CMS Proposes Changes to 2025 Physician Fee Schedule
Clinical Care Options
Clinical Care Options creates innovative, interactive education programs.
On July 10, 2024, CMS issued a proposed rule on a broad array of proposed changes to the Medicare Physician Fee Schedule and Medicare Part B payments for Calendar Year 2025. If finalized, the proposed changes would take effect January 1, 2025. The proposed rule includes many updates affecting a wide range of practitioners and providers. Medicare makes payments for the services of physicians and other billing professionals under the Physician Fee Schedule. The Fee Schedule pays for physician services provided in a variety of settings, such as hospitals, physician offices, ambulatory surgical centers, and various post-acute care settings. It also includes payments to suppliers of technical services for situations where payment is not made to an institution.
Physician Payment Cuts
In the proposed rule, overall Medicare payments to physicians and clinicians would be cut by a proposal to decrease average base payment rates by 2.93% from calendar year 2024. In the proposed 2025 Medicare Physician Fee Schedule, the multiplier, or “conversion factor” used to determine provider reimbursement in traditional Medicare, would drop from $33.29 this year to $32.36 next year — a 2.8% reduction.
Many specialty providers would be affected. Vascular surgeons, interventional radiologists, and diagnostic testing facilities would see reimbursements decline by 2%, the proposal estimates. Plastic surgeons, orthopedic surgeons, and urologists would face a 1% reduction. Other providers would fare better. Clinical social workers would see a 4% increase in reimbursements, clinical psychologists would net a 3% increase, and anesthesiologists would see a 2% increase.
The change to the conversion factor “incorporates the zero percent overall update required by statute, the expiration of the 2.93% increase in payment for CY 2024 required by statute, and a small adjustment,” according to CMS. A year ago, CMS proposed a 3.37% cut to payments for 2024. CMS implemented the rate decreases due to a statutory requirement that Medicare spending be budget neutral.
The proposal prompted more calls for Congress to overhaul the way Medicare sets payment rates —which requires that any payment increases be offset by equal cuts elsewhere in the program. When adjusted for inflation, Medicare physician payment has declined 29% from 2001 to 2024 , according to the American Medical Association. Congress stepped in over the past several years to enact some relief for doctors. Most recently, lawmakers passed a 1.68% boost in Medicare payments to doctors as part of a large spending package in March. The boost runs through the rest of the year and the healthcare industry has pushed for a permanent solution.
Telehealth
CMS issued several proposals related to telehealth payments. First, CMS proposes adding several services to the Medicare Telehealth Services List (on a provisional basis) including caregiver training services and demonstration prior to initiation of home International Normalized Ratio monitoring. Second, CMS proposes extending its current suspension of limitations on frequency for subsequent telehealth inpatient visits, nursing facility visits, and critical care consultations. Third, CMS proposes including two-way, real-time audio-only communication technology in the category of “interactive telecommunications system” for any telehealth service furnished to a beneficiary in their home if the distant site physician or practitioner is technically capable of using an interactive telecommunications system but the patient is not capable of, or does not consent to, the use of video technology.
Fourth, CMS will continue to allow a distant site practitioner to use their enrolled practice address instead of their home address even when the practitioner provides telehealth services from their home. Fifth, CMS proposes that for some telehealth services where there is a requirement that they are furnished under the direct supervision of a physician or other supervising practitioner to permanently adopt a definition of direct supervision that allows the physician or supervising practitioner to provide such supervision through real-time audio and visual interactive telecommunications. Sixth, CMS will continue to allow, for billing purposes, teaching physicians as a virtual presence when the medical resident is providing medical services in a virtual setting (only in clinical instances when the service is furnished virtually such as a three-way telehealth visit with the physician/resident/patient in different locations) through December 31, 2025.
Strengthening Primary Care
Under the proposed rule, CMS is proposing to implement various new payment and coding initiatives designed to strengthen access to and utilization of comprehensive primary care. CMS is proposing a new, advanced primary care management bundle. This proposed payment bundle 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 patient health outcomes.
CMS also proposes new payment and coding for cardiovascular-focused risk management and cardiovascular disease risk assessment furnished in conjunction with an evaluation and management visit. CMS proposes six new Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) centering around ophthalmology, dermatology, gastroenterology, pulmonology, urology, and surgical care. CMS is also proposing to update the MIPS scoring methodologies and measure inventories to give all clinicians the opportunity to achieve positive scores and continued improvement.
CMS also issued proposals with respect to accountable care organizations (ACOs). Eligible ACOs with a history of success in the Medicare Shared Savings Program will be allowed advances on their earned shared savings, also knowns as prepaid shared savings, in order to encourage investment in staffing, health care infrastructure, and additional services related to nutrition support, transportation, dental, vision, hearing, and Part-B cost-sharing reductions. For ACOs that serve individuals within rural and underserved communities, CMS also proposes a health equity benchmark adjustment similar to the approach utilized by the Innovation Center’s ACO REACH Model for ACOs. CMS is also proposing a methodology to account for the impact of improper payments when reopening an ACO’s shared savings and shared losses calculation.
Evaluation and Management Visits
CMS previously finalized add-on HCPCS code G2211 (Visit complexity inherent to evaluation and management associated with medical care services that serve as the continuing focal point for all needed health care services and/or with medical care services that are part of ongoing care related to a patient’s single, serious condition or a complex condition. (Add-on code, list separately in addition to office/outpatient evaluation and management visit, new or established)). Due to its cost and impact on the conversion factor, Congress delayed its implementation for 3 years, until 2024. CMS continues to provide more clarity around when it is appropriate to bill this code. In this rule, CMS proposes to allow payment of this add-on code when the E/M base code is reported by the same practitioner on the same day as an annual wellness visit, vaccine administration or Part B preventative service. CMS again emphasizes that the long-term relationship between the patient and the physician/physician practice — not the complexity of the patient’s condition — is the determining factor in proper use of G2211.
Global packages
CMS continues to review payment policies for global surgical packages but makes two proposals in this rule. For 2025, CMS proposes to require that practitioners report transfer of care modifiers for all 90-day global surgery packages whenever a practitioner plans to furnish only a portion of the global package whether there is a formal transfer or not, and develop an add-on code to address resources involved in post-operative care provided by a practitioner who did not perform the surgery (HCPCS code GPOC1). The net effect of the two proposals produces a positive budget neutrality adjustment, resulting from a reduction in values in the global package which are not all absorbed in the values attributed to the add-on code.
Expanding Preventive Services
In an effort to expand coverage of the hepatitis B vaccine, CMS is proposing to provide free hepatitis B vaccines to those individuals who have not received a vaccine or where the vaccination status of the individual is unknown. Under the proposal, these expanded coverage initiatives will allow individuals to receive hepatitis B vaccines from pharmacies. Pharmacies and mass immunizers will also be allowed to roster bill consistent with the current roster billing process for flu, pneumococcal, and COVID-19 vaccines. In addition, CMS is proposing to institute a fee schedule for drugs covered as additional preventive service. These drugs are currently not covered by CMS under the benefit category of additional preventative services.