The Proposed 2025 Medicare Physician Fee Schedule Has Arrived! Key Takeaways for Digital Health Innovators
The 2025 Medicare Physician Fee Schedule Proposed Rule (the “2025 Proposed Rule”) issued by the Centers for Medicare and Medicaid Services (or “CMS”) on July 10, 2024 contains a number of new policy proposals with significant implications for healthcare innovators. Below is an overview of the most important proposals and the opportunities they present for healthcare innovators and digital health companies.
New “Advanced Primary Care Management” HCPCS Codes
The biggest and most surprising proposal by CMS involves an entirely new take on care management services in a primary care setting. CMS points to lessons learned through its Innovation Center’s advanced primary care demonstration models (such as Comprehensive Primary Care Plus or CPC+) in creating three new HCPCS codes (HCPCS codes GPCM1, GPCM2, and GPCM3) that focus less on minutes spent by clinicians on specific activities and more on providing the most comprehensive and accessible care management services to patients via their preferred method of care delivery.
The Advanced Primary Care Management (or “APCM”) HCPCS codes bundle elements of the existing Chronic Care Management (“CCM”) and Principle Care Management (“PCM”) codes set with Communications Technology-Based Services (“CTBS”) codes for virtual check-ins, remote evaluation of images, e-visits, and interprofessional consults to create what CMS refers to as an “enhanced care management” bundle. Unlike CCM and PCM services, the APCM codes are not time-based – meaning, care management services that do not meet the 20 or 30-minute requirements for CCM or PCM would be billable under APCM.
“Unlike CCM and PCM services, the APCM codes are not time-based – meaning, care management services that do not meet the 20 or 30-minute requirements for CCM or PCM would be billable under APCM. ”
The codes are stratified into three levels based on number of chronic conditions and whether a patient is a “Qualified Medicare Beneficiary” Dual Eligible, in an effort to capture additional support needed for those impacted by social determinants of health. All in all, there are 13 required elements for the APCM code sets – many of which are likely already in place for practitioners providing CCM and PCM services. But some new requirements will raise the bar for practices who want to provide APCM services. CMS anticipates practices will be able to offer APCM to most, if not all, of their patients so long as they have the capability to provide all 13 required elements.
The new APCM code set is clearly an effort by CMS to move primary care practices toward value-based care. The key to adoption of these new services may well be the associated reimbursement amounts that primary care practices can reasonably expect to receive for implementing the numerous requirements of an ACPM program. As proposed, the numbers are not looking great. Stay tuned for a deeper dive into the details of APCM and proposed reimbursement rates in an upcoming post.
Payment for Digital Mental Health Treatment (“DMHT”) Devices
While this 2025 Proposed Rule did not create the new benefits category that the Digital Therapeutics industry has been hoping for, there is cause for celebration by those DTx companies focusing on behavioral health services. The 2025 Proposed Rule proposes payment for practitioners who use Digital Mental Health Treatment devices with patients as part of their ongoing behavioral health treatment. HCPCS Code GMBT1 is for “supply of a DMHT device,” with HCPCS code GMBT2 providing reimbursement for “first 20 minutes of treatment management services” and GMBT3 for “each additional 20 minutes.” The services codes are cross-walked to CPT Codes 98980 and 98981, the existing Remote Therapeutic Monitoring services codes.
Per the Proposed Rule, DMHT devices (which CMS specifies includes those previously referred to as “digital CBT” devices) “refer to software devices cleared by the Food and Drug Administration (FDA) that are intended to treat or alleviate a mental health condition, in conjunction with ongoing behavioral health care treatment under a behavioral health treatment plan of care, by generating and delivering a mental health treatment intervention that has a demonstrable positive therapeutic impact on a patient’s health.” This language differs from that used by CMS in promulgating the Remote Therapeutic Monitoring codes for “supply of device;” that language requires only that the software used meets the FDA’s definition of a device, NOT that it have been “cleared” through a specific regulatory pathway. As written, the language in the Proposed Rule eliminates payment for software that meets the definition of a device but is subject to FDA’s enforcement discretion, as well as for software that is a device exempt from FDA pre-market clearance. Stakeholders should consider submitting comments on this issue.
New Reimbursement Construct for Care Management Services in FQHCs and RHCs
The 2024 Physician Fee Schedule added Remote Physiologic Monitoring and Remote Therapeutic Monitoring services to the list of care management services billable by FQHCs and RHCs under HCPCS G0511. As a result, G0511 is currently used to identify several care management services (e.g., CCM, PCM, RPM, RTM, BHI, etc.) delivered by RHCs and FQHCs. Even though the code could be billed multiple times for multiple services during a calendar month, doing so caused confusion among stakeholders as to whether the underlying services delivered could or should be captured when billing HCPCS G0511. Interested parties subsequently requested that CMS allow FQHCs and RHCs to bill separately for each underlying care management service using the associated CPT code rather than G0511.
For 2025, CMS proposes to do away with G0511 and allow RHCs and FQHCs to simply utilize existing care management CPT codes submitted by Part B providers, including the proposed APCM codes if finalized. As proposed, payment will be at the national non-facility MPFS payment rate.
While the substance of this proposal makes a lot of sense from a practical perspective, stakeholders should be aware that it could result in reduced payment for some services since the combined rate under HCPCS G0511 was higher than that of some individual services.
Telehealth Flexibilities for Substance Use Disorder Treatment (“SUD”)
In the Proposed Rule, CMS attempts to align its telehealth flexibilities with DEA and SAMHSA requirements in an effort to reduce treatment barriers for SUD patients. CMS proposes two permanent telehealth flexibilities relating to SUD treatment:
CMS proposes that all "periodic assessments" that occur for SUD patients may occur via audio-only telehealth when video is not available
CMS proposes that initial intake for SUD patients who will receive methadone treatment may occur via audio-visual telecommunication.
Definition of “Direct Supervision”
CMS once again proposes to extend through 2025 the definition of “direct supervision” to include availability of a supervising practitioner by audio-video communications technology, rather than requiring auxiliary staff and the supervising practitioner to be in the same physical location. CMS follows this proposed extension with a “Proposal to Permanently Define Direct Supervision to Include Audio-Video Communications Technology for a Subset of Services.” These services would include:
“Services furnished incident to a physician or other practitioner’s service when provided by auxiliary personnel employed by the billing practitioner and working under their direct supervision, and for which the underlying HCPCS code has been assigned a PC/TC indicator.”
“Services described by CPT code 99211 (Office or other outpatient visit for the evaluation and management of an established patient that may not require the presence of a physician or other qualified health care professional).”
General Supervision for All Physical Therapy and Occupational Therapy Services
To date, CMS has required physical therapists and Occupational Therapists to provide direct (in-person) supervision of PT assistants (“PTAs”) and OT assistants (“OTAs”), respectively. In recent years, CMS has continuously received feedback that this requirement is unnecessary, impractical, and dampens access to care for some patients. While they have made exceptions to the rule in certain cases like RTM, CMS has declined to make sweeping changes to the supervision requirement in previous rules.
For 2025, however, CMS is proposing to allow general (remote) supervision of PTAs and OTAs to the extent permitted under applicable state law for all services, which they expect will increase access and more closely align Medicare policy with state supervision rules.
What’s Next?
Many of the proposed changes described above offer new opportunities for healthcare innovators in the form of more comprehensive care management services for broader patient populations and loosened supervision requirements that more closely align with today’s increasingly impactful virtual care settings. It will be important for CMS to get the details right to ensure stakeholders can implement these changes to the extent necessary for quality patient care.
If you have thoughts on the proposals above, CMS will accept public comments until September 9, 2024. We’ve seen these comments directly impact the substance of the final fee schedule, so we encourage healthcare companies to provide input on the proposals that matter most to them — and, of course, we’re here to help you draft and submit your comments.
And if you’re looking for a legal partner who can help you navigate these and other regulatory changes in healthcare, our team at Nixon Law Group is here to support you. Contact us today to learn how we can work together.