HHS Proposes Physician Payment Rule to Drive Whole-Person Care and Improve Health Quality for All Individuals with Medicare

Proposed policies would increase value-based care, strengthen primary care, and expand access to behavioral and oral health care

Today, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), proposed new policies in the calendar year (CY) 2025 Medicare Physician Fee Schedule (PFS) proposed rule to advance health equity and support whole-person care. The proposed rule would also strengthen primary care, expand access to behavioral health, oral health, and caregiver training services, maintain telehealth flexibilities, and expand access to screening for colorectal cancer and vaccinations for hepatitis B. The proposed rule reflects the Biden-Harris Administration’s vision for affordable, high-quality care for all Americans while driving innovation in the Medicare program.

“This proposed rule strengthens the care people with Medicare receive, advancing HHS’s goal of a health care system that not only treats those who are sick but also keeps people well,” said HHS Secretary Xavier Becerra. “The proposed rule continues our implementation of President Biden’s historic prescription drug law. The law lowers costs for seniors and people with disabilities and uses rebates from drug manufacturers to strengthen Medicare. It also increases access to behavioral and dental care, expands access to cancer screenings, and supports caregivers.”

“The Biden-Harris Administration is committed to protecting and expanding Americans’ access to quality, affordable health care,” said CMS Administrator Chiquita Brooks-LaSure. “The Calendar Year 2025 Physician Fee Schedule proposed rule supports physicians and other practitioners in delivering care that meets the needs of people with Medicare, including through telehealth flexibilities, strengthened primary, behavioral, and oral health care, and improved access to caregiver training services.”

Because of factors specified in law, average payment rates under the PFS are proposed to be reduced by 2.93% in CY 2025 compared to the average amount these services will be paid for most of CY 2024. The change to the PFS conversion factor incorporates the zero percent overall update required by statute, the expiration of the 2.93% increase in payment for CY 2024 required by statute, and a small adjustment necessary to account for changes in valuation for the work RVU portion of particular services. 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.

“Whole-person care means moving towards a health-care system that recognizes each unique aspect of a person and their wellbeing, including physical health, behavioral health, oral health, social determinants of health, and caregiving supports, and it all starts first with a foundation of primary care that can integrate these components,” said Meena Seshamani, M.D. Ph.D., Deputy CMS Administrator and Director of the Center for Medicare. “We are taking lessons learned from numerous CMS Innovation Center models to strengthen primary care teams and accountable care organizations, allowing them to better meet the unique needs of every person with Medicare.”

Strengthening Primary Care while Driving Quality Improvement and Innovation

A person-centered approach to health care starts with a trusting relationship with a primary care team. Over the last decade, value-based primary care models tested by the CMS Innovation Center have demonstrated that comprehensive primary care can lead to reductions in emergency department and hospital visits while better meeting patient needs. CMS is proposing to use these lessons learned to establish a new, advanced primary care management bundle under the PFS. As an important first step as part of a multiyear effort, this proposed payment uses coding describing certain primary care services that would be provided by advanced primary care teams, with adjustments for patient medical and social complexity to promote health equity. These services would be tied to primary care quality measures to improve health outcomes for people with Medicare.

In addition, the Innovation Center’s Million Hearts® model demonstrated that payment for cardiovascular risk assessment and cardiovascular care management led to fewer deaths related to cardiovascular disease and important reductions in heart attacks and strokes. Based on these evaluation results, CMS is proposing new payment and coding for these services to better assess and manage heart health.

CMS continues to drive high-quality care through its Quality Payment Program and is continually strengthening the Merit-based Incentive Payment System (MIPS). This rule proposes six new MIPS Value Pathways (MVPs): ophthalmology, dermatology, gastroenterology, pulmonology, urology, and surgical care. CMS is also proposing updates to MIPS scoring methodologies and measure inventories to give all clinicians the opportunity to achieve positive scores and continued improvement. These updates will help ensure that all eligible clinician types can continue to meaningfully participate in MIPS as CMS transitions to MVPs.

To further leverage progress on MVP development, the RFI “Building Upon the MVP Framework to Improve Ambulatory Specialty Care” solicits feedback on the design of a potential model to increase the engagement of specialists in value-based care. Under the potential model, participants would receive a payment adjustment based on their performance compared to other similar specialists on a set of clinically relevant MVP measures.

CMS is also proposing to strengthen the Medicare Shared Savings Program (Shared Savings Program) further, which is Medicare’s permanent Accountable Care Organization (ACO) program. For the first time, CMS is proposing to allow eligible ACOs with a history of success in the program access to an advance on their earned shared savings, known as prepaid shared savings, to encourage investment in staffing, health care infrastructure, and additional services for people with Medicare, such as nutrition support, transportation, dental, vision, hearing, and Part-B cost-sharing reductions. Additionally, CMS is proposing to further incentivize participation in the Shared Savings Program by ACOs that serve people with Medicare who are members of rural and underserved communities by adopting a health equity benchmark adjustment similar to that in the Innovation Center’s ACO REACH Model, which has been associated with increased safety net provider participation. CMS is also proposing to move the Shared Savings Program towards the Universal Foundation of quality measures, creating better quality measure alignment for providers and driving care transformation. Further, CMS is proposing a methodology to account for the impact of improper payments when reopening an ACO’s shared savings and shared losses calculations, which is complementary to the Anomalous Increases in Billing on Medicare Shared Savings Program Financial Calculations Proposed Rule issued on (June 28, 2024).  The proposed adjustments described in both rules would improve the accuracy, fairness, and integrity of Shared Savings Program financial calculations.

Expanding Access to Behavioral Health, Oral Health, and Caregiver Training Services

Addressing the country’s behavioral health crisis continues to be a key priority for CMS. In support of the President’s whole-of-government strategy to transform how we address behavioral health, CMS is proposing several additional, impactful changes in this year’s rule. CMS is proposing new payments for practitioners who are assisting people at high risk of suicide or overdose, including separate payment for safety planning interventions and post-discharge follow-up contacts. CMS is also proposing new payment and coding for use of digital tools that further support the delivery of specific behavioral health treatments, and also new coding and payment to make it easier for practitioners to consult behavioral health specialists. For Opioid Treatment Programs (OTPs), this rule also proposes new codes for FDA-approved medications for the treatment of Opioid Use Disorder (OUD) and known or suspected opioid overdose, increased telecommunication flexibilities for periodic assessments and methadone treatment initiation, and an increase in payment for intake activities to provide more comprehensive services for the treatment of OUD, including assessing for unmet health-related social needs, harm reduction intervention needs, and recovery support service needs.

In response to public feedback about Medicare coverage of dental services, CMS continues to explore payment policies for dental services critical to the success of certain medical care. CMS previously finalized that payment can be made for dental exams and certain necessary diagnostic and treatment services in connection with organ transplants (including stem cell and bone marrow transplants), cardiac valve replacements, valvuloplasty procedures, head and neck cancers, chemotherapy, chimeric antigen receptor T- (CAR-T) cell therapy and high-dose bone modifying agents (antiresorptive therapy). In this year’s rule, CMS proposes that payment can be made for certain dental services associated with dialysis treatments for end-stage renal disease and includes a request for comment about dental services related to diabetes care and covered services for individuals with autoimmune diseases receiving immunosuppressive therapies.

Finally, caregivers provide crucial, daily care to many people with Medicare, and CMS continues to prioritize caregiver training services consistent with the Biden Administration Executive Order on caregiving. In this year’s rule, CMS proposes new payment for caregiver training services related to direct care services and supports and would allow caregiver training services to be provided virtually, as clinically indicated.

Expanding Preventive Services: Hepatitis B Vaccinations, Drugs Covered as Additional Preventive Services, and Colorectal Cancer Screenings

CMS is proposing to expand coverage of the hepatitis B vaccine for people with Medicare who have not received the hepatitis B vaccine or whose vaccination status is unknown, with no cost to the individual. We are also proposing to allow people with Medicare to get the hepatitis B vaccine from pharmacies and to allow pharmacies and mass immunizers to roster bill Medicare consistent with current billing for flu, pneumococcal, and COVID-19 vaccines.

CMS is also proposing a fee schedule for drugs covered as additional preventive services since CMS has not yet covered or paid for any drugs under the benefit category of additional preventive services. On July 12, 2023, CMS released a Proposed NCD for Pre-Exposure Prophylaxis (PrEP) for Human Immunodeficiency Virus (HIV) Infection Prevention, which proposes to cover HIV PrEP drugs under Part B as additional preventive services.

CMS is also proposing to update and expand coverage of colorectal cancer screening to promote access and remove barriers for much needed cancer prevention and early detection, that may be especially important within rural communities and communities of color.

Maintaining Telehealth Flexibilities

During the COVID-19 public health emergency, CMS took action to expand access to telehealth services to ensure people could continue to access health care. Congress’ temporary extension of flexibilities related to payment for many telehealth services is scheduled, by statute, to expire at the end of 2024. In that context, CMS continues to examine telehealth and its impact on access and quality. Proposals in this year’s rule would allow CMS to maintain some important, but limited, flexibilities where possible and reflect CMS’ goal to maintain and expand the scope of and access to telehealth services where appropriate. For example, these proposals would continue to permit certain practitioners to provide virtual direct supervision to auxiliary personnel when required. CMS is also proposing temporary extensions of virtual supervision for a broader range of services when teaching physicians virtually supervise telehealth services provided by residents in teaching settings. However, absent Congressional action, beginning January 1, 2025, the statutory restrictions on geography, site of service, and practitioner type that existed prior to the COVID-19 PHE will go back into effect. After that date, people with Medicare will need to be in a rural area and a medical facility to receive non-behavioral health services via Medicare telehealth.

Inflation Reduction Act Implementation

The Inflation Reduction Act, President Biden’s prescription drug law, discourages runaway price increases by drug companies by requiring them to pay rebates to Medicare when prices increase faster than the rate of inflation for certain drugs under Part B and Part D. Additionally, Part B drugs that have raised prices faster than inflation in a given quarter will have a lower Part B coinsurance amount in a subsequent quarter. CMS will invoice drug companies for rebates owed to Medicare for Part B drugs for all calendar quarters in 2023 and 2024 no later than September 30, 2025, and for rebates owed to Medicare for Part D drugs for the 12-month applicable periods beginning October 1, 2022, and October 1, 2023, no later than December 31, 2025. The rebate amounts paid by drug companies will be deposited into the Federal Supplementary Medical Insurance Trust Fund, which will help ensure the long-term sustainability of the Medicare program for future generations. The CY 2025 PFS proposed rule codifies and builds on finalized guidance to continue implementation of the inflation rebates and proposes the next phase of implementation.

The 60-day comment period for the CY 2025 PFS proposed rule (CMS-1807-P) ends September 9, 2024.

For a fact sheet on the CY 2025 Physician Fee Schedule proposed rule, please visit: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2025-medicare-physician-fee-schedule-proposed-rule.

For a fact sheet on the CY 2025 Quality Payment Program proposed changes, please visit: https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2876/2025-QPP-Proposed-Rule-Fact-Sheet-and-Policy-Comparison-Table.pdf.

For a fact sheet on the proposed Medicare Shared Savings Program changes in the CY 2025 PFS proposed rule, please visit: https://www.cms.gov/newsroom/fact-sheets/fact-sheet-calendar-year-cy-2025-medicare-physician-fee-schedule-proposed-rule-cms-1807-p-medicare.

For a fact sheet on the proposed Medicare Prescription Drug Inflation Rebate Program changes in the CY 2025 PFS proposed rule, please visit: https://www.cms.gov/files/document/medicare-prescription-drug-inflation-rebate-program-proposed-rule-fact-sheet.pdf.

To view the CY 2025 Physician Fee Schedule and Quality Payment Program proposed rule, please visit: https://www.federalregister.gov/public-inspection/current.