CMS Issues CY 2025 Medicare Physician Fee Schedule Final Rule

Background and Report Highlights

Final Rule Highlights

• On November 1, 2024, CMS released the final rule for Medicare Physician Fee Schedule (PFS) rates in CY 2025.
• For CY 2025, CMS is finalizing an RBRVS conversion factor of $32.35, representing a decrease of $0.94, or 2.83%, from the current CY 2024 conversion factor of $33.29. This final rule conversion factor is slightly lower than the previously proposed conversion factor of $32.36.
• CMS is also extending several select provisions providing flexibility in telehealth services that would have otherwise expired on January 1, 2025.
• CMS is also finalizing the establishment of coding and payment for a variety of services, including caregiver training, advanced primary care services, and cardiovascular risk assessment. 
• In keeping with its broader initiative, Behavioral Health Strategy, CMS is finalizing several modifications to expand access of behavioral health services to Medicare beneficiaries. 

In the coming weeks, visit hhvp.net for further analysis on the financial impact of these finalized changes.

Additional Details

Payment Updates

• RBRVS Conversion Factor Reduction: For CY 2025, CMS is finalizing a conversion factor of $32.35, a decrease of $0.94, or 2.83%, from the current CY 2024 conversion factor of $33.29.
  • This update reflects the removal of the temporary 2.93% payment increase (for services furnished from March 9 through December 31, 2024, as provided in the Consolidated Appropriations Act), a 0.0% statutory update factor, and a 0.02% positive RVU budget neutrality adjustment.  
  • Compared to prior years, the CY 2025 final rule does not include the same significant redistribution of RVU dollars across specialties. In contrast, expiration of the statutory payment increases is expected to result in a net decrease across most specialties.
• Time-Based Anesthesia Conversion Factor Reduction: CMS estimates a CY 2025 time-based anesthesia conversion factor of $20.31, which reflects the same overall PFS adjustments in addition to anesthesia-specific PE adjustments. This represents a decrease from the 2024 rate of $20.77.

Coding and Coverage Updates

• Office/Outpatient (O/O) and Evaluation and Management (E/M) Visits: For CY 2025, CMS is finalizing its proposal to allow payment of the O/O and E/M visit complexity add-on code G2211 when the base code is reported by the same practitioner on the same day as annual well visits, vaccine administration, or any Medicare Part B preventive service furnished in the office or outpatient setting.
  • Payment for the separately payable G2211 visit complexity add-on code was finalized in the CY 2024 PFS final rule. This add-on code is intended to reimburse for the time, intensity, and PE resources involved to establish longitudinal relationships with patients and to address healthcare needs with consistency and continuity over longer periods of time.
• Coding for Caregiver Training: CMS is finalizing its proposal to establish new coding and payment for caregiver training services (CTS), including but not limited to techniques to prevent decubitus ulcer formation, wound dressing changes, infection control, and medication administration. CMS is also finalizing the proposal to allow the proposed CTS to be furnished via telehealth as well as its proposal to establish coding and payment for caregiver behavior management and modification training. 
• Advanced Primary Care Management Services (APCM): For CY 2025, CMS is finalizing its proposal to establish coding payment under the PFS for a new set of APCM services through creation of three new HCPCS G-codes: G0556, G0557, and G0558.
  • The proposed services include elements of advanced primary care such as principal care management, transitional care management, and chronic care management.
  • Unlike existing care management services, these new service elements will not include any time-based thresholds, with the intention of reducing administrative burden. Instead, the newly created codes will be stratified into three levels based on number of chronic conditions and status as a Qualified Medicare Beneficiary. 
    • Specifically, Level 1 (G0556) is for persons with one chronic condition; Level 2 (G0557) is for persons with two or more chronic conditions; and Level 3 (G0558) is for persons with two or more chronic conditions and status as a Qualified Medicare Beneficiary.
    • Finally, based on stakeholder feedback, CMS is finalizing an increase in the valuation for the Level 1 code (G0556) and notes the agency may revisit the valuation for other services in future rulemaking.
  • Beginning January 1, 2025, physicians and nonphysician practitioners (NPPs) who use an advanced primary care model can bill for APCM services when they serve as the continuing focal point for needed service and are responsible for the patient’s primary care.
• Cardiovascular Risk Assessment and Management: For CY 2025, CMS is finalizing its proposal to establish coding and payment for atherosclerotic cardiovascular disease (ASCVD) risk assessment service and risk management services.
  • The risk assessment will be completed in conjunction with an E/M visit when a risk for cardiovascular disease (CVD) is identified for a patient who is not currently diagnosed with CVD.
  • CMS is also finalizing coding and payment for ASCVD risk management services. This will include service elements related to the “ABCS” of CVD risk reduction—aspirin, blood pressure management, cholesterol management, smoking cessation—for beneficiaries at intermediate, medium, or high risk for CVD in the next 10 years. 
• Add-On Code for Infectious Diseases: For CY 2025, CMS is finalizing a new HCPCS add-on code to describe intensity and complexity for hospital inpatient or observation care associated with confirmed or suspected infectious disease performed by a physician with specialized training in infectious disease. 
  • This will include service elements such as assessment of disease transmission risk and mitigation, public health investigation and analysis, testing, and complex antimicrobial therapy counseling and treatment.
• Part B Payment for Preventive Services: CMS is finalizing an expansion in coverage for the hepatitis B vaccine to include individuals who have not previously received a hepatitis B vaccination series or whose vaccination history is unknown. CMS is also finalizing policies to specify how a payment limit will be set for Drugs Covered as Additional Preventive Services (DCAPS drugs). For these drugs, CMS will utilize the ASP methodology when available, and will use an alternative payment mechanism if no ASP data is available. 
• Dental and Oral Health Services: CMS is finalizing several changes to the clinical scenarios and billing for dental services inextricably linked to covered services. This includes an addition of two clinical scenarios under which FFS Medicare payment may be made for dental services to include: 
  • Dental or oral examination in the inpatient or outpatient setting prior to, or contemporaneously with, Medicare-covered dialysis for treatment of end-stage renal disease.
  • Medically necessary diagnostic and treatment services to eliminate an oral or dental infection prior to, or contemporaneously with, Medicare-covered dialysis services for treatment of end-stage renal disease.
• Expanded Colorectal Cancer Screening: CMS is finalizing the removal of barium enema as a method of screening, as it is no longer recommended as an evidence-based method. CMS is also expanding coverage for screening to include computed tomography colonography (CTC). Finally, CMS is adding Medicare covered blood-based biomarker CRC screening tests as part of the continuum of screening.

Extension of Telehealth Provisions

• For CY 2025, CMS is finalizing several proposals to protect and expand various telehealth flexibilities, including:  
  • Addition of several services to the Medicare telehealth services list, including caregiver training (on a provisional basis) and pre-exposure prophylaxis (PrEP) for HIV prevention counseling and safety planning interventions (on a permanent basis). CMS is also finalizing the continued suspension of frequency limitations for subsequent inpatient visits, nursing facility visits, and critical care consultations for CY 2025.
  • Approval of two-way, real-time, audio-only communication if the physician or practitioner is technically capable of using an interactive telecommunications system but the patient is not capable of, or does not consent to, use of video.
  • Permanent adoption of a direct supervision definition that allows the physician or supervising practitioner to provide supervision through real-time audio and visual interactive telecommunications, only for a select subset of services. 
    • Specifically, supervising physicians may provide virtual direct supervision on a permanent basis for:
      1. Services furnished incident-to and provided by auxiliary personnel employed by the billing physician and working under their direct supervision, and for which the underlying HCPCS code has been assigned a PC/TC indicator of “5” and services described by CPT code 99211. 
      2. Office or other outpatient visits for the E/M of an established patient who may not require the presence of a physician or other qualified healthcare professional.
    • For all other services furnished incident-to that require direct supervision, CMS will continue permitting direct supervision through real-time audio and visual interactive telecommunications technology only through December 31, 2025.

Access to Behavioral Health

• For CY 2025, CMS is finalizing several changes to expand use and adoption of behavioral health services to align with its broader Behavioral Health Strategy. This includes establishing:
  • Coding and payment for safety planning interventions for patients in crisis through creation of an add-on G-code (to be billed in 20-minute increments) that would be billed along with an E/M visit or psychotherapy service.
  • A monthly billing code for follow-up services performed in conjunction with discharge from the emergency room for a crisis encounter. This will be established as a bundled service, including four phone calls per month. 
  • Medicare payment for digital mental health treatment devices (when furnished incident to or integral to professional behavioral health services) through creation of three new HCPCS codes.
  • Six new G-codes for practitioners in specialties whose covered services are currently limited by statute to diagnosis and treatment services. Applicable practitioners include clinical psychologists, clinical social workers, marriage and family therapists, and mental health counselors.
    • These would mirror current interprofessional consultation CPT codes used by practitioners eligible to bill E/M visits.

Other Updates

• Supervision for Physical Therapists (PTs) and Occupational Therapists (OTs) in Private Practice: CMS is finalizing the proposed regulatory change to allow for general supervision of physician therapy assistants (PTAs) and occupational therapy assistants (OTAs) by PTs and OTs in private practice. This will align with general supervision guidelines for PTs and OTs who work in institutional settings. 
• Certification of Therapy Plans of Treatment with a Physician or NPP Order: For CY 2025, CMS is finalizing amendments that will provide an exception to the physician/NPP signature requirement on a patient’s treatment plan in certain circumstances. Specifically, the exception will apply for purposes of the initial plan certification in cases where a written order or referral from the physician/NPP is on file and the therapist has provided evidence that the treatment plan was transmitted for the physician/NPP within 30 days of the initial evaluation. 
• Medicare Prescription Drug Inflation Rebate Program: CMS is codifying policies established in the Inflation Reduction Act of 2022 that create requirements for drug companies to pay inflation rebates if they raise their prices for certain Part B and Part D drugs faster than the rate of inflation.

Published November 6, 2024