In its finalized 2025 physician fee schedule, CMS included an “efficiency adjustment” of negative 2.5% work relative value units, sparking an outcry among physicians.
Dozens of physician organizations condemned the rule and the reduction, with the American Medical Association arguing that reimbursement under Medicare will shrink for more than 7,000 physician services. This represents 95% of all services provided by physicians, according to the AMA, which has advocated for an alternative payment structure.
Four physician leaders joined Becker’s to discuss how the efficiency adjustment will affect their practice.
Editor’s note: Responses have been lightly edited for clarity and length.
Question: How will the 2.5% ‘efficiency adjustment’ change the way your system or practice approaches care?
Margaret Tracci, MD. Vascular Surgeon at University of Virginia Department of Surgery (Charlottesville): The “efficiency adjustment” — cutting wRVU by 2.5% based on the broad assumption that surgery has become faster and more efficient — is perhaps the most egregious example of payment policy that flies in the face of data. A recent study, based on high-quality registry data of over 1.7 million operations, found that between 2019 and 2023, cases have on balance taken longer — and patients being treated are sicker and more complex. Not to mention that “just operate faster” doesn’t exactly resonate with surgeons or patients as a safe or wise solution!
Triwanna Fisher-Wikoff, MD. Family Medicine Physician at Texas Health Care (Fort Worth): The 2.5% efficiency adjustment may seem small on paper, but its ripple effects across health systems — and especially within independent multispecialty groups like ours — could be significant. Because many physicians are employed under work-RVU–based contracts, this adjustment will almost certainly translate into lower compensation, particularly for procedural and specialty physicians. While primary care is largely shielded since time-based services are exempt, this risks deepening divisions between primary care and specialty colleagues — pitting one group against another within the same organization.
As an independent group that depends on collaboration between our primary care and specialty partners, I worry about the strain this could create internally. If CMS truly wants to improve efficiency and sustainability, we need to look beyond physician payments. The vast majority of Medicare spending growth comes from nonphysician costs — administration, pharmaceuticals and facility fees — not from the clinical workforce. Rather than fueling an “us versus them” mentality, policy should align incentives so that everyone moves forward together in building a more efficient and equitable healthcare system.
George Williams, MD. Ophthalmologist at the Illinois Society of Eye Physicians & Surgeons and Diplomate of the American Board of Ophthalmology (Vernon Hills): We are deeply disappointed that CMS decided to finalize the 2.5% efficiency adjustment for nontime-based codes, (i.e., surgical procedures, imaging and testing) and the cut to indirect practice expense for services provided in a facility setting by half. These policies are based on flawed assumptions about the practice of medicine and unfairly cut reimbursement for most surgical specialty care. Such arbitrary changes to Medicare payment policy threaten access to high-quality care, patient safety and the viability of physician practice Despite vocal opposition from the physician community, CMS plans to implement both policies with minimal changes on Jan. 1.
Alan Falkoff, MD. Family Medicine Physician at Stamford (Conn.) Health: Who determines what is efficient? All patients and cases are not the same. This also justifies the need to take away from any needed increases.
