Running a private practice today means juggling skyrocketing costs for staff, malpractice insurance, and cutting-edge technology while watching reimbursements erode year after year. The result? More doctors are forced to sell their practices to hospitals or large health systems, reducing patient choice and driving up overall healthcare costs.
A new bill from Congress may help stop the bleed.
What Is The Problem With Physician Pay Cuts?
According to the American Medical Association, Medicare physician payments have declined more than 30% since 2001 when adjusted for inflation. For independent practices—especially in rural and underserved areas like the Gulf Coast where I practice neurosurgery—this isn’t abstract policy. It’s the difference between keeping the doors open, selling a practice to a large healthcare conglomerate, or shuttering for good.
This consolidation harms patients. It reduces choice, often leads to longer wait times, and drives up costs: hospital-owned practices frequently bill at higher facility rates, increasing both Medicare spending and patients’ out-of-pocket expenses. Studies show this shift to a more expensive vertically integrated hospital setting does not reduce healthcare costs.
What Is Congress Doing About Physician Pay Cuts?
Provider Reimbursement Stability Act of 2025, a bipartisan bill set to be introduced this week in the House. Sponsored by physician-lawmakers including Reps. Dr. Greg Murphy (R-N.C.), Dr. John Joyce (R-Pa.), Dr. Marianette Miller-Meeks (R-Iowa), Dr. Bob Onder (R-Mo.), and Democratic colleagues Brad Schneider (D-Ill.), Tom Suozzi (D-N.Y.), Jimmy Panetta (D-Calif.), and Dr. Kim Schrier (D-Wash.), the legislation targets the root causes of the annual reimbursement roller coaster without pretending to be a complete overhaul.
What Does The Bill Actually Do To Help Physicians Treat Patients?
The bill would cap annual Medicare physician reimbursement cuts at 2.5%—providing a predictable ceiling that allows practices to budget and plan rather than brace for the unknown each fall. It also gives the Centers for Medicare & Medicaid Services (CMS) greater flexibility to consider medical inflation in limited circumstances when setting fees and requires more frequent, accurate updates to the relative value units (RVUs) that form the backbone of payment calculations. These RVUs would be reviewed at least every five years against real-world practice costs, correcting a long-standing flaw in the system.
Equally important, the legislation reforms Medicare’s outdated “budget neutrality” rule. Currently, any spending increase above a $20 million threshold—set more than three decades ago in the Omnibus Budget Reconciliation Act of 1989 and never adjusted for inflation—must be clawed back elsewhere, often through across-the-board cuts. The bill raises that threshold to $54.3 million and indexes it to medical inflation every five years, giving CMS breathing room to make targeted improvements without punishing all physicians.
Perhaps most critically, the measure addresses CMS’s flawed utilization forecasts for new billing codes. Time and again, overly optimistic projections have triggered billions in unintended cuts once actual claims data roll in. The bill would require CMS to revisit those estimates using real-world data and adjust payments accordingly. Doctors and patients shouldn’t bear the cost of forecasting errors when budgets are projected.
This bill does not actually increase physician payment or upend the entire Medicare payment framework—goals that have eluded physician lobby groups in Congress for years. It’s about injecting predictability into a system that has become unsustainable for the very physicians treat Medicare patients.
How Does This New Bill Impact Patients?
Patients should care deeply about the Provider Reimbursement Stability Act of 2025 because unchecked Medicare physician payment cuts are quietly eroding the foundation of American healthcare.
Here’s how this plays out in the real world:
Consider the hypothetical Mrs. Eleanor Thompson, a 72-year-old retiree in a small Gulf Coast town near Mobile, Alabama For 25 years she has seen the same independent family physician, Dr. Smith, who knows her diabetes, her heart condition, and the names of her grandchildren. But after years of Medicare payments that have fallen more than 30% when adjusted for inflation—while staff salaries, malpractice insurance, and equipment costs keep climbing—Dr. Smith can no longer keep his doors open as an independent practice. Last month he reluctantly sold his clinic to a large regional hospital system. Now Mrs. Thompson’s routine check-up is scheduled through the hospital outpatient department, where the same visit costs her higher copays because of hospital outpatient facility fees. She waits three weeks instead of three days for an appointment, sees a rotating group of providers who barely know her history, and feels the personal connection slipping away. Dr Smith tries to fight for more resources for his patients, but this doesn’t materialize within the hospital’s global budget.
Stories like Mrs. Thompson are repeating across rural and coastal communities, turning what used to be convenient, affordable local care into a more expensive, impersonal system.
Patients should care about this bipartisan bill for three important reasons:
Three Reasons Patients Should Care About This Bill:
- Preserving Access and Choice in Your Community When Medicare cuts make it unsustainable for independent or small practices to survive, doctors are often forced to join large hospital systems or retire early. This reduces patient options, especially in rural and underserved areas like the Gulf Coast. You may end up traveling farther, waiting longer for appointments, or losing the personal relationship with a physician who knows your history. The bill’s stability measures help keep independent practices viable, maintaining the diversity of care settings patients rely on.
- Preventing Higher Overall Healthcare Costs Consolidation driven by payment instability typically leads to higher prices. Hospital-owned practices often bill at facility rates that are significantly more expensive than independent offices, driving up premiums, out-of-pocket costs, and taxpayer burdens for Medicare itself. By curbing the annual “reimbursement roller coaster” and fixing technical flaws like budget neutrality and forecasting errors, the bill slows this consolidation trend and helps restrain long-term cost growth that ultimately gets passed on to patients and families.
- Protecting Quality and Timely Care for Medicare Beneficiaries Physicians facing repeated cuts and uncertainty divert time and resources toward administrative survival rather than investing in staff, technology, or expanded services. This contributes to burnout, workforce shortages, and reduced capacity to accept new Medicare patients. The Provider Reimbursement Stability Act injects predictability—capping cuts, allowing better reflection of real medical inflation, and requiring accurate RVU updates—so doctors can plan, innovate, and continue delivering high-quality care without the constant threat of sudden financial hits that compromise patient access.
The Provider Reimbursement Stability Act won’t solve every problem, but it represents meaningful, achievable progress, for patients.
