The 2025 Proposed Physician Fee Schedule Arrives: Impacts Loom Over the Coming Year

The 2025 Medicare Physician Fee Schedule (PFS)  Proposed Rule has arrived delivering with it new policy and provision changes for next year that will have impacts across the healthcare world. As usual, the proposed rule outlines potential updates to a variety of policies and provisions that dictate payment for many services across healthcare included in the Quality Payment Program (QPP), the Merit-Based Incentives Payment System (MIPS), and Advanced Alternative Payment Models (APMs). Keep in mind that these policies are proposed and will not be made final until the release of the final rule. Even though the final rule is yet to be set in stone, professionals should be aware of impending changes that will shape payment, compliance, and the future of various programs.

Conversion Factor Consequences

For 2025, the conversion factor yields a mixed bag for radiology-related modalities. CMS is projecting a 2025 conversion factor of $32.356 as opposed to the 2024 conversion factor of $33.287. The American College of Radiology (ACR) notes that the calculations were made “By removing the 1.25 percent provided by the Consolidated Appropriations Act of 2023 that applied to services furnished from January 1, 2024, through March 8, 2024, and the 2.93 percent payment increase provided by the Consolidated Appropriations Act of 2024 that replaced the previous 1.25 percent increase and applied to services furnished from March 9, 2024, through December 31, 2024. CMS then applied a positive 0.05 percent budget neutrality adjustment”.

This seemingly small decrease has a mix of implications for radiology reimbursement. In something of a reprieve in years, CMS projects a zero percent change for radiology, nuclear medicine, and radiation oncology. For interventional radiology, a sharper aggregate decrease of two percent is expected.

Even though the impact remains neutral for some modalities, the adjustment still delivers grief for many stakeholders with organizations like the Society for Nuclear Medicine and Molecular Imaging stating, “Unfortunately, these cuts come during a period of continued growth in the cost of medical practice, with CMS projecting a 3.6% rise in the Medicare Economic Index for 2025.”

Clarification of Radiopharmaceutical Payment in a Physician Office Setting

Payment for radiopharmaceuticals in a physician’s office setting is an area often subjected to scrutiny and confusion, raising questions over methodologies. In the proposed rule, CMS has acted to provide clarity as to the precise methods available to Medicare Administrative Contractors (MACs) when it comes to radiopharmaceutical pricing.  For those radiopharmaceuticals delivered in a setting other than a hospital outpatient department, CMS states that MACs are responsible for imposing payment limits for these radiopharms and will use any methodology employed for payment limit decisions regarding radiopharms active on or before November 2003.

Update on Flexibilities and Direct Supervision with Telecommunications Technology

COVID-19 unleashed a wave of changes and flexibility to help healthcare professionals adapt to the pandemic. With the March 31, 2020, interim rule, CMS transformed the working definition of “direct supervision” over the course of the public health emergency. The definition was updated in regard to supervision for the following:

• Diagnostic tests
• Physician’s services
• And certain hospital outpatient services

The definition change granted a designated supervising professional to be immediately available using the virtual tools of two-way, real-time audio and video technology in lieu of their physical, in-person presence. Further rulemaking continued this flexibility extension, which was a popular decision  among stakeholders. These flexibilities were heavily utilized, and CMS received comments from practitioners on the critical need to keep this flexibility active. CMS, however, continues to hold concerns over patient safety and quality of care and is acting to collect more information for further evaluation.

According to the ACR, “CMS believes an incremental approach is warranted, particularly in instances where unexpected or adverse events may arise for procedures which may be riskier or more intense. Considering these potential safety and quality of care implications, and exercising an abundance of caution, CMS is extending this flexibility for all services on a temporary basis only.”

Expect this flexibility through real-time audio and visual telecommunications technology to remain available through December 31, 2025.

Stay tuned to future editions for more insight into the impacts of the final 2025 PFS rule.  

Information Sources:

https://public-inspection.federalregister.gov/2024-14828.pdf

https://www.acr.org/-/media/ACR/Files/Advocacy/AIA/ACR-Preliminary-Summary-2025-MPFS-PR-Final.pdf

https://snmmi.org/Web/News/Articles/SNMMI-Opposes-Conversion-Factor-Cuts-to-the-Medicare-Physician-Fee-Schedule-in-CMS–Proposed-FY25-Ru.aspx