The Centers for Medicare & Medicaid Services announced on Tuesday a proposal to significantly reshape the way Medicare compensates doctors and other healthcare providers, framing the changes as part of the Trump administration’s effort to prioritize primary and preventive care over treating patients after they are already sick.
The proposed updates would affect Medicare’s Physician Fee Schedule, the system used to determine how much doctors and clinicians are paid for services delivered to Medicare beneficiaries.
According to CMS, the goal is to make those payment amounts more precise by better reflecting the actual time, resources, and complexity that go into providing care. The agency also said it wants to make the process of calculating physician payment rates more transparent and improve oversight of billing practices in situations where submitted claims may not accurately represent the services that were actually provided.
A central theme of the proposal is moving Medicare away from a model that rewards the sheer volume of services delivered and toward one that focuses on producing better health outcomes for patients.
CMS Administrator Dr. Mehmet Oz commented on the scope of the changes, stating: “We’re proposing some of the most significant Medicare reforms in recent years to strengthen primary care, expand accountable care, and modernize physician payment.”
The agency said the proposed payment restructuring is specifically designed to bolster primary care services, preventive care, and improved care coordination for people enrolled in Medicare.
Among the notable changes, CMS said it plans to phase out traditional Merit-based Incentive Payment System, known as MIPS, reporting by 2029, steering clinicians instead toward reporting pathways that are more tailored to specific medical specialties. New reporting options would also be introduced for physicians who treat patients with diabetes, high blood pressure, or those receiving hospital care.
The proposal would also halt approximately $2.38 billion in bonus payments that currently go to clinicians who are not participating in advanced value-based care programs.
The proposal is now open for public comment, and CMS will consider that feedback before issuing a final rule.
