CMS Unveils Proposed 2025 Physician Fee Schedule, Maternal Health Standards

On July 10, 2023, the US Department of Health and Human Services (HHS), through CMS, unveiled the proposed rule for the 2025 Physician Fee Schedule.¹ The rule includes a 2.8% reduction in the conversion factor, reducing it to $32.36 from $33.29 in 2024. This adjustment follows the expiration of a 2.93% statutory payment increase for 2024, maintaining a 0.00% update under the Medicare Access and CHIP Reauthorization Act, and includes a 0.05% budget-neutrality adjustment.

The 2025 Physician Fee Schedule includes a 2.8% conversion factor reduction, expanded behavioral health services, extended telehealth waivers, new Quality Payment Program pathways, and measures to address suspect billing, alongside a Biden administration initiative introducing federal maternal health standards for hospitals.

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Key Proposals in the Physician Fee Schedule

The proposed fee schedule includes measures to enhance behavioral health services, extend telehealth waivers, and introduce new Merit-based Incentive Payment System Value Pathways (MVPs) starting in 2025. The rule also addresses significant, anomalous, and highly suspect (SAHS) billing activity by excluding such payments from financial calculations and historical benchmarks used for reconciliation.

Behavioral Health Services

According to the proposal, CMS is aiming to improve payment for and access to behavioral health care services. The proposals encompass expanded payments for opioid treatment programs (OTPs) to cover new FDA-approved overdose reversal medications. Additionally, CMS plans to extend flexibilities for telehealth use by OTPs, making it easier for patients to access necessary treatments remotely.

In terms of mental health treatment, this includes Medicare payment for digital mental health treatment devices used in conjunction with professional behavioral health services under a treatment plan.² The plan introduces 3 new Healthcare Common Procedure Coding System (HCPCS) codes and monitors the use of these devices.

Additionally, CMS is proposing 6 new G codes, a subset of HCPCS codes used to identify professional services and procedures that are often temporary and specific to Medicare, for mental health practitioners to improve the integration of behavioral health into primary care. Comments on the appropriateness of coding and payment for Intensive Outpatient Program (IOP) services in additional settings, such as Certified Community Behavioral Health Clinics (CCBHCs) and facilities offering crisis stabilization and urgent care, were encouraged in the proposal.

Telehealth Waivers

The rule also extends certain telehealth waivers through 2025. These extensions would allow providers to report enrolled practice addresses instead of home addresses for home-based services, thus simplifying administrative processes.¹

Furthermore, it would enable federally qualified health centers and rural health clinics to bill for telehealth services, expanding access to care in underserved areas. Virtual supervision for residents in all teaching settings would also be permitted when services are provided virtually, supporting the continuation of medical education and supervision through telehealth.

Quality Payment Program

The introduction of 6 new, optional Merit-based Incentive Payment System Value Pathways (MVPs) for reporting was proposed to start in 2025. These new pathways are designed to provide more flexible and targeted reporting options for providers. In addition, CMS is seeking feedback on potentially mandating MVP participation beginning with the 2029 reporting period, aiming to gather input on the feasibility and impact of such a requirement.³

Medicare Shared Savings Program

CMS is also proposing to strengthen the Medicare's permanent accountable care organization (ACO), the Medicare Shared Savings Program, by allowing ACOs that have shown success in the program to receive an advance on earned shared savings.¹ This proposal of prepaying shared savings intends to encourage ACOs to invest in staffing, infrastructure, and services like nutrition support, transportation, dental, vision, hearing, and Part-B cost-sharing reductions for patients with Medicare.

CMS also aims to incentivize ACOs serving rural and underserved communities to participate in the Shared Savings Program with a health equity benchmark adjustment. This proposal is similar to the CMS Innovation Center's ACO REACH model, which is linked with increased participation of safety net providers.

The proposal also includes measures to address SAHS billing activity. Specifically, CMS proposed to exclude payment amounts from financial calculations for the relevant calendar year when SAHS billing activity is identified. Therefore, these excluded amounts would not be considered in historical benchmarks used for reconciliation, ensuring that financial calculations reflect more accurate and legitimate billing practices.³

Public comments on the proposed rule are open until September 9.

Biden Administration's Maternal Health Initiative

The Biden administration also introduced a significant initiative to enhance women's health, focusing on maternal care.⁴ This initiative addresses growing concerns about maternal health outcomes in the US, which, according to the latest CDC report analyzing the mortality rates in 2021, 32.9 per 100,000 of those who were pregnant and gave birth in the US died.

According to recent research, the US maternal mortality rate has exhibited a drastic increase (from 20.1 to 23.8 in 2019 and 2020, respectively) and is the highest among developed nations.⁵

"Unfortunately, our nation has one of the highest maternal mortality rates of any wealthy country in the world," a White House news release said.⁴ "This maternal health crisis is particularly devastating for Black women, Native women, and women in rural communities who all experience maternal mortality and morbidity at significantly higher rates than their white and urban counterparts."

Key Components of the Maternal Health Proposal:

• Federal Requirements for Hospitals: The CMS proposal included the first-ever federal maternal health and safety requirements for hospitals to remain in Medicare.⁶ These standards include having basic resuscitation equipment in labor and delivery rooms, documenting maternal health training for staff, and having written policies for transferring patients to other hospitals.
• Emergency Protocols: All hospitals offering emergency services, even those without obstetrics units, must have proper protocols and supplies for emergency deliveries and other needs. Hospitals not adhering to these standards could eventually be excluded from CMS programs covering almost 40% of US patients.
• Financial Implications: The hospital industry is expected to invest approximately $4.46 billion over 10 years to implement these new standards, averaging $70,671 per hospital per year. Additionally, a 2.6% increase in Medicare payments, amounting to $5.2 billion, is proposed for 2025.

Vice President Kamala Harris emphasized the administration's commitment to addressing the maternal health crisis, and the racial and demographic disparities present with it. However, the policy has met resistance from hospital advocacy groups, who argue that it imposes excessive burdens and could deter hospitals from offering obstetric services, therefore advocating for a more collaborative and flexible approach to improving maternal health.

Alternatively, patient advocates support the proposed standards, viewing them as essential steps toward better maternal care and dismissing concerns about hospitals being excluded from CMS programs as exaggerated.

Moving Forward

CMS will review public comments on both the proposed rule for the Physician Fee Schedule and the new maternal health standards.¹

"The Vice President will continue to use her platform to raise public awareness about the maternal health crisis in our nation, as she has done while calling on states to extend Medicaid postpartum coverage, highlighting the Maternal Mental Health Hotline, and more," the White House statement concluded.⁴

References

1. HHS proposes physician payment rule to drive whole-person care and improve health quality for all individuals with Medicare. News release. HHS. July 10, 2024. Accessed July 11, 2024. https://www.cms.gov/newsroom/press-releases/hhs-proposes-physician-payment-rule-drive-whole-person-care-and-improve-health-quality-all

2. Calendar Year (CY) 2025 Medicare Physician Fee Schedule proposed rule. News release. CMS. July 10, 2024. Accessed July 11, 2024. https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2025-medicare-physician-fee-schedule-proposed-rule

3. CMS issues CY 2025 physician fee schedule proposed rule. American Hospital Association. July 10, 2024. Accessed July 12, 2024. https://www.aha.org/news/headline/2024-07-10-cms-issues-cy-2025-physician-fee-schedule-proposed-rule

4. The White House blueprint for addressing the maternal health crisis: Two years of progress. News release. The White House. July 10, 2024. Accessed July 11, 2024. https://www.whitehouse.gov/briefing-room/statements-releases/2024/07/10/the-white-house-blueprint-for-addressing-the-maternal-health-crisis-two-years-of-progress/

5. Grossi G. Confronting deadly maternal health disparities, part 1: US implements doula support. The American Journal of Accountable Care. 2024;12(2):50-53. https://doi.org/10.37765/ajac.2024.89573

6. Goldman M. Biden plan requires hospitals to improve maternal care. Axios. July 11, 2024. https://www.axios.com/2024/07/11/biden-maternal-health-standards-hospitals-medicare