CMS on July 10 shared its proposed changes to the 2025 physician fee schedule, and it includes a proposed 2.8% conversion factor decrease from 2024.
Spine surgeons discuss the move and what steps should be taken in response.
Note: Responses were lightly edited for clarity.
Michael Gallizzi, MD. The Steadman Clinic (Vail, Colo.): It is evident that the leaders at CMS have failed to grasp the fundamental principles of Economics 101. Despite a projected shortage of between 37,800 and 124,000 physicians within the next 12 years, as outlined in "The Complexities of Physician Supply and Demand: Projections From 2019 to 2034," and a significant increase in demand for healthcare services from an aging population — with the number of Americans aged 65 and older expected to rise from 58 million in 2022 to 82 million by 2050, a staggering 47% increase — CMS is nonetheless considering implementing new rules for 2025 that include a 2.93% reduction in payment rates under the Physician Fee Schedule (PFS). This move is not only insulting but also neglects the fact that Medicare physician pay has already dropped by 22% between 2001 and 2021, adjusted for inflation. Instead of perpetuating this downward trend, CMS should be increasing reimbursement rates to compensate for the shortcomings of the past two decades. The continued lack of support from CMS for physicians caring for our aging population will inevitably lead to longer wait times, delayed access to care, and a major healthcare crisis for our nation's seniors.
Brian Gantwerker, MD. The Craniospinal Center of Los Angeles: As we have seen from the latest tomfoolery of United Healthcare overcharging the government to the tune of 8.7 billion dollars, the government is not interested or serious about saving money.
So a physician pay cut, amplified not only by inflation but also in the context of previous cuts is clearly designed to drive physicians out or into employment. By making fee for service untenable, they seek to implode the current system to use it as an excuse for single payer.
Most of the mandates and benchmarks since the inception of the ACA, completely unfounded, have never been shown to improve patient safety nor improve quality. Again, these were placed not to get patients better care, but to make things harder for mom and pop practices to exist.
The net effect will be that if you amortize out the cost of rent, employee salary, malpractice, insurance, and general office expenses, it will be a net negative to see Medicare patients. The idea here is to decrease access and demonized doctors for 'being greedy.' This carries the narrative that doctors drive to the cost of care which at this point is laughable since we are down about 20 to 30% from about 30 years ago. The only thing that's really gone is insurance premiums and the cost of medications. You don’t have to realize which way the wind is blowing.
A lot of misguided policy and frankly people who used to work in insurance companies that are now inside the government are driving profits to their old colleagues. They are neither serious nor honest about wanting to save money or provide better care.
Morgan Lorio, MD, of Advanced Orthopaedics and Pain Management (Orlando, Fla.) and ISASS president (2024-2025): The finalized CY 2020 conversion factor was $36.09, while the proposed CY 2025 conversion factor is $32.36, representing an approximate 10.33% decrease. This drop impacts relative value units (RVUs), translating to reduced reimbursement rates. Physician practices cannot sustain increasing costs as their payment rates continue to decrease.
A best action plan of advocacy and policy engagement will include the following:
1. Collaboration with the American Medical Association (AMA) — creating a united front — so as to engage with lawmakers to push for legislative adjustments to ensure fair compensation; and
2. Raising public awareness through social media platforms about the issue among stakeholders and the general public, highlighting the impending impact on patient care.
In summary, the PFS conversion factor has decreased by $3.73 from 2020 to the proposed 2025. This represents a percentage decrease of approximately 10.33%. This substantial decrease highlights the significant impact on physician payment rates over this period. Mitigating the impact of the reduced conversion factor on physician-surgeons should be a national health priority.
Lali Sekhon, MD, PhD. Reno (Nev.) Orthopedic Center: So CMS is planning on a reduction in 2.8% to the conversion factor for RVU payments to physicians for 2025. No surprise there.
Despite high inflation CMS seems to enjoy reducing physician incomes yearly, yet physician incomes account for just 15% of U.S. spending on healthcare.
We play this game every year. It's why our state is 48th out of 50 in terms of physicians/capita. It's why the APP numbers have exploded and no one can find a primary care physician. It's why physicians at their prime, over 50, are looking for existing strategies.
The big question is what is the end game. My suspicion is that CMS wants to drive physicians into hospital employment and out of private practice and with 70% of U.S. physicians currently employed, we are headed that way.
Our response will be to wait as we always do — use the weakest lobbyist group to talk to our congressmen/congresswoman and Washington although the real money with lobbyists lies with pharma, payers and hospitals. One of many solutions is we need to own every phase of care. Form groups. Own urgent cares, PT, imaging. Do the surgeries in our own ASCs. This is already happening. It doesn't solve the RVU erosion but offsets the income loss more creatively. As physicians we need to control every phase of care.
Vladimir Sinkov, MD. Sinkov Spine (Las Vegas): It does not make sense why performing the same work as a physician should be valued at a lower rate in 2025 than in 2024 while the cost of living and the cost of doing business continue to increase.
According to CMS, these recurrent annual payment reductions are dictated by law. Therefore, I do not understand why they call it "proposed" and what would be the value of opening it to public comments if they themselves admit they are bound by law and cannot change this in any way.
Since I have already opted out of Medicare, this change will not affect my practice. I am confident, however, that it will cause further problems with access to care for Medicare beneficiaries, as more physicians will either limit how many patients with Medicare they see or opt out altogether.
Vijay Yanamadala, MD. Hartford (Conn.) HealthCare: Historically, reducing compensation has led to an increase in procedures. In an era when more than 50 percent of spine surgeries may be unnecessary, we are likely to see a further increase in volume of surgeries due to these measures. We need to think creatively on how to truly reward high-value surgeries and reduce unnecessary procedures — reducing physician compensation has never been and is not now the right solution.
Sadly, Medicare's strategy to slash prices has not worked to curb unnecessary care for the last 20 years. We need a different, more systematic approach. And we need to interrogate every problem, like the current epidemic of unnecessary surgery in this country, as well as potential solutions, before we introduce or change healthcare policies. If we don't, we risk unintended consequences.
Physicians must now more than ever recognize the importance of collective bargaining. Without the power of coming to the table as a group, we don’t have a meaningful voice in this conversation. This is the only way forward.
Christian Zimmerman, MD. St. Alphonsus Medical Group and SAHS Neuroscience Institute (Boise, Idaho): Considering the current state of this nation's economy, debt burden and outlook, these reductions are neither surprising nor unexpected. Large hospital systems and their employed physicians have experienced reduced revenues, pay cuts and capital budget freezing since the pandemic crisis, resulting in stalled growth, and in some cases, elimination of service lines all together. Albeit small in scale to previous reductions for CMS patient services, these actions will continue to impact the neediest of patients and further divide healthcare delivery systems and those who render that care. Our community and many of its physicians already exclude certain insurance profiles, so these actions will only certainly be reinforcing this behavior further.