CMS 2025 Medicare Fee Cuts Explained: How Practices Can Adapt Their Billing Strategy

At ACCORDPRO, we help practices adapt to policy shifts like this every year. Here’s a quick breakdown of what the 2025 Medicare fee cuts mean—and practical ways to update your billing and revenue cycle strategies to minimize financial strain.

Protect Your Revenue and Stay Ahead of Reimbursement Changes

Every year, the Centers for Medicare & Medicaid Services (CMS) adjusts reimbursement rates—and 2025 is no exception. The newly announced Medicare fee cuts are creating concern for practices that rely heavily on Medicare patients for steady revenue.

What’s Changing in 2025?

CMS has finalized a new round of fee schedule cuts targeting certain Evaluation & Management (E/M) services, specialty procedures, and some diagnostic testing codes. Many providers can expect reductions in Medicare Part B reimbursements ranging from 1% to 3%—with some specialties facing deeper cuts.

While CMS aims to balance spending and value-based care goals, these reductions can squeeze margins for small and mid-sized practices already operating on tight budgets.

How This Impacts Your Practice

• Lower Reimbursements: The same services will pay less, directly reducing revenue per visit.

• Tighter Cash Flow: Small reductions add up quickly, especially for practices with high Medicare patient volume.

• Pressure on Operational Costs: Overhead, staffing, and supply costs aren’t going down—so fee cuts tighten margins further.

How to Adapt Your Billing Strategy Now

1. Audit Your Payer Mix 

Understand how much of your revenue depends on Medicare vs. commercial payers or cash-pay services.

What to Do:

• Run a payer mix report for the past 12 months

• Identify if you’re overly reliant on Medicare

• Explore ways to diversify, such as accepting additional commercial plans or offering cash-based services

2. Maximize Coding Accuracy 

Under-coding can cost you thousands—especially when every dollar counts. Proper coding ensures you capture the full allowed amount.

What to Do:

• Train your team on new E/M coding guidelines

• Use chart audits to catch under-billing

• Leverage certified coders or outsource coding reviews to ACCORDPRO

3. Tighten Denial Management 

With lower reimbursement rates, every denied claim hurts more than ever.

What to Do:

• Track denial trends monthly

• Appeal denials promptly and follow up aggressively

• Use automation or outsourced denial management to close revenue leaks

4. Improve Patient Collections 

If your practice hasn’t focused on patient balances, now is the time. With fee cuts, patient responsibility can be an important revenue stream.

What to Do:

• Verify insurance and benefits upfront to reduce surprises

• Collect copays and deductibles at check-in

• Offer clear payment plans for larger balances

5. Monitor KPIs and Adjust Quickly 

Real-time reporting is key to seeing how the cuts affect your bottom line month to month.

What to Do:

• Review key metrics like Days in A/R, Net Collection Rate, and Denial Rate

• Compare expected vs. actual reimbursement for your top 10 codes

• Adjust your workflow and staffing as needed to maintain profitability

Final Thoughts

Medicare fee cuts are beyond your control—but how you respond is not. By tightening your billing processes, expanding payer diversity, and maximizing collections, you can offset revenue losses and maintain financial health.

ACCORDPRO partners with practices nationwide to stay ahead of CMS changes, improve revenue cycle performance, and protect profitability.

Concerned about the impact of the 2025 fee cuts?

📞 Contact us at 425-215-0517 or visit www.accordpros.com to schedule a free revenue cycle checkup.