The Centers for Medicare & Medicaid Services (CMS) has officially released the CY 2025 Physician Fee Schedule (PFS) final rule, which will take effect on or after January 1, 2025. This rule outlines significant updates to Medicare payments and policies under Part B, aiming to foster a more equitable, accessible, and high-quality healthcare system for Medicare beneficiaries. For automotive repair businesses expanding into healthcare services or understanding the broader economic landscape, grasping these healthcare payment model shifts is crucial.
Understanding the Physician Fee Schedule (PFS)
Since 1992, the PFS has been the bedrock of Medicare payments for physician services and other healthcare professional billings. This encompasses a wide array of settings, from physician offices and hospitals to skilled nursing facilities and patient homes. Payments under the PFS cover not only physicians but also various suppliers for technical services, particularly in settings lacking institutional payments.
For services provided in office settings, Medicare generally issues a single payment rate. However, in facility settings like hospital outpatient departments or ambulatory surgical centers, the PFS rates for practitioners reflect only their resource contribution. Diagnostic tests and certain other services may have separate payments for professional and technical components.
Payment rates are calculated based on the resources needed to deliver a service, using Relative Value Units (RVUs) for work, practice expenses, and malpractice costs. These RVUs are converted into payment rates using a conversion factor, adjusted geographically to account for cost variations.
Impact of CY 2025 PFS on Payment Rates and Conversion Factor
The CY 2025 PFS final rule brings about an average reduction of 2.93% in payment rates compared to most of CY 2024. The estimated CY 2025 PFS conversion factor is set at $32.35, a decrease of $0.94 (2.83%) from the CY 2024 factor of $33.29. This change stems from the expiration of a temporary 2.93% payment increase and statutory requirements, alongside adjustments for work RVUs.
Enhancements in Caregiver Support and Training
Recognizing the vital role of caregivers, the CY 2025 PFS final rule introduces new coding and payment structures for caregiver training services (CTS). This includes training for direct care, such as preventing pressure ulcers, wound care, and infection control, as well as behavior management and modification training. These services can also be furnished via telehealth, expanding access to crucial support for caregivers.
Addressing Social Determinants of Health
CMS is actively seeking to refine policies around services addressing health-related social needs, including Community Health Integration (CHI), Principal Illness Navigation (PIN), and Social Determinants of Health (SDOH) Risk Assessment. The final rule summarizes feedback received on these services and hints at potential future policy adjustments to better integrate community-based organizations and auxiliary personnel into care delivery.
Office/Outpatient Evaluation and Management (E/M) Visit Updates
In a move to streamline billing for complex patient encounters, the CY 2025 rule allows payment for the O/O E/M visit complexity add-on code G2211. This can be applied when an O/O E/M base code (99202-99205, 99211-99215) is billed on the same day as an annual wellness visit, vaccine administration, or other preventive services, offering a more accurate reflection of service intensity.
Telehealth Services: Maintaining Access and Flexibility
While pre-COVID-19 telehealth restrictions are set to return in 2025, CMS is committed to preserving key flexibilities. The final rule adds caregiver training and PrEP counseling to the Medicare Telehealth Services List. Audio-only telehealth is also permanently allowed in specific scenarios, ensuring access for patients unable or unwilling to use video technology. Furthermore, virtual direct supervision for certain services and virtual presence for teaching physicians are extended through 2025, supporting continued telehealth adoption.
Advanced Primary Care Management Services (APCM)
CMS is prioritizing the strengthening of primary care through new coding and payment for Advanced Primary Care Management (APCM) services. Three new HCPCS G-codes (G0556, G0557, G0558) are introduced, bundling elements of existing care management services without time-based thresholds, aiming to reduce administrative burdens. These codes are tiered based on chronic conditions and Qualified Medicare Beneficiary status, acknowledging patient complexity.
Alt Text: Advanced Primary Care Model graphic illustrating the key components of comprehensive and patient-centered primary care services.
These APCM codes reflect lessons from CMS Innovation Center models like CPC+ and PCF, incorporating elements such as 24/7 access, comprehensive care management, and care coordination. While CMS is increasing the valuation for the Level 1 code (G0556), it is also considering further valuation adjustments in future rulemaking, indicating a commitment to supporting advanced primary care models.
Cardiovascular Risk Assessment and Management
Building on the success of the Million Hearts® Model, CMS is finalizing coding and payment for Atherosclerotic Cardiovascular Disease (ASCVD) risk assessment and management services. The ASCVD risk assessment, performed during an E/M visit for at-risk patients without existing CVD, utilizes a standardized tool to estimate 10-year ASCVD risk. Correspondingly, ASCVD risk management services, focusing on the ABCS of CVD risk reduction, will be covered for patients at intermediate to high risk, aiming to reduce cardiovascular events and improve patient outcomes.
Behavioral Health Service Expansion
In line with the CMS Behavioral Health Strategy, the CY 2025 PFS rule includes several provisions to enhance behavioral health access. Separate coding and payment are finalized for safety planning interventions for patients in crisis, including those at risk of suicide or overdose. Payment is also established for monthly post-discharge follow-up contacts after emergency department crisis encounters.
To further support mental healthcare, Medicare will now cover digital mental health treatment devices used under a behavioral health treatment plan. New HCPCS codes will describe these services, alongside six G-codes mirroring interprofessional consultation codes for mental health specialists.
Opioid Treatment Program (OTP) Enhancements
CMS is solidifying telehealth flexibilities for Opioid Use Disorder (OUD) treatment services within OTPs, including permanent allowance for audio-only periodic assessments and audio-visual for intake for methadone initiation. Payment increases are also finalized to reflect SAMHSA’s regulatory reforms, specifically for SDOH risk assessments during intake and periodic assessments, acknowledging the importance of addressing social needs in OUD treatment.
Alt Text: Visual representation of Opioid Treatment Program services, highlighting the integration of medication-assisted treatment, counseling, and support services for patients with opioid use disorder.
New add-on codes will support care coordination, referral services, patient navigation, and peer recovery support within OTPs, fostering a comprehensive approach to OUD treatment. Payment for new opioid agonist and antagonist medications, including nalmefene nasal spray and injectable buprenorphine products, is also being finalized.
Infectious Disease Management in Hospitals
A new HCPCS add-on code is introduced for hospital inpatient or observation care related to confirmed or suspected infectious diseases. This code recognizes the complexity and intensity of care provided by infectious disease specialists, encompassing disease transmission risk assessment, public health investigation, and complex antimicrobial therapy.
Refining Global Surgery Payments
To improve payment accuracy for global surgery packages, the rule expands the applicability of modifier 54 for 90-day global surgical packages, accommodating both formal and informal transfers of care. A new add-on code, G0559, will also account for post-operative care furnished by practitioners not involved in the surgery, ensuring appropriate reimbursement for post-operative services.
Supervision Policies for Therapists
Flexibility is increased for physical and occupational therapy services with a regulatory change allowing for general supervision of PTAs and OTAs by PTs and OTs in private practice. This change aims to improve patient access, especially in underserved areas, by aligning supervision policies with institutional settings.
Streamlining Therapy Plan Certifications
Administrative burdens for therapists are reduced by providing an exception to the physician/NPP signature requirement for initial certification of therapy treatment plans. This is applicable when a physician/NPP order is on file and the treatment plan is transmitted within 30 days of the initial evaluation, simplifying the certification process.
Dental and Oral Health Integration
Medicare is expanding coverage for dental services inextricably linked to covered medical services, specifically for dental exams and treatments needed prior to or during dialysis for end-stage renal disease patients. The KX modifier will be required for billing such dental services starting July 1, 2025, alongside mandatory diagnosis code submission on dental claims, improving claims processing and program integrity.
Drug Pricing and Payment Updates
Several clarifications and updates are made regarding drug and biological product payments under Part B. This includes refinements to the refund policy for discarded amounts of single-dose drugs, adjustments to payment limit calculations when negative or zero Average Sales Price (ASP) data is reported, and clarifications on radiopharmaceutical payment methodologies in physician office settings.
Immunosuppressive therapy coverage is expanded to include certain compounded formulations, alongside payment for up to 90-day supplies and refills, enhancing medication adherence. Clarifications are also provided for blood clotting factor treatments and the applicability of furnishing fees.
Rural Health Clinic (RHC) and Federally Qualified Health Center (FQHC) Modernization
Significant changes are finalized for RHCs and FQHCs, including reporting individual CPT and HCPCS codes for care coordination services instead of the G0511 code, improving payment accuracy. APCM service coding and policies are also adopted for RHC and FQHC payments. Telehealth flexibilities are extended, with continued payment for non-behavioral health telehealth visits through 2025 and delayed in-person visit requirements for mental health telehealth until 2026.
Alt Text: Image depicting a Rural Health Clinic, emphasizing its role in providing essential healthcare services to underserved rural communities.
Payment rates for IOP services in RHCs and FQHCs are updated, and preventive vaccine billing at the time of service will be allowed starting July 1, 2025, improving payment timeliness. Dental services inextricably linked to medical services in RHCs and FQHCs are clarified as covered services. Outdated RHC productivity standards are removed, and the FQHC market basket is rebased and revised to reflect current cost structures. RHC Conditions for Certification are updated for greater flexibility and reduced provider burden.
Ambulance Services and Preventive Care
The definition of ALS2 ambulance services is expanded to include prehospital blood transfusions, acknowledging the complexity of these interventions. Medicare Part B coverage for hepatitis B vaccines is broadened to include all unvaccinated individuals or those with unknown vaccination history, alongside clarified payment policies for preventive vaccines in RHCs and FQHCs.
A fee schedule for Drugs Covered as Additional Preventive Services (DCAPS) is finalized, with payment limits based on ASP methodology. PrEP for HIV drugs will be covered under this DCAPS fee schedule starting January 1, 2025, expanding access to vital preventive medications.
Colorectal Cancer Screening Expansion
Colorectal cancer (CRC) screening coverage is updated to include computed tomography colonography (CTC) and blood-based biomarker CRC screening tests, while barium enema is removed. These changes aim to improve CRC screening access and early detection, particularly in underserved communities.
Prescription Drug Inflation Rebate Program
Policies for the Medicare Prescription Drug Inflation Rebate Program are codified, including rebate reconciliation methods and civil money penalties for non-compliance. CMS is also exploring a Medicare Part D claims data repository to refine rebate calculations related to 340B drug units.
Electronic Prescribing for Controlled Substances (EPCS)
The timeline for EPCS compliance in long-term care facilities is extended to January 1, 2028, aligning with the adoption of updated NCPDP SCRIPT standards and allowing for smoother implementation.
Conclusion
The CY 2025 PFS final rule represents a comprehensive update to Medicare Part B payment policies, with significant implications for primary care and various healthcare sectors. Key themes include enhanced support for advanced primary care models, expanded telehealth access, increased focus on behavioral health and social determinants of health, and streamlined administrative processes. For automotive repair businesses diversifying into healthcare or analyzing economic trends, these changes highlight the dynamic nature of healthcare reimbursement and the growing emphasis on preventive, coordinated, and value-based care. Understanding these shifts is crucial for navigating the evolving healthcare landscape and identifying future opportunities.
