The Centers for Medicare & Medicaid Services (CMS) has proposed significant policy updates for Medicare payments under the Physician Fee Schedule (PFS) starting January 1, 2025. These proposed changes, announced on July 10, 2024, are open for public comment and aim to foster a more equitable, accessible, and higher quality healthcare system for all Medicare beneficiaries. This article breaks down the key aspects of the CY 2025 PFS proposed rule, focusing on how these changes might influence Which Diagnosis Would Be Included In The Plan Of Care and impact healthcare providers and patients.
Understanding the Physician Fee Schedule
The PFS has been the bedrock of Medicare payments for physician services since 1992. It covers a wide array of settings, from physician offices and hospitals to skilled nursing facilities and patients’ homes. Payments under the PFS are made to physicians and other billing professionals, as well as to suppliers for technical services.
The payment structure differentiates between services provided in physician offices and facility settings like hospital outpatient departments or ambulatory surgical centers (ASCs). Office-based payments cover the full range of resources, while facility-based payments account only for the practitioner’s resources. For certain diagnostic tests and services, Medicare may provide separate payments for professional and technical components.
Payments are resource-based, utilizing relative value units (RVUs) for work, practice expense, and malpractice expense. These RVUs are converted into payment rates using a conversion factor, adjusted geographically, and updated annually as mandated by statute.
CY 2025 PFS Rate Setting and Conversion Factor Adjustments
The proposed rule outlines a potential 2.93% decrease in average payment rates under the PFS for CY 2025 compared to most of CY 2024. This adjustment is primarily due to the expiration of a statutory 2.93% payment increase from CY 2024 and a minor 0.05% adjustment for changes in work RVUs for specific services. The estimated CY 2025 PFS conversion factor is proposed at $32.36, a $0.93 (2.80%) reduction from the current CY 2024 factor of $33.29. This rate adjustment has broad implications for the financial planning of healthcare practices and the overall healthcare economy.
Enhancing Ambulatory Specialty Care Models
CMS is exploring the development of an ambulatory specialty care model to boost specialist engagement in value-based care. This Request for Information (RFI) seeks input on using Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) to incentivize better coordination between primary and specialty care. The envisioned model would replace MIPS adjustment payments with adjustments based on MVP measures and specialist performance relative to their peers. Future model tests would be proposed through subsequent rulemaking, ensuring stakeholder input. This initiative underscores the importance of integrated care approaches in modern healthcare delivery.
Introducing Caregiver Training Services (CTS)
A significant proposal for CY 2025 is the establishment of new coding and payment for caregiver training services (CTS). These services aim to equip caregivers with essential skills for direct care and support, potentially covering areas like preventing pressure ulcers, wound care, infection control, dietary needs, and medication management. Separate coding and payment are also proposed for caregiver behavior management and modification training. Importantly, the proposed CTS would be eligible for telehealth delivery, expanding access to crucial caregiver support and indirectly enhancing patient care quality at home. This recognizes the vital role of caregivers in the overall patient care ecosystem.
Addressing Health-Related Social Needs through Integrated Services
CMS is actively seeking feedback on the newly implemented Community Health Integration (CHI) services, Principal Illness Navigation (PIN) services, and Social Determinants of Health (SDOH) Risk Assessment. This RFI aims to refine policies for future rulemaking, focusing on auxiliary personnel roles (including clinical social workers), certification and training requirements, and improving service utilization in rural areas. The integration of community-based organizations in service delivery is also under consideration. These initiatives directly acknowledge the impact of social determinants of health on patient outcomes and aim to create more holistic care plans. Understanding which diagnosis would be included in the plan of care now necessitates a broader consideration of social context.
Office/Outpatient (O/O) Evaluation and Management (E/M) Visit Complexity
For CY 2025, CMS proposes allowing payment for the O/O E/M visit complexity add-on code G2211 alongside annual wellness visits (AWVs), vaccine administrations, and other Medicare Part B preventive services in office or outpatient settings when furnished by the same practitioner on the same day. This proposal aims to recognize the added complexity when E/M services are delivered in conjunction with preventive care, potentially improving reimbursement for comprehensive patient encounters.
Expanding Telehealth Services under PFS
Telehealth continues to be a priority, with CMS proposing to add several services to the Medicare Telehealth Services List provisionally. These include home International Normalized Ratio (INR) monitoring initiation and caregiver training services. The suspension of frequency limitations for subsequent inpatient visits, nursing facility visits, and critical care consultations is proposed to continue through CY 2025, ensuring ongoing telehealth flexibility.
The proposed rule also addresses audio-only telehealth, suggesting that interactive audio-only communication may be acceptable for telehealth services in a beneficiary’s home if video technology is not feasible or consented to by the patient, provided the distant site physician is technically capable of video. Practitioners would also be allowed to continue using their enrolled practice location instead of their home address for telehealth through CY 2025, reducing administrative burdens.
Furthermore, the rule proposes to permanently adopt virtual direct supervision via real-time audio and visual telecommunications for certain services requiring direct supervision, specifically for services incident to a physician’s service provided by auxiliary personnel under direct supervision for established patient E/M visits in office or outpatient settings. For other directly supervised services, “immediate availability” via telehealth is proposed to extend through December 31, 2025. Teaching physicians would also be allowed virtual presence for resident-involved services in all teaching settings until December 31, 2025, maintaining telehealth options in medical education. These telehealth expansions are crucial for enhancing access to care, particularly for patients in rural or underserved areas, and for integrating technology into standard care delivery.
Advanced Primary Care Management Services (APCM)
Recognizing the critical role of primary care, CMS proposes new coding and payment for Advanced Primary Care Management (APCM) services, described by three new HCPCS G-codes. These bundled services incorporate elements of existing care management and communication technology-based services, reflecting essential components of advanced primary care, including Principal Care Management, Transitional Care Management, and Chronic Care Management. The APCM codes are stratified into three levels based on chronic conditions and Qualified Medicare Beneficiary enrollment, acknowledging patient medical and social complexity. This new coding framework is informed by CMS Innovation Center models like CPC+ and PCF and aims to simplify billing and documentation.
Payment for APCM services would be contingent on practitioners being the central point of contact for all necessary healthcare services and responsible for comprehensive primary care. A performance measurement requirement is also proposed, satisfied by reporting the Value in Primary Care MIPS Value Pathway (MVP). This new approach aims to better recognize and incentivize advanced primary care, encourage practice transformation, and improve patient access to high-quality primary care services. The focus on chronic conditions directly influences which diagnosis would be included in the plan of care and how primary care practices are incentivized to manage complex patient needs.
Cardiovascular Risk Assessment and Management Enhancements
Building on the lessons from the Million Hearts® Model, CMS proposes coding and payment for Atherosclerotic Cardiovascular Disease (ASCVD) risk assessment and risk management services, starting in CY 2025. The ASCVD risk assessment, performed with an E/M visit for patients at risk without a CVD diagnosis, will utilize a standardized, evidence-based tool incorporating demographic data, modifiable risk factors, risk enhancers, and lipid panel data to estimate 10-year ASCVD risk. ASCVD risk management services, focusing on the ABCS of CVD risk reduction (aspirin, blood pressure, cholesterol, smoking cessation), are proposed for beneficiaries at medium or high risk (>15% 10-year risk). These proposals aim to increase access to vital cardiovascular interventions and reduce heart attack and stroke rates among Medicare beneficiaries.
Strategies for Global Surgery Payment Accuracy
To enhance the accuracy of global surgery payments, CMS proposes broadening the application of transfer of care modifiers for global packages. The existing modifiers (-54, -55, and -56) would be required for all 90-day global surgical packages when a practitioner expects to furnish only pre-operative, procedure, or post-operative portions, regardless of formal transfer of care documentation. This expanded modifier use aims to provide CMS with more precise data on resource utilization in global surgical packages, informing more accurate Medicare payments. A new add-on code, GPOC1, is proposed for post-operative care services to better compensate practitioners who provide post-operative care without performing the surgical procedure.
Expanding Access to Behavioral Health Services
Aligned with the CMS Behavioral Health Strategy, several proposals aim to improve behavioral health access. New coding and payment are proposed for safety planning interventions for patients in crisis, including those with suicidal ideation. An add-on G-code would be available with E/M or psychotherapy services for personally performed safety planning interventions. A monthly billing code is also proposed for post-discharge follow-up contacts after emergency department crisis encounters, bundling four calls per month.
To further support psychotherapy access, Medicare payment is proposed for digital mental health treatment devices used adjunctively with ongoing behavioral health care under a treatment plan. Three new HCPCS codes are proposed for these devices. Six new G-codes are also proposed for behavioral health specialists (Clinical Psychologists, Clinical Social Workers, Marriage and Family Therapists, and Mental Health Counselors) to mirror interprofessional consultation CPT codes, facilitating better integration of behavioral health into primary care and other settings. CMS is also seeking comment on IOP services under PFS in additional settings like Certified Community Behavioral Health Clinics (CCBHCs) and crisis stabilization services. These comprehensive behavioral health initiatives are essential for addressing the growing mental health needs of Medicare beneficiaries.
Opioid Treatment Program (OTP) Enhancements
CMS proposes several telecommunication flexibilities for opioid use disorder (OUD) treatment services within OTPs, contingent on SAMHSA and DEA requirements. Permanent flexibility for audio-only telecommunications for periodic assessments is proposed starting January 1, 2025. The OTP intake add-on code may also be furnished via audio-video communications for methadone initiation if an adequate patient evaluation is possible via telehealth. These flexibilities aim to improve access for populations facing OUD treatment barriers.
Payment increases for OTP intake activities are proposed to include social determinants of health risk assessments, reflecting the added effort to identify patients’ unmet social needs and the need for harm reduction and recovery support services. This aims to support OTPs in addressing crucial factors influencing treatment engagement and retention. Payment is also proposed for new opioid agonist and antagonist medications, including a new add-on code for nalmefene hydrochloride nasal spray (Opvee®) for opioid overdose and payment for injectable buprenorphine products (Brixadi®). Finally, CMS clarifies the billing requirement for OTPs to include an OUD diagnosis code on claims. These OTP-focused changes are crucial in combating the opioid crisis and improving access to effective treatment.
Hospital Inpatient or Observation (I/O) E/M Add-on for Infectious Diseases
Recognizing the complexity of infectious disease management, CMS proposes a new HCPCS add-on code for hospital inpatient or observation care for confirmed or suspected infectious diseases, performed by physicians with specialized infectious disease training. This add-on code would cover service elements such as disease transmission risk assessment and mitigation, public health investigation, analysis, and testing, and complex antimicrobial therapy counseling and treatment. This proposal aims to better recognize the resource intensity and specialized expertise required in managing complex infectious disease cases in hospital settings. The diagnosis included in the plan of care in these scenarios often dictates the intensity and complexity of required services.
Supervision Policy for Physical Therapists (PTs) and Occupational Therapists (OTs) in Private Practice
CMS proposes allowing general supervision of physical therapist assistants (PTAs) and occupational therapy assistants (OTAs) by PTs and OTs in private practice for all applicable therapy services. This regulatory change aims to provide PTPPs and OTPPs greater flexibility in meeting patient needs, particularly in rural and underserved areas, and aligns with supervision policies in institutional settings. This adjustment could improve access to therapy services and streamline practice operations.
Certification of Therapy Plans of Treatment with Physician or NPP Order
To reduce administrative burdens, CMS proposes amendments to certification and recertification regulations for therapy plans of treatment. An exception to the physician/NPP signature requirement for initial certification is proposed when a written order or referral is on file and the therapist provides documented evidence that the treatment plan was transmitted to the physician/NPP within 30 days of the initial evaluation. CMS also seeks comments on the timeframe for physician/NPP changes to therapist-established treatment plans and potential limits on the physician/NPP order validity period. These proposed changes aim to simplify administrative processes while maintaining appropriate oversight of therapy services.
Dental and Oral Health Services Expansion
CMS proposes to expand Medicare payment for dental services inextricably linked to covered medical services. New clinical scenarios for FFS Medicare payment would include: (1) dental or oral examinations prior to Medicare-covered dialysis for ESRD beneficiaries; and (2) medically necessary diagnostic and treatment services to eliminate oral or dental infections before or during dialysis for ESRD beneficiaries. These expansions recognize the critical link between oral health and overall health, particularly for vulnerable populations.
CMS also seeks comment on potential connections between dental services and covered services for diabetes, autoimmune diseases with immunosuppressive therapies, sickle cell disease, and hemophilia, requesting evidence on patient populations and specific medical services where dental services may improve outcomes. To improve claims processing, CMS proposes requiring the KX modifier on claims for dental services believed to be inextricably linked to covered medical services, starting in CY 2025. Submission of a diagnosis code on the 837D dental claims format would also be required starting January 1, 2025. CMS is also requesting information regarding services associated with oral appliances for obstructive sleep apnea treatment. These dental health initiatives recognize the broader scope of healthcare needs and the interconnectedness of oral and systemic health.
Drugs and Biological Products Paid Under Medicare Part B: Key Updates
Several updates are proposed for drugs and biological products under Medicare Part B. These include:
- Refunds for Discarded Amounts: Clarifications and policy adjustments related to refunds for discarded amounts of single-dose container or single-use package drugs, including exclusions for drugs paid under Part B for fewer than 18 months and skin substitutes. JW modifier requirements are proposed for billing suppliers discarding drugs during preparation but not administering them.
- Payment Limit Calculations with Negative or Zero ASP Data: Proposed approaches for calculating payment limits when manufacturers report negative or zero ASP data to CMS, varying based on drug source and marketing status.
- Payment for Radiopharmaceuticals in Physician Offices: Clarification that MACs should use methodologies in place on or before November 2003 for pricing radiopharmaceuticals in physician office settings, including invoice-based pricing.
- Immunosuppressive Therapy Coverage Expansion: Proposed modification to include certain compounded formulations of FDA-approved immunosuppressive drugs (oral or enteral) in the immunosuppressive drug benefit, along with payment for up to 90-day supplies and refills.
- Blood Clotting Factor Clarification: Proposed clarification that blood clotting factors must be self-administered to qualify for the clotting factor furnishing fee, ensuring appropriate payment for gene therapies for hemophilia administered in healthcare settings.
Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) Policy Adjustments
Several proposals aim to refine policies for RHCs and FQHCs, enhancing service delivery in these critical settings:
- Care Coordination Services Coding and Payment: Proposal for RHCs and FQHCs to report individual CPT and HCPCS codes for care coordination services instead of G0511, allowing billing of add-on codes and improving payment accuracy, paid at national non-facility PFS amounts in addition to AIR or PPS.
- Telecommunication Services Extension: Continued allowance for direct supervision via audio and video telehealth and extension of “immediate availability” definition through December 31, 2025. Temporary payment for non-behavioral health telehealth visits (using G2025) through December 31, 2025, including audio-only. Delay of in-person visit requirement for mental health telehealth services in homes until January 1, 2026.
- Intensive Outpatient Program (IOP) Payment Rate Adjustment: Proposal for a different payment rate for four or more IOP services per day in RHCs and FQHCs, aligning with hospital outpatient department rates.
- Preventive Vaccine Payment at Time of Service: Proposal for RHCs and FQHCs to bill and be paid for Part B preventive vaccines and administration at the time of service, at Part B preventive vaccine payment rates, reconciled annually with cost reports, starting July 1, 2025, improving payment timeliness.
- Dental Services Clarification: Confirmation that dental services inextricably linked to covered services in physician offices are also considered RHC and FQHC services, paid under AIR and PPS, aligning with KX modifier requirements.
- RHC Productivity Standards Removal: Proposal to remove outdated RHC productivity standards, deemed redundant with CAA 2021 provisions.
- FQHC Market Basket Rebasing and Revising: Proposal to rebase and revise the FQHC market basket to a 2022 base year, with a proposed 3.5% productivity-adjusted market basket update for CY 2025.
- RHC and FQHC Conditions for Coverage Updates: Proposed changes to explicitly require primary care service provision in RHCs and FQHCs, remove hemoglobin and hematocrit (H&H) from required direct laboratory services, and update laboratory test regulations to reflect modern techniques, increasing flexibility and reducing burden.
Clinical Laboratory Fee Schedule (CLFS) Updates
Proposed changes to the CLFS include conforming changes to regulations to reflect the delay in data reporting requirements for non-ADLT CDLTs and the extended phase-in of payment reductions under the CLFS, as mandated by the Further Continuing Appropriations and Other Extensions Act, 2024.
Ambulance Fee Schedule Reimbursement for Blood Transfusion
CMS proposes modifying the definition of advanced life support level two (ALS2) to include the administration of low titer O+ whole blood transfusion (WBT), recognizing the survival benefits of WBT for hemorrhagic shock patients. Comment is sought on adding alternative blood product treatments like packed red blood cells and plasma to ALS2 procedures, accommodating varying EMS practices.
Medicare Part B Payment for Preventive Services Expansion
Proposed expansions in Medicare Part B preventive services include:
- Hepatitis B Vaccine Coverage Expansion: Expanding coverage to include individuals who have not completed a hepatitis B vaccination series or whose vaccination history is unknown, removing physician order requirements, and streamlining payment for RHCs and FQHCs at 100% of reasonable cost.
- Fee Schedule for Drugs Covered as Additional Preventive Services (DCAPS): Proposing an ASP-based fee schedule for DCAPS drugs, including HIV PrEP drugs, with alternative payment mechanisms if ASP data is unavailable, and similar payment limits for supplying and administration fees, also applicable to RHCs and FQHCs at 100% of Medicare payment amount.
- Expand Colorectal Cancer Screening Coverage: Proposing to remove barium enema coverage, expand coverage to include CT Colonography, and expand the “Complete CRC Screening” approach to include positive blood-based biomarker or non-invasive stool-based tests as part of the screening continuum, with follow-on colonoscopies without beneficiary cost-sharing, promoting access to crucial cancer prevention.
Medicare Prescription Drug Inflation Rebate Program Codification
CMS proposes to codify policies from revised guidance for the Medicare Part B and Part D Drug Inflation Rebate Programs, including methods for removing 340B units from rebate calculations, reconciliation processes, and clarifying rebate calculations in specific circumstances like discarded drug refunds.
Electronic Prescribing for Controlled Substances (EPCS) Compliance Date Extension
The compliance date for including prescriptions written for LTC facility beneficiaries in the CMS EPCS Program compliance determination is proposed to be extended from January 1, 2025, to January 1, 2028, with non-compliance actions commencing on or after January 1, 2028. This aligns CMS EPCS Program compliance calculations with the required implementation date of NCPDP SCRIPT standard version 2023011, which improves pharmacy-LTC facility communication.
Conclusion
The CY 2025 PFS proposed rule represents a comprehensive set of policy updates designed to modernize Medicare, enhance healthcare access and quality, and promote equity within the healthcare system. From expanding telehealth and behavioral health services to refining payment models for primary and specialty care, these proposed changes have the potential to significantly impact how healthcare is delivered and reimbursed. Understanding which diagnosis would be included in the plan of care in this evolving landscape requires healthcare providers and stakeholders to carefully review these proposed rules and provide feedback to CMS during the public comment period. These changes aim to create a more responsive and effective healthcare system for Medicare beneficiaries, ensuring they receive the high-quality, accessible care they need.
