CMS Finalizes 2025 Medicare Physician Payment Cut

The Centers for Medicare and Medicaid Services (CMS) has finalized a cut to Medicare physician fee schedule payment that will take effect on Jan. 1, 2025, unless Congress intervenes to stop or mitigate the reduction.

The CY 2025 Medicare Physician Fee Schedule (PFS) final rule released on November 1 finalizes a 2025 conversion factor of $32.35, a decrease of 2.83 percent from CY2024. The cut is largely due to the expiration at the end of 2024 of a 2.93 percent positive payment adjustment provided by Congress.

This cut coincides with growth in practice costs, as CMS projects the increase in the Medicare Economic Index (MEI) for 2025 will be 3.5 percent. At the same time, the inflationary update for physician payment is statutorily set at zero through 2025.

Legislation is pending in Congress that would eliminate the cut and provide physicians with half of MEI in 2025. ACOI members are strongly encouraged to contact their members of Congress in support of the legislation, the Medicare Patient Access and Practice Stabilization Act (H.R. 10073).

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Other policies finalized by CMS and that were the subject of ACOI comments include:

• Beginning in 2025, the office/outpatient evaluation and management (E/M) visit complexity add-on code G2211 can be reported by the same practitioner on the same day as an annual wellness visit, vaccine administration, or any Medicare Part B preventive service, including the Initial Preventive Physical Examination, furnished in the office or outpatient setting.
• Absent congressional action, at the end of 2024, the COVID-era Medicare telehealth flexibilities will expire. These include waivers that temporarily lifted geographic and location restrictions on where telehealth services are provided.
• CMS finalized that it would continue to allow through Dec. 31, 2025 teaching physicians to have a virtual presence for purposes of billing for services furnished involving residents in all teaching settings, but only in clinical instances when the service is furnished virtually (for example, a three-way telehealth visit, with the patient, resident, and teaching physician in separate locations).
• CMS has established new coding and payment for caregiver training for direct care services and support.
• Beginning next year, CMS will pay for an Atherosclerotic Cardiovascular Disease (ASCVD) risk assessment service and risk management services. The ASCVD risk assessment will be performed in conjunction with an E/M visit when a practitioner identifies a patient at risk for cardiovascular disease (CVD) but who does not have a diagnosis of CVD. CMS is also finalizing coding and payment for ASCVD risk management services.
• CMS has finalized coding and payment for a new set of Advanced Primary Care Management (APCM) services described by three new HCPCS G-codes (G0556, G0557, G0558). Unlike existing care management codes, there are no time-based thresholds included in the service elements for these new codes which is intended to reduce the administrative burden associated with current coding and billing. The new APCM codes are stratified into three levels based on an individual’s number of chronic conditions and status as a Qualified Medicare Beneficiary, reflecting the patient’s medical and social complexity.

ACOI is analyzing the final rule and will share additional details on these and other policies over the next several weeks.