Medicare Reimbursement

Our Position

To ensure continued access to vital physician and surgical services for Medicare patients, Congress must create a fair, long-term, and sustainable solution for Medicare physician payment rates. Lawmakers must take action to improve the physician payment system by providing an inflationary payment update, revisiting budget-neutrality requirements, and maintaining the 10- and 90-day global surgery payment package.

This is why AAO-HNS urges congress to pass the Medicare Patient Access and Practice Stabilization Act of 2025 (H.R. 879), which would amend Title XVIII of the Social Security Act to increase support for physicians and other practitioners in adjusting to Medicare payment changes.

Additionally, the AAO-HNS supports reintroduction and passage of the Provider Reimbursement Stability Act, which would seek to address long-standing concerns over the unpredictable and financially unsustainable Medicare Physician Fee Schedule.

Background

For more than 20 years, Medicare payment for physician services has been perennially cut due to strict budget neutrality requirements and fails to keep up with inflation. In fact, from 2001 to 2025, Medicare payment for physician services have been effectively cut by 33% when adjusted for inflation. In 2025, physician services were subject to another 2.83% cut due to a rule previously finalized by the Centers for Medicare & Medicaid Services (CMS) and congressional inaction to avert the cut. This continued targeting of payment for physician services creates financial instability for independent practices and consequently, endangers access to care for Medicare beneficiaries.

Medicare_Gap_Chart_2025

Congress Must Ensure Fair Medicare Reimbursement for Physicians.

Recognizing the need to act, U.S. Representatives in the 119th congress introduced the Medicare Patient Access and Practice Stabilization Act of 2025 (H.R. 879), a bill that would prospectively cancel the 2.83% payment cut and replace it with a 2% payment update. The AAO-HNS and more than 100 national and state medical societies and healthcare organizations signed a letter to House and Senate leadership in February urging passage of H.R. 879.

The Academy also strongly urges lawmakers to pursue long-term Medicare physician payment reforms by reintroducing the Provider Reimbursement Stability Act. If reintroduced, the Act would raise the outdated budget neutrality threshold from $20 million to $53 million, with future increases to reflect real-world cost growth since its original implementation in 1992. Additionally, the Act would improve payment predictability for providers by establishing clear limits on year-to-year changes and requiring more accurate, equitable adjustments based on actual service utilization and real-world cost.

Resources

119th Congress

118th Congress

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