Understanding the 2025 Proposed Physician Fee Schedule: Essential Updates for Primary Care

The Centers for Medicare and Medicaid (CMS) released the Proposed Physician Fee Schedule for 2025 which has some positive changes for the Medicare Shared Savings Program (MSSP) and will once again require Congress to address physician payment cuts.

By Casey Korba, Director of Policy

Congress will likely address physician payment cuts

As required by law, CMS has calculated the conversion factor, and, every year since 2020, Congress has stepped in to intervene. CMS has proposed a 2.8% reduction in the Medicare conversion factor from $33.29 to $32.36 in 2025. This takes the national average for a Level 4 E&M (99214) from $128.17 to $124.59. Primary care experienced a large increase in Medicare payments in 2021. However, inflation wiped out much of that increase and will continue to eat away at this investment unless Congress permanently changes the way the fee schedule is annually updated.

Because we are in an election year, which means less time and focus for Congress to make sweeping changes in Medicare payment reform, we expect a temporary fix this year and the potential for more permanent changes next year. An appetite to address the failures of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and make more permanent fixes to Medicare payment that include continuing the shift to value-based care appears to exist. Aledade, along with many others in the ACO and primary care community, will continue to work with Congress on both temporary and permanent solutions.

CMS seeks to encourage care coordination by introducing Advanced Primary Care Management Services

CMS is leveraging learnings from Innovation Center models, and is introducing Advanced Primary Care Management Services (APCM). APCM takes a bundling approach to codes which emphasize longitudinal relationships between the primary care practice and the patient. In the last several years, CMS has introduced many management codes to supplement the traditional primary care Evaluation & Management (E&M) coding, including Principal Care Management, Chronic Care Management, and Transitional Care Management. However, given that some clinicians experience difficulty integrating these approaches into their practice, uptake has remained low. The APCM proposal is one strategy that could combat this low uptake.

MSSP proposals focus on prepaid savings, incentivizing eCQMs, adding new quality measures and introducing the Health Equity Benchmark Adjustment (HEBA)

CMS has heard Aledade and the ACO community tell them that the hardest part of being in an ACO is that the major financial incentive - the Shared Savings check - comes only once a year, in the fall. The Primary Care ACO Flex model, which is set to start in 2025, addresses this challenge through monthly prospective primary care payments. Now, CMS is proposing to introduce Prepaid Savings in MSSP for mature ACOs. These ACOs could request that CMS advance 50% of their shared savings on a quarterly basis, without interest costs or a reduction in total dollars earned. Aledade is excited about this proposal, but we will submit comments to the effect that requirements and conditions on how the funds must be used and reported are unnecessary. While the goal appears to be to increase participation and retention in the ACO program, the proposal as currently written will be unnecessarily complex and burdensome for physicians, and will incur implementation costs for CMS.

Health Equity Benchmark Adjustment continues CMS' goal of closing gaps in disparities

The Health Equity Benchmark Adjustment aims to help ACOs that have an above average proportion of assigned beneficiaries enrolled in Medicare Part D Low Income Subsidy, or are dually eligible for Medicare and Medicaid. This adjustment joins the prior savings adjustment and the regional adjustment. CMS will look at all three adjustments. Of the three, the highest will be the final adjustment to the ACO's benchmark.

Aledade will continue to advocate for fewer but more meaningful quality measures that focus on outcomes

CMS has proposed required reporting of two more process measures - breast cancer screening and colorectal cancer screening. Aledade will reiterate our comments that more does not necessarily equal better in terms of quality reporting. We also will underscore that while focusing on processes is important in clinical operations, for quality measurement, the chief focus should be outcomes. CMS has proposed extending the electronic Clinical Quality Measure (eCQM) reporting incentive to continue encouraging ACOs to report. A Complex Organization Adjustment for all advanced alternative payment entities reporting eCQMs, proposed to begin in Performance Year 2025, would provide additional points to the ACO's final quality score. Since the transition to eCQMs is especially challenging, we are working with the ACO community to ensure that CMS implements a policy that does not leave any independent physician practice behind.

Other welcome proposals: Anomalous billing, attribution, beneficiary notification, telehealth

Historically, when ACOs reported suspicious activity, shared savings would be calculated and distributed well before the government's investigation was complete. That meant that even if the government formally declared the suspicious activity as fraud and abuse, no meaningful action had occurred before the shared savings were distributed.

CMS recognizes that while ACOs can quickly identify fraud and abuse the current timeframe denies ACOs any financial relief. Spurred by the major catheter fraud issue that transpired last year, CMS has proposed to remove anomalous and highly suspect billing for ACOs both before it is officially determined to be fraud and before the conclusion of the ACO financial reconciliation.

On the attribution front, once again CMS has proposed additional codes to help ACOs with beneficiary assignment. Aledade is analyzing these codes closely to ensure they will help attribution for primary care practices. CMS also has refined voluntary assignment and rolled out proposals to reduce the burden of beneficiary notification requirements for ACOs.

While Congress will need to act to extend pandemic-era telehealth flexibilities, CMS has worked within its purview to maintain these flexibilities. The proposed PFS would allow federally-qualified health centers and rural health centers to continue using audio-only for telehealth visits, and waive, through the end of 2025, the required in-person visit for mental health services via telehealth. CMS also proposed to continue allowing providers to withhold reporting their home address if they provide telehealth from their home through 2025.

The future of MSSP could include a full risk track

Leveraging learnings from other models, including Next Generation ACO and ACO REACH, CMS has issued a Request for Information on implementing a higher risk track in MSSP. While other models like REACH allow for ACOs to take 100% risk, ACOs are limited to 75% in MSSP. With REACH ending in 2026, CMS is interested in how it might go about making this an option in the permanent, flagship ACO program.

Aledade will be sharing our ideas on how to move forward on a full risk track, along with many other comments on how to further innovate MSSP and ensure that physicians can continue to thrive in accountable care. We also will be advocating for physician payment reform as we head to Capitol Hill this September with Aledade member physicians, who will share their personal stories of how the ACO program has improved the health of their patients and communities. Stay tuned for more as we continue to shape policy and stand up for independent primary care and community health centers.

For more information, watch our webinar recording on the 2025 Proposed PFS.

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