The Centers for Medicare & Medicaid Services (CMS) has released the 2025 Physician Fee Schedule, and there are significant changes that will impact reimbursement. Practices need to understand these changes now—not later—to prepare for how they'll affect revenue cycles.
Conversion Factor Decrease
The conversion factor has decreased again, this time to $32.03. That's a 2.3% drop from the 2024 rate. It's a trend that continues to frustrate providers who face rising operational costs. This decrease means lower payments for the same services—plain and simple. For a mid-sized practice handling thousands of Medicare claims annually, this seemingly small change can mean a difference of tens or even hundreds of thousands in revenue.
Telehealth Services
Telehealth continues to evolve post-pandemic. CMS is extending telehealth flexibilities through 2025, allowing audio-only visits for mental health services when appropriate. Also, several codes have been added permanently to the telehealth list—such as 99441-99443. But remember, these additions come with their own requirements. Documenting the medical necessity and maintaining robust patient records will be more critical than ever.
Evaluation and Management Services
E/M service codes are seeing adjustments, specifically in the RVUs for office/outpatient visits. CMS aims to encourage comprehensive visits rather than multiple fragmented ones. The RVU increase for codes like 99214 is a nod in this direction. Practices should review these E/M changes alongside their patient scheduling and care coordination practices. It could be a chance to focus on longer, more thorough visits that benefit patients and stabilize revenue.
Changes to Split/Shared Visits
CMS's ongoing refinements to split/shared visit billing mean new documentation obligations. In 2025, the clinician providing the substantive portion—more than half the total time spent—must now clearly document their role. Practices will need to ensure clarity in documentation, as audits will focus on these shared visit claims. This change could lead to decreased billing flexibility if practices aren't careful with their internal processes.
Chronic Care Management
Chronic Care Management (CCM) services have been given more latitude with higher reimbursement rates. The codes for CCM, like 99490, now have greater valuation, reflecting the ongoing importance of managing chronic conditions outside traditional office visits. Practices that focus on chronic disease management should see this as an opportunity—enhanced CCM services can lead to better patient outcomes and improved financial performance.
Quality Payment Program Adjustments
The Quality Payment Program (QPP) adjustments continue, with the performance threshold for MIPS increasing again. Practices now need to score even higher on MIPS measures to avoid penalties. Some providers might pivot more aggressively toward Advanced APMs to escape the QPP trap altogether. Monitoring measure performance meticulously is no longer optional; it's essential to avoid financial hits.
Impact on Practice Reimbursement
These changes represent a mixed bag for reimbursement. The conversion factor cuts will sting, but targeted increases for specific services might help offset losses if practices adapt quickly. Telehealth expansions mean more opportunities, but they come with compliance caveats. E/M code adjustments present a chance to shift away from the hamster wheel of high-volume visits toward more considered, valuable patient interactions.
Practical Steps Forward
Review and Analyze: Practices should immediately analyze their service mix. Which areas will be most impacted by the conversion factor decrease? Which services, like telehealth, offer new income opportunities?
Training and Documentation: Prepare your staff for the new documentation requirements. Ensuring everyone—from billers to providers—understands the documentation demands for split/shared visits and telehealth is critical.
Technology Check: Ensure your billing systems and EHRs are updated to reflect these changes. Automated alerts for specific coding changes can help avoid missed billing opportunities.
Patient Engagement: With telehealth and CCM expansion, consider how patient engagement strategies can be enhanced. Effective chronic care management and telehealth utilization depend heavily on how well patients are brought into the fold.
MIPS Strategy Reassessment: If your practice remains in MIPS, reassess your strategy to ensure quality measures align with the new thresholds. Adjust your quality reporting processes as necessary.
In a period where every dollar counts, being proactive about these CMS changes is non-negotiable. Practices that stay informed and adapt their strategies stand a better chance of maintaining financial health while continuing to provide high-quality patient care.
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