Earlier this month, CMS released their 2025 Physician Fee Schedule proposed rule. While this is not final — as with all previous announcements of the Physician Fee Schedule, the rule may be changed owing to feedback from stakeholders — it still provides insight into CMS’ priorities in the coming year, as well as what to expect when the final rule is released in this Fall.
Today, we’re going to break down the proposed rule, including what changes have been made compared to previous years and how these alterations will affect the healthcare industry.
To start, this year’s proposed rule includes a 2025 conversion factor (CF) of $32.3562. While this is 0.05% higher than the finalized 2024 CF, it is technically a reduction of the CF to which physicians have recently become accustomed. That’s because, as of March 9th, there was Congressional intervention to support physician reimbursement. This 2.93% Congressional 2024 payment increase will expire by the time that the final rule comes into effect.
That said, there is some action supporting the movement to keep this Congressional payment increase. For example, the American Academy of Family Physicians (AAFP) recently put out a statement questioning the idea of removing this payment increase. In its place, the group suggested an “annual inflationary update to help physician payment rates keep pace with rising practice costs.”
Medical Group Management Association Senior Vice President of Government Affairs Anders Gilberg agreed with this sentiment in a statement, writing: “A 2.8% reduction to the conversion factor would be alarming in the best circumstances, but to propose doing so at a time when 92% of medical groups report increased operating costs and are otherwise struggling to remain financially viable is critically short-sighted.”
“Medicare physician reimbursement is on a dire trajectory and these ongoing cuts continue to undermine the ability of medical practices to keep their doors open and function effectively—the need for comprehensive reform is paramount,” the statement continues.
That said, barring action from Congress, which at the time of writing is uncertain, it is possible that the proposed 2.8% reduction in the CF will be finalized in CMS’ final rule.
Besides that, the proposed rule aims to enhance payment and access to behavioral health services, including opioid treatment programs for new FDA-approved overdose reversal treatments and specific telehealth flexibilities.
On the topic of telehealth, this is an area of healthcare that has become increasingly prominent since the beginning of the COVID-19 pandemic. Despite its rise, CMS has been hesitant to put permanent rules into place surrounding its use, instead relying on restrictions with sunset dates that keep being extended with every passing year.
This proposed rule appears different, as CMS seems to be trying to put an end to certain telehealth practices. Without Congressional action, the restrictions on geography, site of service, and practitioner type that were in place before the COVID-19 pandemic will be reinstated on January 1, 2025. After this date, Medicare beneficiaries must be in a rural area and a medical facility to receive non-behavioral health services via telehealth. As with the previous points, it is uncertain at the time of writing whether Congress will work to extend this expiry date.
These are amongst the most impactful changes proposed in this new rule. Naturally, there are also other aspects worthy of discussion, including its proposed updates to key value-based care programs, its updates to MIPS scoring methodologies and measure inventories, and its desired strengthening of the Medicare Shared Savings Program. However, given just how much can change between now and the final rule, these serve as more of an indication of CMS’ priorities, rather than definite changes to be finalized in the coming Fall.
As more industry players respond to these proposed changes, we will keep you updated to see how CMS adjusts its rule to adapt to the wants and needs of the healthcare industry.
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