Providers urge Congress: Fix Medicare payment model bonuses

Modern Healthcare – Thursday, May 29, 2025
By Bridget Early 

A coalition of healthcare trade associations and companies representing 550 providers and accountable care organizations is pleading with Congress to restore incentive bonuses for Medicare alternative payment models.

The American Medical Association, Boston-based Mass General Brigham and others wrote congressional leaders Thursday expressing concern that failure to renew bonus payments will worsen providers’ financial instability, particularly in underserved regions.

“While we have seen steady growth for advanced [alternative payment models] in recent years, 2025 is a pivotal year for Medicare’s value transformation,” the letter says. “The expiration of Medicare’s advanced [alternative payment model] incentive payments and sharp increase in qualifying thresholds is creating significant challenges for physician practices and hospitals as they plan for the years ahead.”

In addition to the AMA and Mass General Brigham, the signatories include Bethesda, Maryland-based Aledade, Austin, Texas-based Agilon Health, Washington-based Providence Health Connect Partners, the American Academy of Family Physicians, the Association of American Medical Colleges, the National Association of ACOs and the National Rural Health Association.

Since 2015, Congress has allotted funding for incentive payments to doctors with a certain percentage of reimbursements or patients connected to alternative payment models. Physicians who qualify for those payments are exempt from the Merit-Based Incentive Payment System, the formula that determines fee-for-service Medicare payments.

Qualified providers receive incentive payments on a two-year delay. For example, physicians who participated in alternative payment models in 2024 won’t receive bonuses until next year.

But two issues are plaguing the industry. First, Congress did not renew these payments after abandoning broad healthcare legislation in December, which allowed the 3.53% bonus to expire.

Additionally, the House-passed tax-and-spending cuts bill would reverse a payment update that offers advanced alternative payment model participants a higher rate than other providers beginning this year.

About 53% of fee-for-service Medicare enrollees are in accountable care arrangements, largely because of the payment incentives Congress and President Barack Obama enacted 10 years ago.

Some alternative payment models have generated substantial savings. For example, ACO Realizing Equity, Access and Community Health, or ACO REACH, generated $1.6 billion in gross savings in 2023.

A bill to revive the bonuses, the Preserving Patient Access to Accountable Care Act of 2025, has bipartisan, bicameral support but has not made it through the committee process in either chamber.

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