Industry News Items Included In This Issue

1. States Target Healthcare Consolidation
2. Prior Authorization Reforms in Congress
3. Medicare Physician Pay Cuts Prompt Calls for Reform
4. Physician Noncompete Agreements Banned in More States
5. Independent Practice Declines (Employment Trend)
6. Data-Sharing Enforcement: Info Blocking Penalties Begin
7. Budgeting for Big Staff Pay Hikes
8. Cutting Administrative Waste = Cost Savings
9. Nationwide Interoperability Makes Strides
10. AI Becomes a Top Priority for Medical Practices
11. Big Tech Launches Generative AI for Clinicians
12. CMS Shifts Course on Value-Based Care Models
13. HIPAA Security Rule Overhaul Draws Fire
14. Medicaid Unwinding Increases Uninsured Patients
15. Medicare Telehealth Flexibilities Extend
16. Bill Seeks to Prolong Telehealth Expansion
17. Controlled Substances via Telehealth - Rule in Flux
18. EHR Vendors Integrate AI into Workflows
19. Physicians Cautiously Embrace AI Tools
20. Medicare Advantage Must Address Prior Auth Burdens

1) States Target Healthcare Consolidation

Responding to concerns about mergers driving up costs, many states are enacting or proposing laws to rein in healthcare consolidation. For example, Massachusetts recently strengthened its transaction review process, and Indiana passed a new statute requiring reports of certain healthcare acquisitions ​hklaw.com​hklaw.com. In Q1 2025 alone, over a dozen states introduced bills to increase oversight measures, ranging from requiring state approval for hospital or practice mergers, to ownership transparency rules, and even restrictions on the corporate practice of medicine (CPOM)​ hklaw.com​hklaw.com. This flurry of state activity reflects bipartisan concern that unchecked provider consolidation (including private equity acquisitions of medical groups) may harm competition and patient costs. Practices considering mergers or sales should be aware of emerging state-level requirements.

2) Prior Authorization Reforms in Congress

A bipartisan House bill – the Reducing Medically Unnecessary Delays in Care Act of 2025 (H.R. 2433) – has been introduced to overhaul prior authorization in Medicare Advantage and Part D​ mgma.com​mgma.com. The bill would require that any prior auth denial or approval be reviewed by a qualified physician specialist and that insurers use evidence-based, transparent criteria. Physician advocacy groups (MGMA, AMA, and others) strongly support these reforms to curb bureaucratic delays and ensure patients get timely, medically appropriate care.

3) Medicare Physician Pay Cuts Prompt Calls For Reform

Physician organizations warn that Medicare’s 2025 physician fee schedule cut (around 2.8%), on top of rising practice costs, is threatening practice stability, ama-assn.org. Doctors face a fifth consecutive year of flat or declining Medicare payments, even as inflation (MEI ~3.5%) drives expenses up, ​ama-assn.org. Medical societies (AMA, MGMA) are lobbying Congress to provide an inflation-based payment update and to reinstate the 5% Advanced APM bonus that expired, arguing these steps are critical to sustain physician practices and access to care​ auntminnie.com​ auntminnie.com 

4) Physician Noncompete Agreements Banned in More States

A growing number of states have moved to ban or limit physician non-compete clauses, aiming to improve provider mobility and address physician shortages. In March 2025, Arkansas became the latest state to enact a law voiding noncompete agreements for any licensed physician in the state​ beckershospitalreview.com ​beckershospitalreview.com. That law takes effect in mid-2025 and is similar to recent measures in states like Illinois, Pennsylvania, Louisiana, and Rhode Island that curtail physician noncompetes. Indiana has also expanded its prior partial ban to cover all physicians as of July 1, 2025, eig.org. These state laws mean practices in certain states can no longer include noncompete clauses when hiring or contracting physicians (or such clauses won’t be enforceable). Practices should review their employment agreements in light of any new state restrictions.

5) Independent Practice Declines (Employment Trend)

The trend of physicians leaving private practice continues. MGMA reports roughly 80% of U.S. physicians are now employed by hospital systems or corporate entities​ mgma.com, citing low reimbursements and regulatory burdens as driving factors. This represents a sharp increase in physician employment in the past decade and a corresponding decline in independent physician-owned practices. For many doctors, the administrative overhead and financial pressures have made staying solo or small independent practitioners difficult, leading them to join larger organizations for stability. This consolidation trend could have long-term implications for competition and patient choice, and it’s fueling policy debates at both the state and federal levels.

6) Data-Sharing Enforcement: Info Blocking Penalties Begin:

New regulations are finally putting teeth into the 21st Century Cures Act’s information blocking prohibition. As of mid-2024, HHS (via the ONC and OIG) can penalize healthcare providers who unreasonably interfere with the access or exchange of electronic health information. Physicians participating in MIPS now risk a 0% score in their Promoting Interoperability category (25% of MIPS) if found to have engaged in information blocking​ cmadocs.org​ cmadocs.org. Likewise, ACOs in the Medicare Shared Savings Program face sanctions from January 2025 for any affiliated providers obstructing data sharing ​cmadocs.org. Practices are advised to review their EHR access policies and ensure compliance with information sharing requirements, as federal regulators move to enforce data interoperability rules more strictly.

7) Budgeting for Big Staff Pay Hikes

Medical practices are planning for significant staff salary increases in 2025 to attract and retain talent in a competitive labor market. An MGMA poll found about 35% of group practice leaders expect to budget higher-than-usual raises for cost-of-living and merit increases in 2025, ​renalandurologynews.com. Roughly half of practices will budget normal increases, and only 15% plan smaller raises. Front-line roles like billing specialists, medical assistants, and front desk staff are often slated for the most significant pay bumps, with many practices aiming for ~4–5% pay increases for those positions​ renalandurologynews.com. This continues the post-pandemic trend of rising healthcare wages after years of workforce shortages and inflation. For practices, it means operating budgets must account for heftier payroll costs as part of an overall strategy to maintain adequate staffing.

8) Cutting Administrative Waste = Cost Savings: 

Industry experts are urging practices to focus on reducing administrative waste, which accounts for an estimated 30% of all healthcare spending waste in the U.S.​ physicianspractice.com. Revenue cycle inefficiencies – from overly manual billing processes to cumbersome prior authorization workflows – are a prime target for improvement in 2025. Many organizations are now prioritizing the adoption of automation and AI tools to streamline administrative tasks and improve collections​ physicianspractice.com ​ physicianspractice.com. For example, automating claims status checks or using AI to flag denial patterns can free up staff time and accelerate reimbursements. By leveraging such technologies, practices can potentially reduce overhead costs and “leave less money on the table,” improving their financial performance amid tight margins.

9) Nationwide Interoperability Makes Strides

Efforts to improve health data exchange across organizations are gaining momentum. Over 2,000 hospitals and 50,000+ clinics using Epic are connecting to the new TEFCA national health information network framework for seamless record-sharing​ epic.com. In addition, the latest federal data standards (USCDI v3) and APIs are being widely implemented – Epic alone reports its API calls for patient data (using USCDI v3) have exceeded 8 billion in a year​ epic.com. These interoperability advances mean medical practices should increasingly be able to access outside records more easily, improving care coordination. Practices may need to ensure their EHR systems are updated to participate in these data exchanges, which are rapidly becoming the norm.

10) AI Becomes a Top Priority for Medical Practices 

The adoption of artificial intelligence in practice operations is gaining rapid momentum in 2025. In fact, a January MGMA survey revealed that AI tools have surpassed EHR improvements as the #1 technology priority for medical group leaders this year ​mgma.com. One-third of practices chose AI as their top tech focus (versus 30% for EHR usability and 17% for revenue cycle systems). Practices are especially interested in AI for documentation automation (using AI scribes or ambient voice tech to relieve clinicians), workflow optimization (automating scheduling, patient outreach, etc.), and enhancing patient interactions (such as AI-driven chatbots for appointment triage) ​mgma.com​mgma.com. This marks a big shift from just a year ago, reflecting growing confidence that AI can alleviate administrative burdens and improve efficiency in practice management.

11) Big Tech Launches Generative AI for Clinicians 

Tech companies are rolling out new generative AI-powered tools for healthcare. At HIMSS 2025, Google Cloud debuted enhanced AI search capabilities in its Vertex AI platform to help clinicians retrieve information more efficiently. The system can perform “multimodal” searches across text, images (like x-rays), and even genomic data, allowing doctors and nurses to quickly find relevant clinical notes or data from a patient’s record using natural language queries​ fiercehealthcare.com​ fiercehealthcare.com. This builds on Google’s earlier launches of medically tuned search AI (e.g., for EHRs) and incorporates its latest large models (like Gemini). Such tools aim to reduce the time clinicians spend hunting through charts for information, leveraging AI to surface answers in seconds. Early adopters report that these AI assistants can significantly cut down documentation and information retrieval time, though careful tuning is ongoing to ensure accuracy and reliability in clinical use.

12) CMS Shifts Course on Value-Based Care Models 

The CMS Innovation Center announced in March 2025 that it will sunset four major value-based payment models ahead of schedule and pivot to a new strategy​ bassberry.com​ bassberry.com. The models ending by the close of 2025 include Primary Care First, Making Care Primary, an ESRD Treatment Choices model, and Maryland’s Total Cost of Care All-Payer model. CMS’s analysis found these programs were not achieving expected savings – in fact, terminating them early is projected to save ~$750 million​ bassberry.com. In their place, CMS is planning fresh initiatives with a renewed focus on disease prevention, patient engagement, and fostering competition in healthcare markets. Practices participating in the affected models will need to transition as those programs wind down. Going forward, providers can expect new opportunities to join value-based arrangements under CMS’s forthcoming strategy, which aims to learn from past model shortcomings and emphasize interventions that keep patients healthier while lowering costs.

13) HIPAA Security Rule Overhaul Draws Fire 

HHS has proposed significant updates to the HIPAA Security Rule to bolster cybersecurity, but medical practice leaders warn the plan may be overzealous. In a March 2025 comment letter, MGMA criticized the proposal as “far too burdensome to implement” and threatening the viability of independent practices​ mgma.com. With many practices already stretched by compliance costs and low reimbursements, MGMA argues that additional complex security mandates could accelerate the trend of physician groups being acquired by more extensive systems. The association urged HHS to reconsider and withdraw the proposal, advocating instead for more practical, scalable security requirements.

14) Medicaid Unwinding Increases Uninsured Patients

Practices are bracing for impacts from the ongoing Medicaid continuous coverage “unwinding.” With pandemic-era enrollment protections lifted, states have been rechecking Medicaid eligibility and disenrolling people who no longer qualify (or who lapse in paperwork). By mid-2024, over 25 million Americans had been disenrolled from Medicaid coverage during this process​ kff.org. Strikingly, about 69% of those losses were due to procedural issues (paperwork/administrative problems) rather than the person being genuinely ineligible ​jamanetwork.com. This trend is likely continuing into 2025. For medical practices, the Medicaid churn may lead to more uninsured or under-insured patients seeking care, interruptions in continuity of care, and increases in inadequate debt/charity care. Practice managers should verify patients’ coverage at appointments and be prepared to connect some patients with insurance navigators or charity programs. Policymakers are monitoring the unwinding closely, and some states have paused disenrollments or simplified renewals to try to reduce erroneous coverage loss. In the meantime, practices should be aware of potential revenue impacts as a wave of patients move between Medicaid, marketplace plans, or uninsured status.

15) Medicare Telehealth Flexibilities Extended 

The latest federal spending measures extended Medicare telehealth waivers (such as allowing home-based telehealth and audio-only visits) through September 30, 2025, preserving expanded access that began during the pandemic​ telehealth.hhs.gov ​telehealth.hhs.gov. This means patients can continue receiving telehealth services from home with a broad range of providers for now. Physician groups are pushing Congress for more permanent telehealth legislation, noting the high utilization and patient benefits of virtual care.

16) Bill Seeks to Prolong Telehealth Expansion

Bipartisan legislation advancing in Congress would extend current telehealth flexibilities through 2026, as authorities weigh a longer-term post-pandemic strategy ​ama-assn.org ​ama-assn.org. Backed by organizations like the AMA, the proposal would preserve key measures (e.g., no geographic site limits and audio-only coverage) for two additional years. Stakeholders ultimately aim to cement telehealth policies permanently, given telemedicine’s proven value for patient access​ ama-assn.org.

17) Controlled Substances via Telehealth - Rule in Flux

The DEA’s proposed new rules on telehealth prescribing of controlled substances have sparked concern across the healthcare industry. The proposal would reinstate stricter requirements (such as mandating an in-person visit or a special registration for prescribing certain drugs via telemedicine) once the COVID-era waiver ends. Providers and telehealth advocates urge the DEA to withdraw or revise the rule, arguing that rigid in-person requirements and geographic restrictions would undermine patient access to needed treatments​ connectwithcare.org. Notably, the DEA has temporarily extended the pandemic teleprescribing flexibilities through the end of 2024, and stakeholders are pushing for a balanced long-term policy that safeguards care quality without disrupting access.

18) EHR Vendors Integrate AI into Workflows 

Electronic health record vendors are embedding AI and automation directly into EHR workflows. For example, Epic showcased a suite of generative AI features at the 2025 HIMSS conference, highlighting how AI is improving clinical and administrative tasks on its platform​ epic.com​ epic.com. Epic demonstrated AI “agents” that can autonomously assist with routine work – for instance, conversing with patients through MyChart to gather pre-visit information or scheduling follow-up tasks based on care gaps identified in the chart​ epic.com. They also outlined upcoming ambient documentation tools that convert clinician-patient conversations into structured notes and the ability to analyze videos or images and incorporate findings into the record​ epic.com. On the interoperability front, Epic reported that thousands of its client sites are live on national data exchange networks and using standardized APIs at an enormous scale ​epic.com. For practices using such EHR systems, these AI-driven enhancements could streamline workload and improve patient engagement, though proper training and governance will be key to implementation.

19) Physicians Cautiously Embrace AI Tools 

A new AMA survey of physicians finds that enthusiasm for health care AI is rising, alongside a demand for appropriate safeguards. By late 2024, 66% of physicians reported using some form of AI in their practice, a significant jump from 38% the year prior, ​ama-assn.org. A majority (68%) see at least some advantage to using AI for patient care. The top cited opportunity is reducing administrative workload through automation, noted by 57% of doctors,​ ama-assn.org. However, two in five physicians remain equally excited and concerned about AI. The survey showed doctors want key protections as AI use grows: 88% say having a channel to give feedback on AI tools is essential, and similarly large majorities want assurances on data privacy, EHR integration, and clarity on liability for AI-driven decisions ​ama-assn.org​ ama-assn.org. These findings indicate physicians are willing to adopt AI solutions, especially to streamline tasks, but expect regulators and vendors to ensure AI is safe, ethical, and integrated into clinical workflows responsibly.

20) Medicare Advantage Must Address Prior Auth Burdens

CMS is tightening oversight of Medicare Advantage (MA) plans’ prior authorization practices. Under a new rule effective for 2025, MA plans must publicly report prior authorization metrics – including approval and denial rates, appeal outcomes, and decision timeframes – with data broken out to identify any health equity impacts ​apta.org​apta.org. Plans are also required to add a health equity expert to their utilization management committees to review PA policies ​apta.org. The first annual PA impact reports are due by July 1, 2025, aiming to increase transparency and accountability for how MA prior auth may affect patient care.