Earlier this month, the Centers for Medicare and Medicaid Services (CMS) released the Calendar Year (CY) 2025 Proposed Medicare Physician Fee Schedule (PFS). This marks the fifth consecutive year that CMS has proposed reductions to Medicare payments, which has significant implications for both physicians and patients.  

For 2025, CMS proposes a conversion factor (CF) of $32.3562, representing a 2.8 percent decrease from the 2024 CF. Despite this 2.8 percent reduction, additional cuts could further impact reimbursement in 2025. Due to the lack of full funding for the American Rescue Plan, the Medicare program would contribute up to 4 percent under the “PAYGO” (Pay as You Go) rules and that cut will come back into the Medicare fee schedule in 2025; Congress has delayed these cuts twice, in 2022 and 2023. Additionally, a 2 percent cut due to sequestration, which was delayed during COVID-19 but reinstated on April 1, 2022, poses another threat, as efforts to delay sequestration cuts have been unsuccessful to date. If these PAYGO and sequestration cuts are not addressed by Congress this year, the worst-case scenario would be an overall decrease of 8.8 percent in 2025.  

Without intervention from Congress, the current relief measures that provide partial fixes to physician payment will expire at the end of 2024. The proposed rule is currently in its commentary period, which will end in September 2024. CMS is then expected to issue the MPFS 2025 final rule in early to mid-November, with an effective date of January 1, 2025. 

To stay informed about the latest developments on the MPFS and other critical healthcare issues, be sure to follow us on Twitter/X and LinkedIn, and tune into our podcast, Zotec Answers. Zotec will continue to actively advocate on behalf of our clients to minimize the impact of these reductions.