Navigating the CY 2025 CMS Physician Fee Schedule Proposals: Strategic Insights for Health Care Leaders

The Centers for Medicare & Medicaid Services (CMS) has released its calendar year (CY) 2025 physician fee schedule proposals, marking significant shifts in the health care regulatory landscape. These proposals are poised to impact payment structures, expand behavioral health services, extend telehealth provisions, and refine quality measurement programs. Below is a comprehensive breakdown of the key components and their implications for health care organizations.

Payment Structure Adjustments

The proposed rule for CY 2025 indicates a decrease in the conversion factor to $32.36, a 2.8% reduction from $33.29. This change is largely due to the expiration of a temporary statutory increase and a zero percent update dictated by existing Medicare legislation, coupled with a minor budget-neutrality adjustment. Health care providers will need to adjust their financial planning and strategies to navigate the reduced Medicare reimbursements effectively.

Enhancements to Behavioral Health Services

CMS is emphasizing improvements in behavioral health services, introducing new payment models to support safety planning interventions and follow-up care for patients experiencing behavioral crises, such as those at risk of suicide or overdose. This expansion also includes new Healthcare Common Procedure Coding System (HCPCS) codes for digital mental health devices, which will facilitate ongoing monitoring and management of behavioral health conditions, enhancing the scope and quality of mental health services.

Continued Flexibility in Telehealth

Several telehealth waivers introduced during the pandemic are proposed to be extended through 2025. These include provisions for using practice addresses for telehealth services and allowing rural health clinics to bill for these services. By maintaining these flexibilities, CMS aims to further embed telehealth into routine health care delivery, particularly benefiting patients in rural and underserved areas.

Streamlining Quality Reporting with Merit-Based Incentive Payment System Value Pathways

CMS proposes the introduction of six new Merit-based Incentive Payment System Value Pathways (MVPs) and is exploring the mandatory participation in these pathways starting in CY 2029. These pathways are designed to simplify reporting processes and are oriented toward improving health outcomes. This move indicates a strategic shift toward performance-based health care, emphasizing quality over quantity.

Refining Financial Assessments

To enhance the integrity of financial assessments, CMS recommends excluding payments related to significant, anomalous, or suspicious billing activities from the calculations used for performance evaluations in the Medicare Shared Savings Program. This proposal aims to ensure that performance metrics are a more accurate reflection of the quality of care provided and are not distorted by irregular billing practices.

Preparing for Regulatory Changes

The CY 2025 CMS proposals reflect a comprehensive approach to adapting health care policies to current needs, emphasizing behavioral health, telehealth, and quality improvements. Health care leaders must assess these changes thoroughly and begin preparing strategies for adaptation. This proactive engagement will be crucial for health care organizations aiming to remain compliant, efficient, and focused on delivering high-quality care in an evolving regulatory environment.

About the Author

Shannon Smith is Assistant Vice President, Clinical Success at Zyter|TruCare. With a robust background in clinical informatics and years of experience as an ICU nurse, Shannon plays a key role in enhancing customer engagements and streamlining the implementation of clinical solutions. At Zyter|TruCare, Shannon is known for her expertise in clinical workflows and her skill in making complex clinical concepts accessible to non-clinical team members. Her leadership is marked by a focus on empathy, clear communication, and a commitment to supporting her team, making her an essential asset in the company's efforts to optimize health care delivery.