November 14, 2024
On November 1, the Centers for Medicare and Medicaid Services (CMS) released the final rule for the 2025 Medicare payment policies. Under the rule, physician payments will be cut next year unless Congress intervenes.
The 2025 Medicare conversion factor will decrease for the fifth straight year, this year being cut by approximately 2.83%, from $33.2875 to $32.3465. Similarly, the anesthesia conversion factor will be reduced from $20.7739 to $20.3178. These cuts are largely the result of the expiration of a 2.93% temporary update that Congress provided and a freeze in annual updates pursuant to the 2015 MACRA legislation that projected all physicians would be in Alternative Payment Models by now. Unfortunately, these cuts coincide with ongoing growth in the cost to practice medicine as CMS projects the increase in the Medicare Economic Index (MEI) for 2025 will be 3.5%.
Physician practices cannot continue to absorb increasing costs while their payment rates decline. Both the Medicare Payment Advisory Commission and the Medicare Trustees have issued warnings about access to care problems if the gap continues to grow between what Medicare pays physicians and what it costs to provide high-quality care.
This is why the California Medical Association (CMA), American Medical Association (AMA) and others in organized medicine are strongly supporting the bipartisan Medicare Patient Access and Practice Stabilization Act of 2024 (HR 10073), which would stop the cut, increase physician payment by one-half of the MEI, and result in a 12-month payment update of 4.73%.
CMA continues to urge physicians to contact their congressional representatives and urge them to cosponsor HR 10073.
Other Key 2025 Medicare Physician Payment Rule Updates
Quality Payment Program: In response to concerns from AMA and CMA about the cost performance category negatively impacting physicians’ final scores, CMS made major modifications to reduce the penalties and the negative impact on physicians.
MIPS: CMS is freezing the Medicare Merit-based Incentive Payment System (MIPS) performance thresholds to allow physicians to fully recover from the pandemic and the Change Healthcare cyberattack.
Practice Expenses: CMS is delaying the MEI reweighting proposal until AMA’s Physician Practice Expense Survey is complete. CMA opposed the original proposal as it would have reduced California physician rent practice expense payments by millions each year.
Telehealth: While CMS does not have the authority to extend the pandemic telehealth waivers beyond December 2024, Congress is likely to extend it for two years. However, CMS is also authorizing audio only telehealth services and allowing virtual direct physician supervision of certain services.
Office/Outpatient Evaluation & Management Visits: CMS is reversing its policy and finalized the proposal to allow payment of the O/O E/M visit complexity add-on code, HCPCS code G2211, when the O/O E/M base code — CPT codes 99202-99205, 99211-99215 — is reported by the same practitioner on the same day as an annual wellness visit, vaccine administration, or any Medicare Part B preventive service.
Accountable Care Organizations (ACOs): ACOs with a history of earning shared savings bill be given prepaid shared savings for staffing, health care infrastructure and direct beneficiary services. CMA has been urging CMS to provide upfront “infrastructure” funding to ACOs.
ACOs will also be given health equity payment adjustments based on the proportion of assigned beneficiaries who are dually eligible for Medicare and Medicaid. This will help California physicians who serve a disproportionate number of Medicare-Medicaid patients.
For more details about the 2025 Medicare payment policies, see the 2025 Medicare Physician Payment Schedule and Quality Payment Program Final Rule Summary.
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