Medicare Physician Payment Reform: What Physicians Need to Know and How to Take Action

By Jennifer Hanscom

Members of Congress are back in their districts meeting with constituents, and your voice matters. This is an important opportunity to advocate for meaningful changes to the Medicare program. All 10 members of Washington’s congressional delegation are up for reelection this fall. While you may not have time to meet with your representatives personally, taking a few minutes to send an email can make a difference.

Despite rising practice costs, Medicare physician payments have fallen by approximately 33% since 2001, when adjusted for inflation. Unlike payments for other Medicare providers, including hospitals, long-term care facilities, and hospice providers, Medicare physician payments lack an adequate annual payment update that reflects the rising cost of providing care.

The WSMA, in coordination with the American Medical Association, is working to advance Medicare payment reform in two key areas. We are also pushing back on a concerning Medicare payment proposal from the Centers for Medicare & Medicaid Services.

Ask your member of Congress to cosponsor the Patients First Act, H.R. 9693

The Patients First Act (H.R. 9693) would reform the Medicare physician payment system by providing greater stability, expanding opportunities for participation in payment models, and better aligning payment updates with the actual costs of care and inflation.

Led by Reps. Greg Murphy, MD (R-NC), John Joyce, MD (R-PA), and Washingtons’ own Kim Schrier, MD (D-WA), this bipartisan bill would help create a more stable and predictable Medicare payment system so physicians can continue caring for patients in their communities.

H.R. 9693 would:

• Provide a permanent annual payment update tied to the Medicare Economic Index to better reflect increases in practice costs.
• Modernize budget neutrality policies, including provisions from H.R. 8163, discussed below.
• Create a physician-led process for developing simplified, clinically relevant quality measures.
• Expand opportunities for physicians to participate in alternative payment models.

Take action: Contact your member of Congress today and urge them to co-sponsor the Patients First Act, H.R. 9693. Click here to send your message.

Ask for support for the Provider Reimbursement Stability Act, H.R. 8163 and S. 5180

The Provider Reimbursement Stability Act, introduced in both the House and Senate, would modernize key Medicare physician payment rules and improve fairness and predictability for medical practices while promoting stability for physicians and patients.

H.R. 8163 and S. 5180 would:

• Update the Medicare budget neutrality threshold.
• Require CMS to evaluate the actual costs of running a medical practice at least every five years.
• Revise how CMS addresses incorrect billing codes.

Currently, budget neutrality requires increases in spending in one area to be offset by reductions elsewhere when the spending increase exceeds $20 million. That $20 million threshold has remained unchanged since the early 1990s and has never been adjusted for inflation.

H.R. 8163 and S. 5180 would modernize this outdated provision by increasing the threshold to $57.64 million and indexing it every five years based on the cumulative percentage increase in the Medicare Economic Index.

The legislation would also require CMS to regularly evaluate the costs of operating a medical practice, including clinical wages, equipment, and medical supplies, to help prevent large swings in payment rates. It would also allow for prospective rate adjustments, helping prevent deep and unnecessary payment cuts resulting from inaccurate utilization projections under current budget neutrality rules.

Take action: Urge your member of Congress, as well as Sens. Patty Murray and Maria Cantwell to support H.R. 8163 and S. 5180, the Provider Reimbursement Stability Act. Click here to send your message.

Ask CMS to withdraw the proposed 50% reduction for modifier -25 services

But there’s more. While WSMA is supporting legislation before Congress, we are opposing a Medicare proposal currently before CMS, and we need members of our congressional delegation to intervene.

CMS has proposed reducing payment by 50% when a separately identifiable office/outpatient evaluation and management service reported with modifier -25 is furnished on the same day as a procedure with a 0-, 10-, or 90-day global period. Under the proposal, the highest-valued service would be paid at 100%, while other procedures or E/M services furnished on the same day would be paid at 50%.

The WSMA is urging CMS not to adopt this policy and is asking members of Congress to urge CMS to withdraw the proposal.

What your members of Congress need to know: CMS is advancing this policy based on an unsubstantiated assumption of “likely” duplication, without the evidence that a change of this magnitude requires, and without addressing the concerns that led the agency to decline a substantially similar proposal in 2019.

This is not a new proposal. CMS proposed a substantially similar, but narrower, policy in its CY 2019 rulemaking and, after considering public comments, declined to finalize it. The current proposal is broader. It would extend the policy to 10- and 90-day global procedures and reduce payment for all same-day services other than the highest-valued one. Yet, in the intervening years, CMS has not developed the evidentiary basis or concrete implementation approach that its earlier decision would call for. The proposed rule also does not explain what has changed to warrant revisiting the policy.

The WSMA, along with other medical associations and the AMA, is asking CMS to:

• Not finalize the proposed 50% payment reduction for services furnished on the same date as a separately identifiable O/O E/M visit reported with modifier -25.
• Not extend the policy to procedures furnished on the same date as inpatient or other E/M services.
• Address any genuine overlap through established misvalued-code and AMA/Specialty Society RVS Update Committee valuation processes on a code-specific basis, rather than through a uniform payment reduction. Where CMS believes specific codes do not fully account for overlap, the agency should work with stakeholders to address those concerns.

What you can do: Ask your members of Congress to urge CMS to withdraw the proposed 50% payment reduction and reconsider the policy in light of the concerns raised by physicians and medical organizations. Click here to send your message.

You should also submit a comment directly to CMS opposing the proposal. CMS is accepting public comments on the CY 2027 Medicare Physician Fee Schedule through Sept. 14, 2026.

We encourage you to do both: Contact your members of Congress and submit a comment directly to CMS.

Your voice matters

Your voice and your support of the WSMA matter. Case in point: With regard to modifier -25, the WSMA has been engaged on this at the state level. Regence recently announced they would be discontinuing coverage/payment for modifier -25 under certain circumstances effective Sept. 1. Working with leaders from the dermatology community, the WSMA immediately reached out to Regence to share concerns and this week they reached out to share they are pausing the policy change and will not be moving forward with it at this time.

Medicare payment reform will not happen without sustained advocacy. Please take a few minutes to contact your members of Congress and senators, whether that’s by attending a local town hall meeting, participating in a fundraiser, or sending them an email. We need their engagement and support on these important reforms.

The stakes are high, not only for physicians and medical practices, but for the Medicare patients who depend on continued access to care in their communities.

Jennifer Hanscom is WSMA’s CEO.