Key Takeaways from the 2025 Medicare Physician Payment Schedule and Quality Payment Program Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) has released the 2025 final rule for the Medicare Physician Payment Schedule (PFS) and Quality Payment Program (QPP), introducing several updates that will impact healthcare providers nationwide. From a decrease in the Medicare conversion factor to new policies for telehealth and behavioral health services, these changes reflect evolving priorities within the healthcare system. Below is a summary of the key proposals that could shape provider practices and patient care in the coming year.

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1. Decrease in Medicare Conversion Factor

• The Medicare conversion factor for 2025 is proposed to decrease by 2.80%, from $33.2875 to $32.3562. The anesthesia conversion factor will also drop from $20.7739 to $20.3340.

• This decrease is largely due to the expiration of a temporary update and zero baseline growth for 2025, coinciding with a projected 3.6% increase in the cost to practice medicine (MEI).

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2. New Policies for Telehealth Services

• New CPT codes for telemedicine office visits are proposed but will not be recognized for Medicare payment unless Congress extends current telehealth flexibilities.

• CMS proposes a new permanent policy for audio-only telehealth services in certain situations and additions to the telehealth services list for conditions like HIV and caregiver training.

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3. Changes in Payment for Specific Services

• CMS proposes new codes for caregiver training services and Advanced Primary Care Management (APCM) services, incorporating elements from existing care management codes.

• A new add-on code for infectious disease physician services and updated policies for the global surgical package transfer of care are proposed, impacting payment structures and practices.

4. Updates to the Quality Payment Program (QPP)

• The 2025 QPP will maintain the MIPS performance threshold at 75 points to avoid penalties. New MIPS Value Pathways (MVPs) are proposed, focusing on specialized care such as ophthalmology, dermatology, and gastroenterology.

• Proposed changes include adding six new episode-based cost measures and modifying existing measures to better align costs with performance.

5. Expansion of Preventive Services and Behavioral Health Initiatives

• Coverage for preventive vaccines is proposed to expand, including hepatitis B and PrEP for HIV prevention, with no cost-sharing for patients.

• New payment codes are proposed for behavioral health services, including safety planning interventions and digital mental health treatment devices.

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The 2025 Medicare Physician Payment Schedule and Quality Payment Program proposed rule presents a series of changes designed to address healthcare's evolving needs. From adapting telehealth policies to enhance access, expanding preventive services, and updating quality measures, CMS aims to balance cost control with high-quality patient care. 

The proposed decrease in the Medicare conversion factor poses a financial challenge, while new service codes and expanded behavioral health initiatives offer opportunities for growth and innovation. As these changes unfold, healthcare providers must stay informed, assess their operational strategies, and adapt to ensure compliance and optimize financial outcomes.