Physician Fee Schedule Update and Improvements Act

This bill updates Medicare's physician fee schedule to better align with current healthcare costs and support providers. It extends a key deadline for geographic payment adjustments from 2024 to 2025, increases the rate for payment adjustments from 1.25% to 3%, and extends incentive payments for doctors in alternative payment models (APMs) through 2026. For 2026, it imposes payment reductions (34% for 4-6 years in APMs, 67% for 7+ years) but allows exceptions if providers increased their financial risk compared to 2025. The bill also raises Medicare's budget neutrality threshold to $53 million in 2025 and requires regular updates to cost data (like staff wages and equipment prices) every five years. These changes directly affect Medicare-participating physicians, especially those in APMs, by altering payment calculations and incentives.