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CMS Proposes 2.8% Cut to Medicare Physician Fees for 2025

— One group calls proposal "critically short-sighted"

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CMS on Wednesday in Medicare physician fees for the 2025 calendar year, and physician groups are none too happy about it.

"A 2.8% reduction to the conversion factor would be alarming in the best circumstances, but to propose doing so at a time when 92% of medical groups increased operating costs and are otherwise struggling to remain financially viable is critically short-sighted," Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association, . (Disclosure: Gilberg is a member of the MedPage Today editorial board.) "Medicare physician reimbursement is on a dire trajectory and these ongoing cuts continue to undermine the ability of medical practices to keep their doors open and function effectively -- the need for comprehensive reform is paramount."

"Physicians are currently grappling with rising overhead costs, workforce shortages, and increasing administrative burdens," Deborah Dyett Desir, MD, president of the American College of Rheumatology (ACR), . "Meanwhile, Medicare physician payments have , a trend not seen in other healthcare sectors where payments are adjusted annually for inflation ... The ACR had hoped that CMS would propose Medicare reimbursement levels that more accurately reflect the cost of providing care."

Not surprisingly, CMS had a different take. "The Biden-Harris administration is committed to protecting and expanding Americans' access to quality, affordable health care," CMS Administrator Chiquita Brooks-LaSure . "The Calendar Year 2025 Physician Fee Schedule [PFS] proposed rule supports physicians and other practitioners in delivering care that meets the needs of people with Medicare, including through telehealth flexibilities, strengthened primary, behavioral, and oral health care, and improved access to caregiver training services."

As the agency explained it, "Because of factors specified in law, average payment rates under the PFS are proposed to be reduced by 2.93% in CY [calendar year] 2025 compared to the average amount these services will be paid for most of CY 2024. The change to the PFS conversion factor incorporates the zero percent overall update required by statute, the expiration of the 2.93% increase in payment for CY 2024 required by statute, and a small adjustment necessary to account for changes in valuation for the work RVU [relative value unit] portion of particular services."

Taken together, "[t]his amounts to a proposed estimated CY 2025 PFS conversion factor of $32.36, a decrease of $0.93 (or 2.80%) from the current CY 2024 conversion factor of $33.29," CMS said.

The agency did have some good news for physicians, however. For instance, CMS that it proposes to let doctors bill for a "complexity add-on code" "when the O/O E/M [office/outpatient evaluation and management] base code is reported by the same practitioner on the same day as an annual wellness visit, vaccine administration, or any Medicare Part B preventive service furnished in the office or outpatient setting."

In addition, CMS wants to provisionally add several more telehealth services to its list of covered benefits, including "demonstration prior to initiation of home international normalized ratio (INR) monitoring and caregiver training services." And starting on Jan. 1, 2025, CMS would pay for "two-way, real-time audio-only communication technology" -- i.e., phone calls -- if the patient can't or doesn't want to use video technology. The agency said it will also continue letting providers officially use their practice location instead of their home address when providing telehealth services from home.

Based on the -- which the CMS Innovation Center tested as a way to lower heart attacks and strokes among fee-for-service beneficiaries -- CMS is proposing coding and payment for atherosclerotic cardiovascular disease (ASCVD) risk assessment and management. "The ASCVD risk assessment would be performed in conjunction with an E/M visit when a practitioner identifies a patient at risk for CVD who does not have a diagnosis of CVD," the agency said.

"The standardized, evidence-based risk assessment tool used would include demographic data (e.g., age, sex), modifiable risk factors for CVD (e.g., blood pressure and cholesterol control, smoking status/history, alcohol and other drug use, physical activity and nutrition, obesity), possible risk enhancers (e.g., pre-eclampsia), and laboratory data (lipid panel), and the output must include a 10-year estimate of the patient's ASCVD risk," the fact sheet said. "We are also proposing coding and payment for ASCVD risk management services that include service elements related to the ABCS of CVD risk reduction (aspirin, blood pressure management, cholesterol management, smoking cessation), for beneficiaries at medium or high risk (>15% in the next 10 years) for CVD."

As usual, the proposed fee schedule's effect varies by specialty. This year, the big winners were non-physicians, with clinical social workers seeing an overall 4% increase in their reimbursement -- as shown in the chart on p. 1561 of the -- followed by clinical psychologists at 3%. Anesthesiology got a 2% increase, while several other physician specialties -- including internal medicine, family practice, endocrinology, and geriatrics -- received a 1% bump. On the other side of the ledger, many specialties got no increase or a decrease; dermatology, interventional radiology, and vascular surgery would all see cuts of 2%.

It remains to be seen whether the proposed rule will be finalized without many changes, or if Congress intervenes to lessen the payment cut, as it often does. Last year, for example, CMS proposed an overall cut of nearly 3.4% to the 2024 fee schedule, but Congress to 1.69%; that took effect on March 9 and runs to the end of this year.

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    Joyce Frieden oversees MedPage Today’s Washington coverage, including stories about Congress, the White House, the Supreme Court, healthcare trade associations, and federal agencies. She has 35 years of experience covering health policy.