January 10, 2025

A Look Inside the 2025 Medicare Physician Payment Schedule

With Congress failing to stop the proposed cut to physicians' Medicare payments in its end-of-year health care package, the 2.83% cut contained in the Centers for Medicare and Medicaid Services' 2025 Medicare physician payment schedule is now in effect, making this the fifth straight year of cuts to physician payments.

According to a late December update from the American Medical Association, CMS has heard the advocacy from the house of medicine on the issue of tying payments to the Medicare Economic Index when calculating payment changes. The agency further acknowledged that the costs of care delivery for physicians will increase by 3.5% this year, per the MEI. CMS has said it will continue its delay in MEI reindexing until it analyzes the results from the AMA's fall 2024 practice information survey, as requested by the AMA.

The WSMA will continue to work with the AMA on supporting the broad reforms contained within the bipartisan Strengthening Medicare for Patients and Providers Act, which includes providing inflationary updates. We will keep members apprised of how they can best support these reforms in the weeks and months ahead.

Bright spots in the Medicare final rule

In some good news among the headline disappointments of the Medicare final rule:

• CMS will now permanently allow billing for telehealth services delivered via telephone or other audio-only devices in circumstances where the patient is not capable or does not consent to the use of audio-visual technology for the diagnosis, evaluation, or treatment of mental health or substance use disorders, and for assessments of end-stage renal disease.
• CMS also extended for one year:
  • Suspension of frequency limits on subsequent hospital and nursing facility telehealth visits.
  • The ability of teaching physicians to provide virtual direct supervision and virtual supervision of residents when the resident provides telehealth services.
  • Physicians providing telehealth from their homes do not have to report their home address to Medicare.

Regarding the Merit-based Incentive Payment System, the Medicare final rule follows the suggestion from the AMA to keep thresholds for incurring a financial penalty unchanged due to the pandemic, meaning the same threshold will be maintained through calendar year 2025, which affects MIPS payments in 2027.

The final rule also addresses the G2211 code, which reimburses for office/outpatient visits with patients with complex health needs to encourage longitudinal care. Per the final rule, CMS is finalizing payment starting Jan. 1, 2025, for HCPCS code G2211 when the same practitioner reports the O/O E/M base code on the same day as an annual wellness visit, vaccine administration, or any Part B preventive service. For more on the G code, see this article in this week's Membership Memo.

For more on the final rule, see this update from the AMA and download a PDF of the AMA summary.