MGMA urges immediate action on Medicare physician payment (January 8, 2025)

January 8, 2025 

Re: Immediate Action Needed to Support Medical Groups in 2025

Dear Speaker Johnson, Majority Leader Thune, Minority Leader Jeffries, and Minority Leader Schumer:

On behalf of our member medical group practices, the Medical Group Management Association (MGMA) thanks you for your leadership in supporting medical group practices’ ability to provide high-quality, cost-effective care. While we appreciate Congress acting near the end of last year to extend certain healthcare policies, such as the 1.0 work Geographic Practice Cost Index (GPCI) floor and telehealth flexibilities through March 31, 2025, many provisions that are important to medical groups were ultimately removed from the American Relief Act, 2025 (ARA) despite having received broad bipartisan support.

Of utmost urgency is the 2.83% cut to the Medicare physician fee schedule that went into effect on Jan. 1, 2025. It demands immediate attention. Medical groups have already begun to feel the adverse effects of this significant decrease in reimbursement, heading into the new year facing uncertainty and financial shortfalls from not only Medicare but commercial contracts tied to Medicare rates, as well as Medicaid reimbursement in states that use Medicare as a benchmark. Lawmakers are playing a dangerous game that will ultimately damage patients’ access to physicians who can no longer deal with the chaos caused by congressional inaction to fix a reimbursement formula that continues to destabilize the Medicare program. Congress cannot wait until the March 14 federal government funding deadline — swift action is required.

In addition to rectifying the cut to the Medicare conversion factor and providing an inflationary update for 2025, Congress needs to take swift action on other issues of vital importance to medical groups by: passing bipartisan-supported prior authorization reform, extending the Advanced Alternative Payment Model (APM) incentive payment for 2025, and further extending the 1.0 work GPCI floor and telehealth policies that now expire at the end of March.

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