Medicare physician payment update
Ask the Expert
By Apoorva Stull, Senior Manager, Advocacy Communications, October 1, 2025
DermWorld talks with Government Affairs and Health Policy Council Chair Melissa Piliang, MD, FAAD, about the one-year Medicare physician payment increase, the potential impact of the proposed 2026 Medicare physician fee schedule, and what the Academy is doing to fight for permanent Medicare physician payment reform.
DermWorld: What did the recent budget reconciliation bill include that would provide a one-year payment increase for Medicare physician payment?
While it’s short of the Academy’s ultimate goal of annual updates tied to inflation, it’s a first step to stem the annual cuts and a bright spot in a bill that otherwise saw deep cuts in health care, including Medicaid.
DermWorld: How did the Academy get the one-year increase in the budget reconciliation bill?
Dr. Piliang: The Academy has been hard at work advocating for our members to get a permanent solution for Medicare physician payment that includes fair reimbursements that are tied to inflation.
For instance, AADA President Susan C. Taylor, MD, FAAD, has personally advocated on behalf of the specialty in Washington, D.C., for Medicare payment reform by participating in a roundtable hosted by the House Republican Doctors Caucus, as well as several political events.
The AADA continuously worked with other specialty societies in a coalition to get Medicare physician payment action included in this budget reconciliation legislation. In April, the AADA joined 14 of the largest national medical societies, including the American College of Surgeons, the American College of Cardiology, and the American Academy of Family Physicians, and demanded that Congress take urgent action on Medicare physician payment reform as it began putting together the reconciliation legislation, which resulted in the insertion of a Medicare physician payment provision that was tied to a portion of the Medicare Economic Index (MEI).
In June, the AADA and 74 other national specialty societies, including the American Association of Neurological Surgeons, American Society of Anesthesiologists, and American Association of Orthopedic Surgeons, sent a letter to Senate Republican leadership urging them to include Medicare payment reform when it considered the reconciliation package.
This direct pressure resulted in the inclusion of the one-year physician pay bump after the Senate had initially removed the House’s MEI policy.
Rest assured, the AADA will continue to work with federal lawmakers to ensure a stable and sustainable payment system, including an annual inflationary update, for physicians and the patients they serve.
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DermWorld: How does the one-year payment increase impact the proposed 2026 Medicare physician fee schedule?
Dr. Piliang: The one-year 2.5% payment increase, provided by the One Big Beautiful Bill Act, raises physician payment rates in the 2026 Medicare physician fee schedule, marking the first increase in five years. While it helps prevent another across-the-board cut, the increase remains insufficient to keep pace with rising practice costs and inflation.
CMS proposes two separate conversion factors (CFs) for 2026, as required under the Medicare Access and CHIP Reauthorization Act (MACRA):
$33.5875 for items and services furnished by Qualifying APM Participants (QPs), a 3.84% increase over the 2025 CF
$33.4209 for all other physicians, a 3.32% increase over the 2025 CF
These figures incorporate the MACRA-mandated payment updates, a +0.55% budget neutrality adjustment, and the temporary 2.5% increase from the One Big Beautiful Bill Act.
DermWorld: How will the Academy continue its momentum for reforming Medicare physician reimbursement?
Dr. Piliang: The AADA continues to advocate for comprehensive, long-term Medicare payment reform to address the growing gap between physician reimbursement and the real cost of delivering care. The Academy has formed a new ad hoc task force that will focus on a permanent solution for Medicare physician payment reform.
DermWorld: What can members do to ensure that Congress reforms Medicare physician payment?
Dr. Piliang: 2,254 AADA members contacted Congress in 2024 in response to our grassroots advocacy action alerts, out of over 17,000 U.S. AADA members. Getting more of our members to engage in our grassroots efforts and respond to AADA advocacy action alerts is crucial to moving Medicare physician payment reform forward. Congress needs to hear directly from physicians about the impact of Medicare cuts on practices — and they need to hear from a larger number of members! Responding to AADA advocacy action alerts is quick and easy — we provide a message you can send directly to your members of Congress with just one click. We also provide talking points along with phone numbers to call your members of Congress.
Other ways to get involved include attending the AADA Legislative Conference. The 2026 AADA Legislative Conference will be held Sept. 13-15 in Washington, D.C. Attendees will hear from policy experts and receive advocacy training before meeting with their members of Congress and congressional staff. Members can also join our AADA Advocacy Key Contact program. Advocacy Key Contacts are advocates who develop and maintain relationships with their elected officials to advance AADA priorities, with support and resources from AADA staff. One important way we encourage Advocacy Key Contacts to build a relationship and educate their elected officials is by hosting a practice visit or participating in an in-district meeting with their legislators. Academy staff can help prepare Advocacy Key Contacts to host a successful visit or have a successful meeting locally.
Melissa Piliang, MD, FAAD, is chair of the AADA Government Affairs and Healthy Policy Council.
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