On December 21, 2024, President Biden signed the American Relief Act (HR 10545) into law. Perhaps more important than averting a government shutdown, the newly enacted law will impact your reimbursement in 2025. Medical practices should be aware of the following changes:
Professional fee reimbursement for Medicare is being reduced by 2.83%. The CY 2025 Physician Fee Schedule (PFS) conversion factor is $32.35, a decline of $0.94 from the 2024 conversion factor of $33.29. At the last minute, Congress removed the patch that would have prevented the decrease. While there is still hope for Congressional intervention this winter, it will be challenging to prioritize the topic of Medicare payments to physicians given significant governmental administrative transitions. This federal decision represents another frustrating development for medical practices. A recent analysis by the American Medical Association highlighted that payments for professional services have fallen by a whopping 26% since 2001. Many experts believe the inability to reverse this latest cut may prompt more physicians to retire, further limiting patient access to care – which is arguably already at a crisis point. While the decline is specific to Medicare, many commercial payer contracts have rates pinned to Medicare’s Resource-Based Relative Value Scale, so the impact of this cut has consequences that reach far beyond the Medicare program.
While the reimbursements remain on the government’s chopping block, telemedicine received a temporary reprieve under the new law. Set to revert to pre-COVID restrictions on January 1, 2025, the federal law extended the current flexibilities for telemedicine coverage for Medicare patients through March 31, 2025. Practices engaged in telemedicine should closely monitor legislative negotiations this winter, as access to this method of care delivery could face restrictions or elimination by the government.
Other changes to the Medicare Physician Fee Schedule in 2025, announced on November 1, 2024, by the Centers for Medicare & Medicaid Services (CMS), were covered in our November issue. We will continue to keep you apprised of reimbursement changes that may affect your bottom line.
Elizabeth Woodcock is the founder and principal of Woodcock & Associates. She has focused on medical practice operations and revenue cycle management for more than 25 years. She has led educational sessions for a multitude of national professional associations and specialty societies, and consulted for clients as diverse as a solo orthopaedic surgeon in rural Georgia to the Mayo Clinic. She is author or co-author of 17 best-selling practice management books, to include Mastering Patient Flow and The Physician Billing Process: Avoiding Potholes in the Road to Getting Paid. Elizabeth is a Fellow in the American College of Medical Practice Executives and a Certified Professional Coder. In addition to a Bachelor of Arts from Duke University, she completed a Master of Business Administration in healthcare management from The Wharton School of Business of the University of Pennsylvania. She is currently a doctoral student at the Bloomberg School of Public Health of Johns Hopkins University.
The contents of The Sentinel are intended for educational/informational purposes only and do not constitute legal advice. Policyholders are urged to consult with their personal attorney for legal advice, as specific legal requirements may vary from state to state and/or change over time.
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