Late in 2024, the Centers for Medicare & Medicaid Services (CMS) issued the 2025 Physician Fee Schedule (PFS) final rule adopting changes for Medicare payments under the PFS. CMS also released the 2025 Hospital Outpatient Prospective Payment System final rule, which sets hospital outpatient reimbursement rates for the calendar year.
Physician Fee Schedule
Conversion Factor: The final conversion factor (CF) for physician services will be reduced by 2.83% in 2025. The change to the PFS conversion factor reflects the 0% overall update required by statute, the expiration of the temporary 2.93% increase in payment for 2024 required by statute, and an estimated 0.02% adjustment to account for changes in work relative value units (RVUs) for some services. This amounts to an estimated 2025 PFS conversion factor of $32.3465, a decrease of $0.94 (or 2.83%) from the 2024 conversion factor of $33.2874.
This reimbursement cut coincides with an ongoing increase in the cost of practicing medicine. CMS projects that the Medicare Economic Index (MEI) will increase 3.5% for 2025, which is why the Association for Clinical Oncology (ASCO) is asking Congress to pass the Medicare Patient Access and Practice Stabilization Act (H.R. 10073). The legislation would stop the 2.83% cut to physician reimbursement in the 2025 PFS and provide an inflationary update equal to 50% of the MEI. ASCO members are encouraged to contact their lawmakers and urge them to pass this legislation though the ASCO ACT Network.
Specialty Impact: ASCO estimates a 4% decrease for medical oncology in 2025. This includes the 2.8% decrease from the conversion factor, a 0.67% decrease in total RVUs, and a 0.59% decrease due to the expiration of the Physician Work Geographic Practice Cost Index (GPCI). ASCO also estimates a 3.25% decrease for radiation oncology and a 3.60% decrease for gynecologic oncology. The actual impact on individual clinicians will vary based on geographic location and the mix of billed Medicare services.
•Telehealth: During the COVID-19 public health emergency and through the end of 2024, CMS had the authority to expand access to telehealth services for all Medicare beneficiaries. A temporary extension, waiving the geographic and site restrictions on telehealth reimbursement, was scheduled to expire at the end of 2024. Without Congressional action, starting January 1, 2025, patients with Medicare now need to be in a rural area and at a medical facility to receive nonbehavioral health services via telehealth.
However, the final rule preserves some important, but limited, flexibilities through the end of 2025 that help maintain patient access to telehealth services. Interactive telecommunications systems may include audio-only communication technology for any Medicare telehealth service furnished to beneficiaries in their home, if the distant site physician or practitioner is technically capable of using a system with audio and video technology, but the patients are not willing or able to use video technology. CMS will also continue to permit distant site practitioners to use their currently enrolled practice locations instead of their home addresses when providing telehealth services from their home. Urge lawmakers to support permanent extension of Medicare telehealth flexibilities.
Colorectal Cancer Screening: CMS is finalizing an update and expansion of coverage for colorectal cancer (CRC) screening. Coverage will now include computed tomography colonography (CTC) as well as blood-based biomarker CRC screening tests as part of the continuum of screening. Like stool-based CRC screening tests, which are already in the definition of a “complete CRC screening,” a blood-based biomarker test with a positive result will lead to a follow-on screening colonoscopy (with no beneficiary cost-sharing).
CMS will no longer cover barium enema as a method of screening because this service is rarely used in Medicare and is no longer recommended as an evidence-based screening method.
Evaluation and Management: For 2025, CMS is finalizing payment of the office/outpatient evaluation and management visit complexity add-on code, Healthcare Common Procedure Coding System (HCPCS) code G2211. The add-on code is to be used when the office/outpatient evaluation and management base codes 99202-99205 or 99211-99215 are reported by the same practitioner on the same day as an annual wellness visit, vaccine administration, or any Medicare Part B preventive service (including the initial preventive physical examination) furnished in the office or outpatient setting.
Quality Payment Program
Merit-Based Incentive Payment System (MIPS) Performance Threshold: CMS is maintaining the MIPS performance threshold for 2025 at 75 points for all three MIPS reporting options: traditional MIPS, MIPS Value Pathways (MVPs), and Alternative Payment Model Performance Pathways (APPs). Clinicians must reach a score of more than 75 to avoid a reimbursement penalty of up to 9%. CMS is also maintaining the quality data completeness criteria at 75 through the 2028 performance period.
MVP Development and Maintenance: CMS finalized six new MVPs that will be available beginning with the 2025 performance period for ophthalmology, dermatology, gastroenterology, pulmonology, urology, and surgical care. CMS also finalized the following updates to the Advancing Cancer Care MVP: added seven quality measures; added two improvement activities; removed three improvement activities; and added one cost measure.
Hospital Outpatient Prospective Payment System (OPPS)
Updates to OPPS and ASC Payment Rates: For 2025, CMS is increasing payment rates under OPPS and Ambulatory Surgical Center (ASC) Payment Systems by 2.9%. This increase is based on a hospital market basket percentage increase of 3.4% reduced by a productivity adjustment of 0.5%. In continuation of an existing policy, hospitals and ASCs that fail to meet their respective quality reporting program requirements are subject to a 2.0% reduction in the conversion factor for 2025.
Prior Authorization: CMS is shortening the prior authorization review timeframes for hospital outpatient departments from 10 business days to 7 calendar days for standard reviews. Although Medicare fee for service is not an impacted payer under the CMS interoperability and prior authorization final rule, CMS finalized this change to align the fee for service prior authorization review timeframe for standard reviews with the timeframes in that rule. CMS is not making any changes to the expedited prior authorization review timeframe in fee for service, which is currently 2 business days (instead of the 72 hours in the interoperability and prior authorization rule); however, the agency indicates it may do so in future rulemaking.
© American Society of Clinical Oncology. ASCO in Action. November 1, 2024. All rights reserved.
