11/20/2024

2.83 Percent Medicare Physician Reimbursement Cut Finalized for 2025; Estimated 4 Percent Cut for Medical Oncology

On November 1, 2024, the Centers for Medicare & Medicaid Services (CMS) issued the 2025 Physician Fee Schedule (PFS) final rule adopting changes for Medicare payments under the PFS. CMS also released the 2025 Hospital Outpatient Prospective Payment System final rule which sets hospital outpatient reimbursement rates for the calendar year.

Physician Fee Schedule

Conversion Factor
The final Conversion Factor (CF) for physician services will be reduced by 2.83% in 2025. The change to the PFS conversion factor reflects the 0% overall update required by statute, the expiration of the temporary 2.93% increase in payment for 2024 required by statute, and an estimated 0.02% adjustment to account for changes in work relative value units (RVUs) for some services. This amounts to an estimated 2025 PFS conversion factor of $32.3465, a decrease of $0.94 (or 2.83%) from the 2024 conversion factor of $33.2874.

This reimbursement cut coincides with an ongoing increase in the cost of practicing medicine. CMS projects that the Medicare Economic Index (MEI) will increase 3.5% for 2025, which is why the Association for Clinical Oncology (ASCO) is asking Congress to pass the Medicare Patient Access and Practice Stabilization Act (H.R. 10073). The legislation would stop the 2.83% cut to physician reimbursement in the 2025 PFS and provide an inflationary update equal to 50% of the MEI. ASCO members are encouraged to contact their lawmakers and urge them to pass this legislation though the ASCO ACT Network.

Specialty Impact
ASCO estimates a 4% decrease for Medical Oncology in 2025. This includes the 2.8% decrease from the conversion factor, a 0.67% decrease in total RVUs, and a 0.59% decrease due to the expiration of the Physician Work Geographic Practice Cost Index (GPCI). ASCO also estimates a 3.25% decrease for Radiation Oncology and a 3.60% decrease for Gynecologic Oncology. The actual impact on individual clinicians will vary based on geographic location and the mix of billed Medicare services.

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