The Centers for Medicare & Medicaid Services (CMS) has released the calendar year (CY) 2025 Revisions to Payment Policies under the Physician Fee Schedule (MPFS) and Other Revisions to Medicare Part B Final Rule, which includes proposals related to Medicare physician payments and the Quality Payment Program (QPP). Under the Final Rule, average payment rates under the PFS will be reduced by 2.93% in CY 2025 compared to the average for most of CY 2024. This change incorporates the expiration of the temporary 2.93% payment increase for CY 2024 required by statute, and an estimated 0.05% adjustment upward necessary to account for changes in work RVUs for some services. This change results in an estimated PFS conversion factor of $32.35, down $0.94 from the CY 2024 conversion factor.
More on Final Rule
CMS finalized several policy changes that impact coding and payment for the virtual elements of care delivery. Notably, CMS continues to maintain its lack of statutory authority to extend COVID-19 telehealth waivers set to expire at the end of this calendar year. Without legislative action, some major Medicare telehealth waivers will expire on Dec. 31, 2024. However, certain telehealth flexibilities do not require congressional action to be extended.
Virtual Care
These flexibilities include virtual components of direct supervision and changes to the definition of “interactive telecommunication.” CMS finalized several “temporary” codes on the Medicare telehealth list for at least another year, though CMS noted it will conduct a comprehensive analysis of all these codes to decide which should be made permanent and which should eventually be removed from the Medicare telehealth list. Notably, CMS reversed course on several requests to add codes to the lists. CMS also finalized its proposal not to reimburse the 16 new audio-visual and audio-only telemedicine E/M codes created by the Current Procedural Terminology (CPT) Editorial Panel.
CMS also finalized expanding the definition of “Telecommunications System” to include audio-only services. Additionally, CMS expressed that upon review of comments and their analysis, CMS does not believe it would be appropriate at this time to permit two-way, real-time audio-only communication technology for telehealth services furnished at originating sites other than the patient’s home.
Direct/Virtual Supervision
Furthermore, CMS finalized as proposed to continue defining direct supervision to allow real-time audio and visual interactive telecommunications for direct supervision through Dec. 31, 2025. CMS noted that an abrupt transition to pre-public health emergency policies may pose a barrier to access, such as incident-to services. Additionally, CMS finalized permanent expansion of the definition of direct supervision to include audio-video for a subset for services. The services that will fall under this expanded definition, after Dec. 31, 2025, include “incident-to services described under § 410.26: (1) services furnished incident to a physician or other practitioner’s service when provided by auxiliary personnel employed by the billing practitioner and working under their direct supervision, and for which the underlying HCPCS code has been assigned a specific PC/TC indicator and (2) services described by CPT code 99211 (Office or other outpatient visit for the evaluation and management of an established patient that may not require the presence of a physician or other qualified health care professional). As provided in the code descriptor for CPT code 99211, an office or other outpatient visit for the evaluation and management of an established patient may not require the presence of a physician or other practitioner and may be furnished incident to a physicians’ service by a nonphysician employee of the physician under direct supervision.”
Medicare Parts A and B Overpayments
The Final Rule’s overpayment provisions are a significant change to the existing regulations, which date back to 2016 for the Parts A/B rules and 2014 for the Parts C/D Rule. Most importantly, the Final Rule adopts that part of the 2022 Proposed Rule that drops the standard of “reasonable diligence” as to when a person has identified an overpayment. The Final Rule adopts a revised standard that tracks and cites to the Federal False Claims Act for a person that “knowingly receives or retains an overpayment.” This revised standard covers situations where the person (as defined) has actual knowledge of the existence of the overpayment or acts in reckless disregard of or deliberate ignorance of the overpayment. The statute itself does not define what it means to “identify” an overpayment, likely suggesting a future opportunity for a Loper Bright challenge to the new regulation.
The Final Rule also adopts the provision in the Proposed 2025 Physician Fee Schedule which added a provision to the 2022 proposed revisions formalizing the six-month period for good faith investigation of an overpayment by temporarily suspending the 60-day overpayment refund deadline. This provision had previously only appeared in the preamble to the 2016 rules without mention in the 2022 Revisions.
While the themes are the same, the details of and expectations of the 60-day Refund Rule vary in some ways because of the differing payment methodologies for traditional Medicare and managed care (Parts C and D). The Parts C and D regulations by their terms only apply to the MA organization and the Part D sponsor. Another significant difference is that the 180-day period for investigation is not included in the Part C/D regulations. Among other points explaining this difference, CMS notes that with respect to risk adjustment data for Part C and prescription drug event data for Part D, there are alternative administrative means for correction that may be pursued outside of the 60-day time frame.
Advanced Primary Care Management Services
The Final Rule also establishes coding and payment under the PFS for a new set of advanced primary care management services (APCM) described by new HCPCS codes G0556, G0557, and G0558. Unlike existing care management codes, there are no time-based thresholds included in the service elements, which is intended to reduce the administrative burden associated with current coding and billing. Instead, the new APCM codes are stratified into three levels based on an individual’s number of chronic conditions and status as a Qualified Medicare Beneficiary, reflecting the patient’s medical and social complexity: (i) Level 1 (G0556) is for persons with one chronic condition; (ii) Level 2 (G0557) is for persons with two or more chronic conditions; and (iii) Level 3 (G0558) is for persons with two or more chronic conditions and status as a Qualified Medicare Beneficiary.
Drugs and Biological Products Paid Under Medicare Part B
Section 90004 of the Infrastructure Investment and Jobs Act established a refund for discarded amounts of certain single-dose container or single-use package drugs under Part B. The Final Rule includes clarifications to several policies implemented in the CY 2023 and CY 2024 PFS final rules, including: (1) exclusions of drugs, for which payment has been made under Part B for fewer than 18 months from the definition of refundable single-dose container or single-use package drug; and (2) identifying single-dose containers. The Final Rule also requires the use of the JW modifier if a billing supplier is not administering a drug, but there are amounts discarded during the preparation process before supplying the drug to the patient. The Final Rule also clarifies that skin substitutes will not be included in the identification of refundable drugs for the calendar quarters in 2025.
When calculating payment limits when manufacturers report negative or zero average sale price (ASP) data to CMS, the Final Rule clarifies that such data will be considered “not available” for purposes of calculating a payment limit. Altogether, CMS is finalizing its policies for calculating the payment limit when a manufacturer reports negative or zero ASP data for a drug, with a modification relating to biosimilars, such that the finalized payment limit calculation will use the biosimilar’s own, most recently available, positive manufacturer’s ASP data.
For clarity on which methodologies are available to Medicare Administrative Contractors (MACs) for pricing of radiopharmaceuticals in the physician office setting, the Final Rule establishes that for radiopharmaceuticals furnished in a setting other than a hospital outpatient department, MACs shall determine payment limits for radiopharmaceuticals based on any methodology used to determine payment limits for radiopharmaceuticals in place on or prior to November 2003. Such methodology may include, but is not limited to, the use of invoice-based pricing.
The Final Rule includes revisions to regulations to include certain compounded formulations of FDA-approved drugs that have approved immunosuppressive indications in the immunosuppressive drug benefit, or for use in conjunction with immunosuppressive drugs, or that have been determined by a MAC to be reasonable and necessary to prevent or treat rejection of a transplanted organ or tissue. In addition, the Final Rule makes two changes regarding supplies of immunosuppressive drugs to align with current standards of practice and reduce barriers to medication adherence: (1) to allow payment of a supplying fee for a prescription of a supply of up to 90 days; and (2) to allow payment for refills of prescriptions for these immunosuppressive drugs.
Finally, CMS has updated regulatory text to clarify existing CMS policy that, for purposes of determining whether a treatment is eligible for the blood clotting factor furnishing fee, blood clotting factors must be self-administered and must not be therapies that enable the body to produce clotting factors and do not directly integrate into coagulation cascade in order to be considered clotting factors for which the furnishing fee applies.
Medicare Shared Savings Program
CMS finalized a new prepaid shared savings option for qualifying Accountable Care Organizations (ACOs) that include those participating in Levels C-E of the BASIC track or the ENHANCED track with consistent demonstration of shared savings. At least 50 percent of the earned shared savings will be required to be spent on direct beneficiary services that have a reasonable expectation of improving or maintaining the health or overall functioning of the beneficiary. Additionally, up to 50 percent can be spent on staffing and infrastructure costs. Applications would be accepted during the annual application cycle, with expectations of a Jan. 1, 2026, start date. Notably, CMS made a slight revision in the final rule to the definition of direct beneficiary services to include in-kind items or services provided to an ACO beneficiary that are not otherwise covered by Traditional Medicare but are evidence-based and medically appropriate for the beneficiary based on clinical and social risk factors
The APP Plus quality measure set is finalized with modification to timeline for incorporation. Beginning in performance year 2025, CMS will require MSSP ACOs to report on this measure set. The APP quality measure set will neglect to be an available reporting option. Over an extended timeline, the measure set will grow to include 11 measures, including five newly proposed measures and 6 previously utilized measures. MIPS CQMs would not be an available measure type. CMS expressed their intent to use Medicare CQMs as a transition step to adopt digital quality measurement. The MSSP eCQM incentive will be extended for an unspecified number of years and would only apply to APP Plus participants that report all eCQMs in the newly-proposed measure set and meet all data completeness requirements for those eCQMs. As a result of these modifications, there will be a total of six measures in the APP Plus quality measure set for the CY 2025 performance period/2027 MIPS payment year.
CMS finalized the definition of “primary care services under MSSP,” with one modification, aimed to better capture services provided by primary care providers. Additions to the definition include Safety Planning Interventions, Post-Discharge Telephonic Follow-up, Virtual Check-in, Advanced Primary Care Management Services, Cardiovascular Risk Assessment and Management, Interprofessional Consultation, Direct Caregiver Training and Individual Behavior Management Caregiver Training.
Quality Payment Program
CMS finalized several updates aimed to drive improvement in clinicians’ performance and healthcare quality through payment policy. CMS received several comments noting the administrative burden that remains in the reporting of MVPs. Regardless, CMS reasserted plans to make MVPs mandatory. The timeline regarding this will be set in future rulemaking.
Six new MVPs were finalized for ophthalmology, dermatology, gastroenterology, urology, pulmonology and surgical care, bringing the total number of available MVPs to 21. CMS estimates 80 percent of specialties will have applicable MVPs available. Non-MIPS eligible practitioners would not need to report the MVP to furnish and bill for APCM services. CMS is also implementing MVPs and subgroup reporting to allow clinicians to report measures that directly reflect their clinical practice. Although traditional MIPS remains an option, CMS plans to fully adopt MVPs and eventually sunset traditional MIPS in the future.
Dental Services
CMS finalized its proposal to codify certain policies to permit payment for certain dental services that are inextricably linked to other covered services (certain dental services for patients receiving dialysis services to treat ESRD).
CMS finalized addition of an additional clinical scenario to the examples of clinical scenarios under which payment can be made for certain dental services under Section 411.15(i)(3)(i)(A). Specifically, CMS finalized amending the regulation at paragraph A to include: “dental or oral examination performed as part of a comprehensive workup in either the inpatient or outpatient setting prior to Medicare-covered dialysis services when used in the treatment of ESRD; and medically necessary diagnostic and treatment services to eliminate an oral or dental infection prior to, or contemporaneously with Medicare-covered dialysis services when used in the treatment of ESRD.”
CMS noted it will address comments in response to the request for feedback on furnishing oral devices used to treat obstructive sleep apnea, including CPAP devices in future rulemaking.
Opioid Treatment Programs (OTPs)
The rule includes several telecommunication technology flexibilities for opioid use disorder (OUD) treatment services furnished by OTPs. First, the current flexibility for providing periodic assessments via audio-only telecommunications is being made permanent. Second, CMS is allowing the OTP intake add-on code to be furnished via two-way audio-video technology when billed for the initiation of treatment with methadone.
CMS is also finalizing payment increases for social determinants of health (SDOH) risk assessments as part of activities within OUD treatment services furnished by OTPs if medically necessary to adequately reflect additional effort for OTPs, identify a patient’s unmet health-related social needs (HRSNs) or the need and interest for harm reduction interventions and recovery support services critical to treatment of OUD. The Final Rule also updates payments for periodic assessments, which includes payments for SDOH risk assessments that OTPs may conduct throughout treatment, to monitor potential changes in a patient’s HRSNs, or support services. The Final Rule includes new add-on codes to account for coordinated care and referral services, patient navigational services, and peer recovery support services provided in OTP settings.
CMS has also finalized payments for new opioid agonist and antagonist medications approved by the FDA, including nalmefene hydrochloride nasal spray and a new injectable buprenorphine product. Finally, the Final Rule clarifies that OTPs must append an OUD diagnosis code on claims for OUD treatment services.