CMS Finalizes 2025 Medicare Advantage Payment Rates
By Emma Freer

Despite a 0.16% reduction in base pay rate, Medicare Advantage plans are projected to see a 3.7% growth in revenue in 2025 thanks to a rising average patient risk score. 

The news comes out of the Centers for Medicare & Medicaid Services (CMS), which recently announced its final 2025 Medicare Advantage plan payment rates.  

Those rates represent a sharp contrast with the traditional Medicare physician payment rates, says Gary Sheppard, MD, an internist in Houston and chair of the Texas Medical Association Council on Socioeconomics. 

“Unlike [traditional] Medicare, where physicians get cut every year, the [Medicare Advantage] plans don’t get that,” he told Texas Medicine Today, adding that such plans historically have seen annual pay raises.  

While the 2025 Medicare Advantage adjustment represents a modest change from 2024, it remains to be seen how they will affect physicians and the Medicare Advantage patients for whom they care, Dr. Sheppard adds.  

“The [projected plan revenue] increases don’t necessarily go to physicians,” he said, explaining that physician payment under Medicare Advantage plans is based on patient outcomes. 

Physicians providing traditional Medicare services face a nearly 1.7% pay cut in 2024, following more than two decades of reductions that amount to a 30% pay decrease when adjusted for inflation, according to the American Medical Association. To prevent future cuts, TMA, AMA, and others in organized medicine continue to advocate for comprehensive reform.  

Meanwhile, enrollment in Medicare Advantage has grown steadily since 2003, when Congress incentivized private plans to participate in Medicare and renamed the option Medicare Advantage. Today, more than half of Medicare patients – in Texas and across the U.S. – are covered by the program, a share that grows as high as 72% along the Texas-Mexico border.  

TMA continues to monitor and educate its members about Medicare and Medicare Advantage. For assistance with insurance-related issues, check out TMA’s Payment Resource Center

Last Updated On

April 16, 2024

Originally Published On

April 16, 2024

Emma Freer

Associate Editor

(512) 370-1383

Emma Freer is a reporter for Texas Medicine. She previously worked in local news, covering city politics, economic development, and public health. A native Clevelander, she graduated from Columbia Journalism School and the University of St. Andrews.

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