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Call to Action for Healthcare Providers – Comment on the 2025 Proposed Physician Fee Schedule
July 29, 2024
On July 10, 2024, the Centers for Medicare & Medicaid Services (CMS) released its Calendar Year (CY) 2025 Medicare Physician Fee Schedule (PFS) proposed rule. This proposed rule includes significant changes to Medicare physician payments and the Quality Payment Program (QPP), sparking widespread concern among healthcare providers. With a 60-day comment period ending on September 9, 2024, providers must voice their opinions and advocate for their needs.
The Proposed Changes and Their Impact
The proposed rule outlines several changes that will impact various medical specialties. Here are some of the key points:
MEDICARE PAYMENT CUTS
Overall Physician Payment: Physicians and other clinicians are looking at a proposed 2.8% cut for CY 2025, with the Conversion Factor (CF) reduced to $32.3562 from $33.2875 in 2024. This cut reflects the expiration of a 2.93% statutory payment increase and incorporates a 0.05% budget-neutrality adjustment.
Anesthesia Conversion Factor: The proposed rule includes cuts to the Anesthesia Conversion Factor, exacerbating the financial pressures anesthesia groups already face.
Pathology: Proposed payments for pathology services will drop by 2.4%, largely due to ongoing budget neutrality requirements requiring payment cuts that have been delayed by Congressional action.
TELEHEALTH
CMS has proposed limited extensions for Medicare telehealth policies. Unless Congress intervenes, major telehealth waivers will expire on December 31, 2024.
QUALITY PAYMENT PROGRAM (QPP)
Significant changes are proposed for the Merit-Based Incentive Payment System (MIPS), including cost and improvement activity scoring adjustments and further movement toward MIPS Value Pathways (MVPs).
The proposed reductions reflected will impact the reimbursement rates for diagnostic and other essential healthcare services, compounding existing financial challenges for laboratories and other healthcare providers. The proposed rule highlights the foundational issues associated with cutting fees in the face of rising costs and continued inflationary pressures. Healthcare providers are grappling with rising overhead, workforce shortages, and increasing administrative burdens. Meanwhile, Medicare physician payments have declined by 29% from 2001 to 2024.
Specific Impacts on Certain Specialties
CAP has underscored the need for long-term policy reform, noting that temporary fixes, such as short-term relief packages, have only delayed the inevitable financial strain on pathology services. In 2025, two such Congressional relief packages will expire. This will result in a 2.9% decrease in the conversion factor, placing additional financial pressure on pathology practices nationwide. CAP has calculated that pathology payments have decreased 7.0% since 2021.
Payment Adjustments: While aligning payment systems with current healthcare delivery models can be positive for some DME providers, others may experience reduced payment rates if the adjustments do not adequately cover the costs of newer technologies or higher service levels. Smaller providers might struggle with reduced margins, potentially impacting their ability to invest in new equipment or services.
Revised Reimbursement Methodologies: CMS is considering revisions to the methodologies used to calculate reimbursement rates for DME. This includes using weighted averages to better reflect the clinical intensity and cost of providing various types of equipment. These changes may lead to lower payments for certain types of equipment, especially if the weighted averages do not fully reflect the costs associated with more advanced or specialized devices. This could affect the financial viability of providing certain types of DME, leading to potential service limitations for patients.
A Call to Action
Engage with Legislative Stakeholders
Healthcare providers must engage with legislative stakeholders and regulatory agencies to minimize and reverse these cuts. The proposed 2.8% cut would mark the fifth consecutive year of payment reductions, which is unsustainable given the projected 3.6% increase in physician practice cost inflation for 2025.
Submit Your Comments
The proposed rule’s 60-day comment period closes on September 9, 2024. Providers can submit their comments at https://www.regulations.gov/, referencing file code CMS-1807-P. Your feedback is essential to influencing the final regulations, which will be issued around November 1, 2024, with policies effective from January 1, 2025.
The proposed CY 2025 Medicare Physician Fee Schedule presents significant challenges for healthcare providers. Providers must use this open comment period to advocate for fair and sustainable payment policies. Your voice can help shape the future of healthcare reimbursement and ensure that providers can continue to deliver high-quality care to their patients.
Act now – submit your comments and make your voice heard!