LUGPA Policy Overview: New CMS Proposed Rules on the Physician Fee Schedule (PFS) and the OPPS and ASC Payment Systems

On July 10, 2024, the Centers for Medicare & Medicaid Services (CMS) issued proposed rules regarding Medicare payments under the Physician Fee Schedule (PFS) and the Proposed Rule for OPPS and ASC Payment Systems, effective January 1, 2025.

These proposals encompass updates to the PFS and policies impacting outpatient and physician services in ambulatory surgical centers (ASCs). LUGPA’s advocacy and PA team will work with CMS and Congress to represent the interests of our members and to safeguard the viability and sustainability of independent medical practices, which play a critical role in providing high-quality, accessible, and patient-centered care.

The proposed 2.93% reduction in the PFS conversion factor for CY 2025 continues cuts that threaten the financial stability of independent practices. These reductions and other payment policy changes could significantly impact our members' ability to deliver essential healthcare services.

Below, we provide an overview of the proposed rules, highlighting key aspects that may affect our members and the broader landscape of independent healthcare delivery. We include quotes directly from the CMS Fact Sheets covering the proposed rules.

Overview

On July 10, 2024, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule regarding Medicare payments under the Physician Fee Schedule (PFS) and other Medicare Part B issues, effective January 1, 2025.

Since 1992, Medicare has paid for physician services under the PFS in various settings, including physician offices, hospitals, ambulatory surgical centers (ASCs), skilled nursing facilities, and beneficiaries' homes. Payments are based on Relative Value Units (RVUs) that account for work, practice, and malpractice expenses, with geographic adjusters applied to account for cost variations by area.

CY 2025 PFS Rate Setting and Conversion Factor

Proposed Reduction: Average payment rates under the PFS are proposed to be reduced by 2.93% in CY 2025.
Conversion Factor: The proposed estimated CY 2025 PFS conversion factor is $32.36, a decrease of $0.93 (or 2.80%) from CY 2024.

“By factors specified in law, average payment rates under the PFS are proposed to be reduced by 2.93% in CY 2025…. This amounts to a proposed estimated CY 2025 PFS conversion factor of $32.36, a decrease of $0.93 (or 2.80%) from the current CY 2024 conversion factor of $33.29.”

Urology Specific Notes

Decrease in Medicare Charges: If implemented, the proposed rule's policies will decrease total Medicare charges for urology by 1%, not including the conversion factor decrease.

Urology CPT Codes: CMS accepted the RUC-recommended values for numerous urology-specific CPT codes that the RUC team addressed in the latest cycle.

G2211 Guidance: CMS has provided additional information regarding the use of the G2211 Complex Care Add-on code. This code allows for payment when the O/O E/M base code is reported by the same provider on the same day as an annual wellness visit, vaccine administration, or any Medicare Part B preventive service delivered in an office or outpatient setting.

CPT Code 0655T: In the CY 2025 Proposed Rule, CMS proposes to reassign CPT Code 0655T (Transperineal focal laser ablation of malignant prostate tissue, including transrectal imaging guidance, with MR-infused images or other enhanced ultrasound imaging) from APC 5374 (Level 4 Urology Related Services) to APC 5375 (Level 5 Urology Related Services). This reassignment will impact the reimbursement rates for other codes within APC 5375. LUGPA will monitor this change and provide further updates as they become available.

Improving Ambulatory Specialty Care

CMS is soliciting feedback on designing a potential ambulatory specialty care model using the Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) to increase specialist engagement in value-based care.

“CMS is issuing a Request for Information to solicit feedback on the design of a potential ambulatory specialty care model that would leverage the Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) to increase the engagement of specialists in value-based care and expand incentives for primary and specialty care coordination.

In addition to the recent rule changes, CMS has announced plans to seek external input on GU-specific MIPS and MVP criteria. LUGPA will actively participate in this process by providing our recommendations.

Telehealth Services under the PFS

CMS proposes several updates for CY 2025:

New Services: Adding new services to the Medicare Telehealth Services List.
Frequency Limitations: Continuing suspension of frequency limitations for subsequent inpatient, nursing facility visits, and critical care consultations.
Audio-Only Communication: Allowing audio-only communication technology if the patient is incapable of or does not consent to video technology.
Practice Location: Extending policies allowing the use of the practitioner's enrolled practice location for telehealth services and virtual direct supervision for certain services.
Telehealth E/M Codes: CMS has proposed to NOT value and pay for the new telehealth E/M codes created by the CPT Editorial Panel and valued by the RUC. Instead, CMS proposes that Medicare pay for telehealth services using POS indicators and existing modifiers at the in-person rate.

Strategies for Improving Global Surgery Payment Accuracy

Transfer of Care Modifiers: Requiring transfer of care modifiers for all 90-day global surgical packages.
New Add-On Code: A new add-on code, GPOC1, is introduced for post-operative care services to reflect the time and resources involved.

We are proposing for practitioners to report the transfer of care modifiers in all transfer of care scenarios, which will provide CMS with more accurate information on the resources involved in furnishing components of global surgical packages. …For CY 2025, we are proposing a new add-on code, GPOC1, for post-operative care services to more appropriately reflect the time and resources involved in these post-operative visits to compensate the additional resources involved by practitioners who were not involved in furnishing the surgical procedure.”

Medicare Prescription Drug Inflation Rebate Program

CMS proposes to codify policies for the Medicare Prescription Drug Inflation Rebate Program, including methods for excluding 340B units from rebate calculations and reconciling rebate amounts for Part B and Part D drugs.

Proposed Rule for OPPS and ASC Payment Systems

On July 10, 2024, CMS proposed Medicare payment rates for hospital outpatient and Ambulatory Surgical Center (ASC) services. The Calendar Year (CY) 2025 Hospital Outpatient Prospective Payment System (OPPS) and ASC Payment System Proposed Rule is published annually and will have a 60-day comment period ending on September 9, 2024. The final rule will be issued in early November.

Updates to OPPS and ASC Payment Rates

OPPS Payment Rates: CMS proposes updating OPPS payment rates by 2.6% for hospitals meeting quality reporting requirements.
ASC Payment Rates: Similarly, ASC payment rates are proposed to be updated by 2.6%.

OPPS Proposal to Improve Payment for Specialized Diagnostic Radiopharmaceuticals

CMS proposes paying separately for diagnostic radiopharmaceuticals with per-day costs above $630 to ensure adequate payment for high-cost radiopharmaceuticals.

Ambulatory Surgical Center Quality Reporting (ASCQR) Program

CMS proposes adopting new quality measures and modifying existing policies to enhance reporting accuracy and transparency, with a focus on health equity and social drivers of health.

“….. Under the ASCQR Program, ASCs must report on quality measures in accordance with the program’s requirements; failure to do so may result in the ASC receiving a two-percentage point payment penalty to their annual payment rate update.

For detailed information, you can refer to the full CMS Fact Sheets at the following links:

Calendar Year (CY) 2025 Medicare Physician Fee Schedule Proposed Rule

CY 2025 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Proposed Rule (CMS 1809-P)