Physicians Set for a Modest Pay Increase
Doctors participating in Medicare may receive a payment increase of up to 3.8% next year under a new proposal from the Trump administration. The Centers for Medicare and Medicaid Services (CMS) released the proposed rule on Monday, aiming to stabilize physician payments after years of declines.
Under the plan, physicians in qualifying alternative payment models — those that tie pay to patient outcomes — will be eligible for the full 3.8% bump. Others will still see a 3.3% increase. These figures include a temporary 2.5% boost passed by Congress this month as part of a broader tax and spending package.
Shifting Away from AMA’s Billing Influence
In a significant move, CMS also proposes a new approach to calculating payment rates for medical billing codes. Rather than relying on survey data from the American Medical Association’s Relative Value Scale Update Committee, CMS wants to use a figure based on five years of medical practice cost inflation.
The change would reduce payments for codes not based on physician time by 2.5% in 2026. CMS argues that this shift would lead to more accurate valuations and reduce distortions that have long affected the Medicare payment system. Experts and policymakers have increasingly called for reducing AMA’s influence in rate setting.
Winners and Losers by Specialty
The proposal is expected to benefit primary care physicians, including those in family medicine, geriatrics, and psychiatry. These specialties frequently use time-based billing codes and stand to gain under the new system.
In contrast, procedure-heavy fields such as radiology and radiation oncology may face cuts. Their reliance on non-time-based codes would make them more vulnerable to the proposed 2.5% decrease in payment for those services.
Some medical groups are cautiously optimistic. The Primary Care Collaborative applauded CMS for tackling Medicare’s underinvestment in preventive care. However, many physicians still argue for broader reforms, saying the current fee-for-service model remains misaligned with modern care goals.
Additional Policy Shifts and Pilot Programs
The 1,803-page proposal includes other notable changes, such as revising payment rules for skin substitutes, a category recently scrutinized for fraud. CMS also unveiled plans for a new mandatory payment experiment targeting specialties that frequently manage conditions like heart failure and chronic back pain in outpatient settings.
The initiative would tie payments to improvements in long-term disease management, with financial incentives for better outcomes. CMS believes these experiments could enhance care quality while controlling costs.
Stakeholders have until September 12 to submit comments on the proposed rule.
