2025 Proposed Rule for The Physician Fee ScheduleTakeaways

The Centers for Medicare & Medicaid Services July 10 released its calendar year 2025 proposed rule for the physician fee schedule. The rule proposes to:

Cut the conversion factor by 2.8%, to $32.36 in CY 2025, as compared to $33.29 in CY 2024.

This reflects the expiration of the 2.93% statutory payment increase for CY 2024; a 0.00% conversion factor update under the Medicare Access and Children’s Health Insurance Program Reauthorization Act; and a .05% budget-neutrality adjustment.

According to the AMA, physician payments have declined 29% from 2001 to 2024, which does not account for the latest proposed reduction.

CMS predicts that the Medicare Economic Index - the measure of practice-cost inflation - will increase by 3.6%, widening the gap between what Medicare pays physicians and the cost of delivering quality care to patients.

Behavioral Health

CMS also makes several proposals designed to improve payment for and access to behavioral health care services. This includes a proposal to expand payments for opioid treatment programs for new FDA-approved overdose reversal medications and extend flexibility for the use of telehealth modalities by OTPs.

Telehealth

CMS proposes extension of certain telehealth waivers through 2025 including the waiver allowing for reporting of enrolled practice address instead of home addresses when providers perform services from their home, the waiver for federally qualified health centers and rural health clinics to bill for telehealth services, and the waiver for virtual supervision for residents in all teaching settings when the services are provided virtually.

Quality Payment Program (QPP)

Prior to the launch of the Quality Payment Program (QPP) on January 1, 2017, payment increases for Medicare services were set by the Sustainable Growth Rate (SGR) law. This capped spending increases according to the growth in the Medicare population, and a modest allowance for inflation.

For the Quality Payment Program, CMS proposes six new, optional Merit-based Incentive Payment System Value Pathways for reporting beginning in 2025. CMS also solicits comments on whether to mandate MVP participation beginning with the CY 2029 reporting period.

Medicare Shared Savings Program (Shared Savings Program)

ACOs are groups of doctors, hospitals, and other health care providers who collaborate to give coordinated high-quality care to people with Medicare, focusing on delivering the right care at the right time, while avoiding unnecessary services and medical errors. When an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, the ACO may be eligible to share in the savings it achieves for the Medicare program (also known as performance payments).

CMS includes proposals regarding the Medicare Shared Savings Program. For example, it would mitigate the impact of significant, anomalous, and highly suspect (SAHS) billing activity for CY 2024 and subsequent years. Specifically, CMS proposes to exclude payment amounts from financial calculations for the relevant calendar year for which the SAHS billing activity is identified, as well as from historical benchmarks used for reconciliation.

Primary Care

Components of the proposed rule aim to strengthen primary care. According to an HHS press release, CMS proposed establishing a new primary care management bundle that uses “coding describing certain primary care services that would be provided by advanced primary care teams, with adjustments for patient medical and social complexity to promote health equity.”

“These services would be tied to primary care quality measures to improve health outcomes for people with Medicare,” according to the release.

Evaluation and Management (E/M)

CMS is proposing to allow the G2211 office/outpatient (O/O) E/M care complexity add-on code, which was made newly payable in 2024, to be billed on the same date as preventive services.

CMS would allow G2211 to be paid when billed with an annual wellness visit (AWV), vaccine administration or any Medicare Part B preventive service furnished in the office or outpatient setting.

As a result, E/M codes appended with a modifier -25, to bill preventive services, may also be billed with G2211. This change is intended to better align with how primary care is delivered and support appropriate payment for physician work when they provide an E/M and a preventive service on the same date, while also accounting for the complexity involved in maintaining a longitudinal relationship with a patient.

Summary

Changes to #physician #reimbursement often stem from the budget neutrality requirement, which lacks a mechanism for inflationary adjustments. Disruptions occur when the value of specific services changes, affecting the reimbursement of other services to maintain budget neutrality. CodeToolz is committed to providing up to date coverage of changes in #Medicare and commercial payer fee schedules, the impact on physicians, and analyses on the fees used to pay doctors.

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