prior authorization and providing a multi-year reauthorization of and increased funding for the Teaching Health Centers Graduate Medical Education Program. We believe Congress can and will solve many of these issues in the future, with the AAFP continuing to strongly advocate for meaningful solutions for family physicians and their patients.