HHS Finalizes Physician Payment Rule Strengthening Person-Centered Care and Health Quality Measures
Today, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), announced it is finalizing new policies in the calendar year (CY) 2025 Medicare Physician Fee Schedule (PFS) final rule to strengthen primary care, expand access to preventive services, and further access to whole-person care for services such as behavioral health, oral health, and caregiver training. The final rule reflects the Biden-Harris Administration’s commitment to protecting and expanding Americans’ access to quality and affordable health care.
“The Medicare physician payment final rule continues our work to strengthen primary care while also supporting preventive care and promoting better access to behavioral health care. In addition, the final rule codifies and builds on guidance to continue our ability to use rebates from drug manufacturers to strengthen Medicare”, said HHS Secretary Xavier Becerra. “This is made possible by the Biden-Harris Administration’s historic prescription drug law, the Inflation Reduction Act. This rule ensures that everyone can get health care, regardless of the color of their skin, what language they speak, or where they were born. And, it encourages more participation in the Medicare Shared Savings Program by accountable care organizations serving people in rural and underserved communities – to the benefit of millions.”
“CMS remains committed to delivering affordable, high-quality care to all Americans while continually driving innovation to help better meet the individual needs of every person with Medicare,” said CMS Administrator Chiquita Brooks-LaSure. “This final Medicare physician payment rule increases access to preventive health services, improving health care providers’ ability to identify health problems early, when they are easier to treat, and takes additional steps to support caregivers.”
In accordance with update factors specified in law, finalized average payment rates under the PFS will be reduced by 2.93% in CY 2025 compared to the average payment rates for most of CY 2024. The change to the PFS conversion factor reflects the 0% update required by statute for CY 2025, the expiration of the 2.93% temporary increase in payment amounts for CY 2024 required by statute, and a small budget neutrality adjustment necessary to account for changes in valuation for particular services. This amounts to a finalized CY 2025 PFS conversion factor of $32.35, a decrease of $0.94 (or 2.83%) from the current CY 2024 conversion factor of $33.29.
Advancing High-Quality Primary and Accountable Care
Over the last few years, CMS has taken action to support person-centered approaches to health care, which starts with strengthening primary care as a foundation of our health care system. Building on previously finalized policies that recognize the importance, time, and effort required for a primary care team to develop long-lasting relationships with patients, CMS is finalizing new coding and payment policies for advanced primary care management services that advanced primary care teams may provide, such as 24/7 access to care and care plan development. The codes for these services are stratified based on patient medical and social complexity. Overall, these policies incorporate lessons learned over the last decade of Innovation Center value-based primary care models, and as such, these finalized codes also represent the beginnings of a new permanent pathway towards accountable care in the PFS.
“Whole-person care means moving towards a health care system that recognizes the impact of each unique aspect of a person on their wellbeing. From physical, behavioral, and oral health to social determinants of health and caregiving supports, whole-person care necessitates looking at how all of these aspects together impact someone’s care journey. It all starts with a foundation of primary care that can integrate these components together,” said Meena Seshamani, M.D. Ph.D., Deputy CMS Administrator and Director of CMS’ Center for Medicare. “With this final rule, we are also taking lessons learned from numerous CMS Innovation Center models to strengthen primary care teams and accountable care organizations, allowing them to better meet the unique needs of every person with Medicare.”
Additionally, evaluation results from the Innovation Center’s Million Hearts® model demonstrated that payment for cardiovascular risk assessment and cardiovascular care management led to fewer deaths related to cardiovascular disease and significant reductions in heart attacks and strokes. Informed by these results, CMS is finalizing new payment and coding policies for these services to better assess and manage heart health.
CMS is continuing steps to further strengthen the Medicare Shared Savings Program (Shared Savings Program), which is Medicare’s permanent Accountable Care Organization (ACO) program. For the first time, CMS will allow eligible ACOs with a history of success in the program to receive an advance on their earned shared savings. This will encourage ACO investment in staffing, health care infrastructure, and certain additional services for people with Medicare, such as dental, vision, hearing, healthy meals, and transportation. CMS is also adopting a health equity benchmark adjustment to further incentivize participation in the Shared Savings Program by ACOs that serve people with Medicare and Medicaid from rural and underserved communities.
Further, CMS is finalizing a methodology for adjustments to account for the impact of improper payments when reopening an ACO’s shared savings and shared losses calculations, and to mitigate the impact of significant, anomalous, and highly suspect (SAHS) billing activity in CY 2024 or subsequent calendar years on annual ACO financial reconciliation. This action complements the Medicare Shared Savings Program SAHS Billing Activity Final Rule issued on September 24, 2024, and will improve the accuracy, fairness, and integrity of Shared Savings Program financial calculations, while also recognizing ACOs as a partner in the identification of anomalous and highly suspect billing and improper payments.
Finally, the CMS Quality Payment Program’s Merit-based Incentive Payment System (MIPS) is a program that rewards Medicare practitioners for improving the quality of patient care and outcomes. In its commitment to continue increasing high-quality care for individuals with Medicare, CMS is finalizing the addition of six new MIPS Value Pathways that address: ophthalmology, dermatology, gastroenterology, pulmonology, urology, and surgical care.
Increasing Access to Behavioral Health, Oral Health, and Caregiver Training Services
CMS is finalizing several impactful additions in this year’s final rule to increase access to services that better meet the needs of the whole person, building on policies established in previous years.
To improve access to behavioral health, CMS is, for the first time, finalizing new coding and payment for U.S. Food & Drug Administration (FDA)-cleared digital mental health treatment devices, safety planning interventions that can help prevent suicides and overdoses, and services to better integrate behavioral health with primary care. This final rule is also improving access to crucial services in Opioid Treatment Programs, such as social determinants of health assessments, coordinated care and referral services, patient navigational services, and peer recovery support services.
In this year’s rule, CMS is finalizing that payment can be made for certain dental services associated with dialysis services for the treatment of end-stage renal disease, building on the clinical scenarios identified in previous years, including for persons undergoing chemotherapy, head and neck cancer treatment, and transplantation. CMS is also finalizing new payment for caregiver training services related to direct care services and supports, as well as new policies that will allow caregiver training services to be provided virtually, further supporting caregivers consistent with the Biden Administration Executive Order on Caregiving.
Removing Barriers to Covered Preventive Services: Hepatitis B Vaccinations, Colorectal Cancer Screening, and Pre-Exposure Prophylaxis (PrEP) to Prevent Human Immunodeficiency Virus (HIV)
Preventive health care is key to detecting health problems early, preventing certain diseases, and living longer, healthier lives. CMS is finalizing a coverage expansion of the hepatitis B vaccine for people with Medicare who have not received the hepatitis B vaccine or whose vaccination status is unknown, at no cost to the individual. This policy enables people with Medicare to get the hepatitis B vaccine from pharmacies and also allows pharmacies and mass immunizers to roster bill Medicare consistent with current billing for flu, pneumococcal, and COVID-19 vaccines.
CMS is also updating and expanding coverage of colorectal cancer screening to promote access and remove barriers for much needed cancer prevention and early detection, especially within rural communities and communities of color. Finally, CMS finalized payment under Part B as an additional preventive service for Pre-Exposure Prophylaxis (PrEP) to Prevent Human Immunodeficiency Virus (HIV), following the National Coverage Determination released in September. More information can be found at https://www.cms.gov/medicare/coverage/prep.
Preserving Telehealth Flexibilities
Under current law, the temporary extension of flexibilities related to payment for many telehealth services is scheduled to expire at the end of 2024. This final rule reflects CMS’ goal to preserve some important, but limited, flexibilities in our authority, and expand the scope of and access to telehealth services where appropriate. Through today’s final rule, CMS is continuing to permit certain practitioners to provide direct supervision via a virtual presence of auxiliary personnel, when required, virtually through immediate availability via real-time, audio-video technology. CMS is also finalizing temporary extensions to allow teaching physicians to be present virtually when they furnish telehealth services involving residents in teaching settings.
Absent Congressional action, beginning January 1, 2025, the statutory limitations that were in place for Medicare telehealth services prior to the COVID-19 PHE will retake effect for most telehealth services. These include geographic and location restrictions on where the services are provided, and limitations on the scope of practitioners who can provide Medicare telehealth services. After that date, people with Medicare generally will need to be located in a medical facility in a rural area to receive most Medicare telehealth services, with a notable exception for behavioral health telehealth services which can continue to be provided in the patient’s home.
Implementation of the Inflation Reduction Act
The Inflation Reduction Act, the Biden-Harris Administration’s prescription drug law, discourages runaway price increases by drug companies by requiring them to pay rebates to Medicare when they increase prices faster than the rate of inflation for certain drugs covered under Part B and Part D. In this year’s final rule, CMS is codifying and building on established guidance to continue implementation of the inflation rebates and the next phase of implementation.
For a fact sheet on the CY 2025 Physician Fee Schedule final rule, please visit: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2025-medicare-physician-fee-schedule-final-rule
For a fact sheet on final changes to the CY 2025 Quality Payment Program, please visit: https://qpp-cm-prod-content.s3.amazonaws.com/uploads/3057/2025-QPP-Policies-Final-Rule-Fact-Sheet.pdf
For a fact sheet on final changes to the Medicare Shared Savings Program in the CY 2025 PFS final rule, please visit: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2025-medicare-physician-fee-schedule-final-rule-cms-1807-f-medicare-shared-savings
For a fact sheet on the final changes to the Medicare Prescription Drug Inflation Rebate Program changes in the CY 2025 PFS final rule, please visit: https://www.cms.gov/inflation-reduction-act-and-medicare/inflation-rebates-medicare
To view the CY 2025 Physician Fee Schedule final rule, please visit: https://www.federalregister.gov/public-inspection/2024-25382/medicare-and-medicaid-programs-calendar-year-2025-payment-policies-under-the-physician-fee-schedule