Medical fee, Health insurance, Doctor writing medication note

The comment period for the CMS CY 2025 Physician Fee Schedule (PFS) Proposed Rule recently closed on Monday, September 9th. Based on previous years, the Final Rule can be expected as soon as early November, taking effect January 1, 2025. The Proposed Rule contains changes to various policies as well as extensions of policies set to expire in 2024.

How Might these Changes Affect You and Your Business?

CMS oversees multiple federal programs including Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and certain health insurance marketplaces. With payments by these programs for health services in 2024 projected to approach $2 trillion, CMS can be considered by far the largest payor in the United States. With such a large market share, any changes issued by CMS have a trickle-down effect throughout the health care industry, regardless of whether the primary reimbursement a provider receives is federally funded or from private insurance. Staying up to date on CMS policies can help you and your business anticipate changes in the industry, whether or not they appear to affect your business at first blush.

New and Expanded Codes

CMS proposes new or expanded codes for both CPT codes—used universally by payors—as well as G codes used solely by Medicare. Most notably, several new G codes overhaul Medicare reimbursement for Advanced Primary Care Management, turning to a level-based system dependent on factors like the number of chronic conditions a patient is experiencing. This focus on primary care, alongside other efforts for quality improvement and innovation, is part of the Biden administration’s drive toward whole-person care. Other new or expanded codes implicate interprofessional consultations, digital mental health treatments, services addressing the social determinants of health, cancer screenings, and dental services. CMS also solicited public input on a number of existing codes, indicating a potential openness to amend them in future years.

Physician Reimbursement

The PFS conversion factor is a variable used in converting value units for services rendered to dollar amounts for payor reimbursement. Due to statutory constraints mandating that PFS spending may not increase more than $20 million year over year, the conversion factor usually decreases when codes are added or expanded upon. The proposed 2.8% decrease to the 2025 conversion factor will result in payment reductions for many services.  

This decrease, however, has the potential to be much higher based on how the final rule shakes out. CMS was able to hold the decrease to 2.8% due to major proposed changes to reimbursement for surgical packages. These packages include not only surgery, but also pre- and post-operative care and other associated services. CMS proposes policy changes that would dramatically reduce payment for longer-term surgical packages where follow-up care is provided by a separate practitioner than the surgeon. The estimated cost savings are spread across all other codes. However, if these proposed changes are rejected, the PFS conversion factor decrease may far exceed 2.8%.

Telehealth and Tele-supervision

Telehealth and tele-supervision of health care providers exploded during the COVID-19 pandemic. As we enter the post-pandemic world, pressure for continued access to remote care continues. With Congress’s temporary extension of telehealth flexibilities set to expire at the end of 2024, the Proposed Rule contains many provisions expanding, extending, or modifying telehealth and tele-supervision of providers. This includes:

  • Adding services to the telehealth-approved list;
  • Extending the suspension of frequency limitations for certain services implicating telehealth;
  • Approving audio-only telehealth in some situations;
  • Extending flexibilities regarding a practitioner’s telehealth “address” for an additional year;
  • Approving Medicare payment for certain digital mental health treatments;
  • Extending and expanding telehealth options for opioid treatment;
  • Extending and expanding telehealth and tele-supervision for Rural Health Clinics and Federally Qualified Health Centers;
  • Amending electronic prescribing regulations for long-term care facilities;
  • Extending and expanding tele-supervision capabilities of supervising practitioners over auxiliary employees providing services to patients;
  • Extending tele-supervision of residents by teaching physicians in certain telehealth situations; and
  • Expanding tele-supervision of PT and OT assistants.

What the Future Holds

These are just a sampling of the changes CMS proposes in its rule. Additionally, CMS issued broad requests for information and public input on a number of topics, indicating it might seek to amend policies in these areas in the coming years. Want to learn more about these changes and their impact on you and your business? Reach out to Margaret F. Sport or other members of Fox Rothschild’s Health Law group. More information can be found at www.foxrothschild.com/health-law.