This bill adjusts how Medicare reimburses physicians by modifying the budget neutrality rules that govern fee schedule changes. It increases the threshold for budget neutrality adjustments from $20 million to $53 million starting in 2025, with subsequent increases indexed to inflation every five years. The legislation also creates a new system to correct payment errors when Medicare's estimates of how often services are used differ from actual usage, with corrections applied two years after the initial adjustment. Additionally, the bill requires Medicare to update the cost data used to calculate physician practice expenses at least once every five years and caps year-to-year fluctuations in physician payment conversion factors at 2.5 percent to provide more predictability in reimbursement rates. These changes primarily affect physicians and other healthcare providers who bill Medicare, and they take effect beginning in 2025 with no specific funding amount authorized.
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