The proposed 2025 Medicare Physician Fee Schedule puts more financial pressure on providers.
The proposed 2025 Medicare Physician Fee Schedule puts more pressure on providers’ billing practices as well as their bottom line.
The Centers for Medicare and Medicaid Services (CMS) is poised to cut physician reimbursement by 2.8%, making it the fifth consecutive year of payment cuts. This, along with the anticipated 3.6% increase to practice costs due to inflation, does not bode well for revenues.
“The cost of healthcare is rising. There is clearly inflation in our economy, and having the reimbursement go down is absolutely the wrong direction,” Andy Anderson, executive vice president and chief medical and quality officer at RWJBarnabas Health, previously told HealthLeaders.
“The Physician Fee Schedule model is not sustainable if the reimbursement is going to be cut,” he added.
According to Anderson, the reimbursement needs to keep pace with inflation and healthcare costs.
The proposed rule will also tackle suspicious billing practices in Medicare’s Shared Savings Program, taking improper payments into account when revisiting the shared savings and shared losses calculations for accountable care organizations. Earlier this month, CMS proposed a rule examining the program’s billing activity after noting a significant increase in “highly suspect” claims.
In addition to the reimbursement cut and increase billing scrutiny, a health equity benchmark, similar to that used for the ACO REACH Model, would be adopted to incentivize organizations in more rural and underserved areas to participate.
CMS will accept public comments on the proposed 2025 PFS until September 9.
Jasmyne Ray is the revenue cycle editor at HealthLeaders.
KEY TAKEAWAYS
Inflation is expected to increase practice costs by 3.6%
The agency is also increasing its scrutiny of suspicious billing practices.