The Centers for Medicare and Medicaid Services (CMS) released the final 2025 Medicare Fee Schedule, which included a reduction in the average payment for providers and modifications to the telehealth services covered by Medicare.
Pay Changes
The rule, which went into effect January 1, 2025, will result in a net 2.8% decrease in Medicare payments to physicians compared with the rates in place for calendar year 2024. The rates, eliminating past increases that were designed to be temporary, adhere to statutory limits imposed by Congress. CMS, without congressional intervention, could not unilaterally increase physician pay for 2025.
Meanwhile, nationwide, hospitals and ambulatory surgery centers will receive modest Medicare rate increases, 2.9% for outpatient care and 2.6% for inpatient care, that industry advocacy organizations say still fall short of keeping up with health care costs and challenges ranging from staffing shortages to cybersecurity threats.
The American Hospital Association and Medical Group Management Association, among others, have called upon CMS to work with Congress to secure a pay increase for providers and additional hospital funds, citing the need for a long-term, sustainable, plan for health care spending in line with inflation and other market pressures.
Telehealth
The popularity of telehealth grew exponentially during the COVID-19 pandemic as CMS temporarily relaxed many of the rules surrounding the delivery of virtual health care services. However, many of the key flexibilities that made telehealth so appealing were set to expire on December 31, 2024.
The new 2025 proposed Fee Schedule includes provisions permanently adopting the ability of supervising providers to provide direct supervision via virtual presence to other health professionals so long as the supervisor can be “immediately available.”
For Federally Qualified Health Centers (FQHCs) and Rural Health Centers (RHC), the new rule would delay the in-person visit requirement for mental health services provided via telehealth to patients at their homes through December 31, 2025.
There are also new billing codes for some services provided virtually, and an allowance for audio-only services for patients who are unable or unwilling to use video technology.
However, the proposal does not include every pandemic era expansion. CMS stated in a press release regarding the proposed rule that “absent Congressional action, beginning January 1, 2025, the statutory restrictions on geography, site of service, and practitioner type that previously existed will go back into effect.
That means that after that date, people with Medicare will need to be in a rural area and at a medical facility to receive non-behavioral health services via Medicare telehealth. Such a limitation would drastically reduce the access to care upon which many Medicare patients have come to depend.
Congress is considering several bills regarding telehealth that could resolve this issue. While the matter generally receives bipartisan support, as of the date of this writing, a bill has yet to pass.