On November 1, 2024, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2025 Revisions to Payment Policies Under the Physician Fee Schedule (PFS) and Other Revisions to Medicare Part B [CMS-1807-F] Final Rule, which includes policies related to Medicare physician payment and the Quality Payment Program (QPP). Physicians and other clinicians once again face large cuts; the cut for CY 2025 is 2.83%. The rule outlines the limitations of the current fee schedule structure, and while Congress has provided temporary partial fixes to physician payment in recent years, the relief expires at the end of 2024 unless legislation is passed.
In addition to the payment cuts, CMS finalized significant policies related to telemedicine, changes to the Merit-Based Incentive Payment System (MIPS) cost and improvement activity scoring, movement towards the MIPS Value Pathways (MVPs), and several other important policies.
Key takeaways from the CY 2025 PFS Final Rule:
- Conversion Factor (CF) Reduction: CMS finalized a 2025 CF of $32.3465, a reduction of more than 2.83% from the 2024 physician CF of $33.2875, and a 2025 anesthesia CF of $20.3178, representing a 2.20% reduction from the 2024 anesthesia CF of $20.7739.
- Add-On Code for Complexity: CMS finalized its proposal to expand the add-on code for complexity, G2211, by allowing it to be billed when the underlying evaluation and management (E/M) service is performed on the same day as an annual wellness visit, vaccine administration, or any Medicare Part B preventive service furnished in the office or outpatient setting.
- Telehealth: CMS maintains that it has limited statutory authority to extend most Medicare telehealth policies. Without congressional action, the major Medicare telehealth waivers will expire on December 31, 2024, and return to pre-COVID-19-public-health-emergency (PHE) policies.
- Merit-Based Incentive Payment System: CMS will maintain the MIPS performance threshold at 75 points but signaled efforts to move reporting towards the MVPs by 2029.
- Medicare Shared Savings Program (MSSP): CMS established a new prepaid shared savings option, created a health equity benchmark adjustment to encourage participation, aligned quality measure reporting with the Universal Foundation quality measures, and made adjustments to account for the impact of certain improper payments in program financial calculations.
- Health Equity: CMS finalized an add-on payment for conducting ongoing social determinants of health (SDOH) risk assessments, allowing initial visits for treatment with methadone to be provided virtually, and allowing audio-only periodic assessments. The rule also finalizes standalone G codes and payment for safety planning interventions and follow-up services post-discharge for a crisis encounter.
This content is for McDermott+ clients only; please contact your relationship consultant with questions. For inquiries, please contact info@mcdermottplus.com.
McDermott+ has developed an interactive dashboard that shows final Medicare fee-for-service payment rates for 2025 at the national and local level for services paid under the Medicare PFS. You can use this information to look at trends in national payment rates over the last five years and identify how service level payments differ across localities.
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