Medicare doctor pay plan would hit specialists, curb AMA clout

Modern Healthcare – Tuesday, July 22, 2025
By Bridget Early

The Centers for Medicare and Medicaid Services has set in motion a quiet transformation in how Medicare pays doctors.

Tucked inside the Medicare Physician Fee Schedule proposed rule for 2026 that the agency issued last Monday is a plan to move away from calculating rates using survey data from the Relative Value Scale Update Committee.

The panel known as RUC, which the American Medical Association and other doctor groups created in 1991, wields considerable influence over Medicare payments and CMS accepts its guidance the vast majority of the time. There is no equivalent for hospitals and other providers.

Under the draft regulation, reimbursements for nearly 9,000 billing codes mostly associated with speciality care would decline 2.5%, according to CMS. The agency solicited comment on using different data to calculate the value of codes.

The change would affect rates for billing codes associated with services such as surgery, diagnostic imaging, outpatient care, pain management and orthopedics.

A CMS spokesperson characterized the policy as an effort to focus resources on primary care.

“CMS believes now is the right moment to act to better align payment with modern clinical practice and support broader goals of primary care investment and value-based care,” the spokesperson wrote in an email.

This shakeup of a longstanding method of setting fees threatens to intensify longstanding payment disputes between primary care doctors and medical specialists, who essentially compete for finite Medicare resources.

Family medicine practitioners and other doctors would see less of a difference because the proposal exempts billing codes they frequently use. But specialists such as radiologists, cardiologists and gastroenterologists may see lower payments for a substantial number of common codes.

The regulation would not apply to services that cannot be performed more speedily with practice, such as evaluation and management visits, behavioral health, certain maternity care, and telehealth, according to CMS.

AMA pushes back

The AMA and other organizations representing physicians and medical practices criticized the plan. Some speculated it would encourage doctors to increase volume to make up for the lost revenue, putting safety and quality at risk.

“Top of the line: Nobody wins,” said Darryl Drevna, senior director of regulatory affairs for the American Medical Group Association, which represents providers such as Rochester, Minnesota-based Mayo Clinic and Salt Lake City-based Intermountain Healthcare.

CMS is merely making an “efficiency adjustment” to fees associated with thousands of billing codes for services that have likely become more efficient over time and have not been updated, the spokesperson wrote. Codes go an average of 18 years between valuation reviews, according to the agency.

While CMS did not cite this concern, RUC and the AMA’s role in determining how much doctors are paid have attracted criticism over the years from those who cite conflict of interest and fault the methodology used to decide the relative value of a service.

“There is no substitute for relying on experienced practicing physicians when creating Medicare payment policy,” AMA President Dr. Bobby Mukkamala said in a statement. “No one knows more about what is involved in providing services to Medicare patients than the physicians who care for them.”

Because of laws governing the federal budget, CMS may not increase or decrease net Medicare spending through reimbursement regulations. This “budget neutrality” standard means that money saved from reducing payments for some services must be redistributed to payments for other kinds of care.

“When you’re constrained by the budget neutrality requirements of the fee schedule as it’s currently constructed, you get these policies and proposals that are shifting payments from one side of the ledger to the other,” Drevna said.

Despite resistance from the AMA and others, some medical societies endorsed the agency’s aims.

Medicare should place greater value on primary care than it has in the past, said David Pugach, vice president of governmental affairs and public policy for the American College of Physicians.

“There are some long-standing issues here that it’s certainly positive that CMS is trying to address,” Pugach said. Still, doctors and CMS need to take care to avoid “unintended consequences” for access to care, he said.

Laying the groundwork

CMS has eyed ways to use the physician fee schedule to promote primary care for several years, laying the groundwork for the new proposal.

In 2020, the agency issued a final rule to boost primary care reimbursements and cut back on specialty pay, but Congress undid the policy. Two years ago, CMS sought input on evaluation and management coding improvements and last year, it published a regulation summarizing critiques of the survey data RUC utilizes for its recommendations.

The agency has historically relied on RUC surveys to estimate physician time and intensity, which is factored into payments, but the surveys are limited by the small number of physicians who respond to them.

The Medicare Payment Advisory Commission and the Government Accountability Office, two independent legislative branch entities, are among those that have raised concern about the accuracy of the valuations RUC determines.

Safety and quality

CMS’s push for “efficiency” could prove hazardous, said American College of Gastroenterology President Dr. Amy Oxentenko, who practices and teaches at the Mayo Clinic.

The agency may assume that some services have become more efficient to perform over the years, but that’s not necessarily so, Oxentenko said.

For example, gastroenterologists are trained to spend at least six minutes on colonoscopies to ensure they don’t miss polyps, Oxentenko said. Reduced payments could change those practices, leading to lower quality care, she said.

“It doesn’t feel very satisfying or safe, to be honest, to think that we’re perhaps looking at speed as a surrogate and a metric rather than quality,” Oxentenko said. “It goes against all of the value-based care that focuses on quality as a metric rather than just numbers.”

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