Highlights of Medicare’s proposed 2025 physician fee schedule

The Centers for Medicare & Medicaid Services (CMS) has unveiled its proposed rule for the 2025 Medicare physician fee schedule (MPFS). The following are among the notable proposals:

• A 2025 conversion factor of $32.3562, which is a 2.8% reduction compared to 2024. This is due to budget neutrality adjustments and the expiration of conversion factor relief enacted by Congress. Any time Medicare physician payments are estimated to increase by $20 million or more (due to either coverage for new services or rate increases for services already covered), CMS is required to offset that with cuts. In past years, Congress has avoided those cuts with an annual “doc fix” bill, and some lawmakers are discussing a more permanent solution this year.  (See the AAFP blog post "The 2025 MPFS Proposed Rule Is Here, and It’s Cause for Congress to Act.")
  
• Payment for G2211 (an add-on code for visit complexity) even in some instances when modifier 25 is used. If finalized, Medicare would pay for G2211 on claims that use modifier 25 to report a Medicare Annual Wellness Visit, vaccine administration, or Medicare Part B preventive service at the same encounter as an office/outpatient evaluation and management (E/M) service.
• New bundled payments for advanced primary care teams. CMS proposes to create three new codes for advanced primary care management services that bundle elements of several existing care management and communication technology-based services. Practices would need to meet several requirements before billing the codes, but CMS says this is a first step in a multiyear effort toward hybrid payment and accountable care. In conjunction with this proposal, CMS has released a request for information (RFI) to gather feedback on potential payment policies for advanced primary care services. 
• New advanced payments for accountable care organizations (ACOs). Beginning in 2026, ACOs could receive advanced payments for investing in infrastructure or staffing to improve care coordination and quality. The new “prepaid shared savings” option would be available to ACOs with a history of earning shared savings in BASIC Tracks C-E and the ENHANCED track.   
• Expansion of the primary care exception to Medicare’s teaching physician rules. The proposed rule includes an RFI on a potential permanent expansion of the list of services that fall under the primary care teaching exception. The exception allows teaching physicians to bill for services furnished by residents under certain conditions.  

The proposed rule is scheduled to be published in the Federal Register on July 31, and comments are due to CMS by Sept. 9, 2024. For additional information, please see the related CMS press release, MPFS fact sheet, and Medicare Shared Savings Program fact sheet.

— Kent Moore, AAFP Senior Manager, Payment Strategies

Posted on July 11, 2024