The Trump administration has proposed a plan to increase Medicare payments for physicians and hospitals, with a focus on promoting high-value care and reducing healthcare costs.
Under the proposal, physician practices that participate in alternative payment models will receive a 3.8% pay bump next year, while doctors who don’t join these models will get a 3.3% increase. The plan also aims to reduce payments for medical billing codes not based on physicians’ time by 2.5%.
The Centers for Medicare and Medicaid Services (CMS) plans to adjust payment rates using a new calculation method that incorporates past five years of medical practice cost inflation. This change is expected to lead to more accurate valuation of services over time and address distortions in the current payment program.
The proposal has sparked reactions from various stakeholders, including policymakers, academics, and healthcare experts. Some praise the administration’s efforts to improve the Medicare payment system, while others argue that it doesn’t go far enough in addressing the root causes of high medical costs.
The plan includes several other changes, such as launching a mandatory payment experiment for specialists treating patients with chronic diseases, and altering reimbursement rates for skin substitutes and hospital outpatient services. The administration aims to boost Medicare payments for these services by $8.1 billion next year, while decreasing reimbursements for certain procedures like chemotherapy.
Overall, the proposal reflects the Trump administration’s push for site-neutral reimbursements, where healthcare providers are paid equally regardless of whether they deliver services in hospitals or clinics.
Source: https://www.axios.com/2025/07/15/doctors-medicare-pay-bump-2026