Physicians are paid 33.6% less for treating Medicare patients than a decade ago thanks to reimbursement cuts coupled by rising practice expenses, according to a report from Omniscient Health, a healthcare data science, research and consulting firm.
The 2025 Omniscient Health Physician Medicare Income Report shows reimbursement rates for outpatient procedures from traditional fee-for-service patients in the Medicare health insurance program for the elderly have tumbled a cumulative 10% since 2016. The issue of cuts in physician Medicare payment has been an issue for years for physician groups led by the American Medical Association.
Meanwhile, the reimbursement picture is even worse for physicians who contract with privatized Medicare Advantage plans with physicians paid an estimated 10% to 15% less than for traditional Medicare patients, the report shows. This has impacted more physicians in recent years since more than half of all seniors eligible for Medicare are now enrolled in Medicare Advantage plans.
Omniscient Health’s report figured the hit to physician income when looking at the costs of operating a practice and a general U.S. inflation rate that has risen by nearly 30%, “significantly increasing the cost of staff salaries, rent, medical supplies, and technology,” a statement accompanying the report said.
“Falling reimbursements and rising costs have created a widening gap between what it costs to provide care and what physicians are paid to deliver it,” said Omniscient Health, chief executive officer Meade Monger. “With Medicare Advantage enrollment and underpayments factored in, the imbalance grows more dire.”
The Omnisient Health report is the latest this year on physician income that warns of problems patients will increasingly have accessing a primary care doctor. A report earlier this summer from the American Medical Group Association (AMGA) shows median primary care physician compensation at $330,000 for such doctors thanks largely to heavier workloads due in part to a shortage of medical care providers.
“Despite the rising demand for care from an aging U.S. population, the financial strain is forcing physicians to rethink whether they will continue serving Medicare patients,” Monger said. “High-volume Medicare practices, especially those in primary care and rural areas, are increasingly unable to sustain operations under current revenue structures. Without a significant change in reimbursement, the consequences for seniors will be serious, including restricted access that leads to delaying or forgoing care until it’s an emergency, hurting the patients’ quality of life while driving up healthcare costs.”
