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2025 Medicare Reimbursement Changes to the Physician Fee Schedule

Medicare Physician Fee Schedule 2025 Updates

Get acquainted with changes to Medicare provider reimbursement rates that may affect you and your practice this year.

The Centers for Medicare & Medicaid Services (CMS) released policy proposals and updates that took effect on January 1, 2025. Understanding how these changes may impact your practice or ambulatory surgery center (ASC) is essential. This blog will highlight key changes for the calendar year 2025 to help you prepare for adjustments to your operational, clinical or billing workflows.

The Physician Fee Schedule conversion factor reduced in 2025

For practices that rely on revenue tied to Medicare reimbursements, staying informed about the CMS’s Calendar Year (CY) 2025 Physician Fee Schedule and the conversion factor used to determine reimbursements is essential. Changes to this conversion factor can significantly impact your practice’s financial health and its ability to deliver quality care. According to the American Medical Association (AMA), from 2001 to 2023, Medicare pay for doctors dropped by 26 percent when adjusted for inflation in the costs of running a practice. For 2025, there has been a 2.83% reduction in the Medicare Physician Fee Schedule (PFS) conversion factor, which decreased to $32.35 from $33.29 in 2024.

Do you want to know current Medicare reimbursement rates for more than 10,000 physician services? Search the Medicare PFS Look-Up tool.

Waivers for Medicare telehealth granted another reprieve

Before the COVID-19 pandemic, stringent place of service (POS) rules permitted Medicare coverage for telehealth visits only to patients in designated facilities or specific regions, such as rural and health professional shortage areas. When it became a vital way to access vulnerable patients during the public health emergency (PHE) of 2020, providers were temporarily allowed to bill Medicare for services delivered via telehealth to patients in their homes. Initially extended through December 31, 2024, these temporary POS waivers received another reprieve from Congress in December, extending access to telehealth services for Medicare patients through March 31, 2025.

If Congress doesn’t take further action by the end of March 2025, many services provided via telehealth will no longer be eligible for reimbursement. However, prior acts of Congress have already removed geographic and site restrictions for telehealth services for mental health and substance use disorders, so those services will likely continue to be reimbursed by Medicare. 

“We have worked through all of these last-minute updates, tested and retested them so that our software is functioning appropriately,” says Ronda Tews, Senior Director of Billing and Coding Compliance.

It’s worth noting that despite the current reprieve by Congress, for Medicare telehealth reimbursement, CMS will only recognize one of the 17 new telemedicine CPT codes (98000-98016) that the AMA introduced in 2025. CMS will recognize code 98016, which replaces the previous HCPCS code G2012. If your practice cares for a diverse base of patients covered by Medicare and private payers, you will want to understand the implications of these various telehealth codes. Private payers and possibly Medicare Advantage plans, may begin to use the new, more precise telemedicine CPT codes, even if Medicare does not.

Learn how our Practice Management software can help your practice streamline billing and coding even in the face of 11th-hour regulatory changes and how our EHR, EMA®, can assist with code suggestions based on your documentation.

Why it’s important to stay current about Medicare reimbursement changes

“In the evolving landscape of healthcare billing and coding, the timely processing of medical claims is critical,” warns ModMed’s Senior Director of Billing and Coding Compliance Ronda Tews. Failing to do so could lead to significant challenges with claims submissions, especially when the date of service falls before changes in coding structures. Such delays may complicate processing and increase the likelihood of improper coding, resulting in claim rejections and potentially delaying or denying payment for your practice.

Overall, healthcare billing and coding challenges are multifaceted and require ongoing monitoring. As the healthcare industry evolves, providers must remain vigilant in ensuring compliance with regulations while effectively navigating the complexities of coding and billing practices. By addressing these challenges proactively, healthcare providers can help safeguard their revenue streams and enhance patient education regarding available services and coverage.

Additional codes to keep an eye on in 2025

In 2025, CMS introduced new codes and guidelines for training provided to caregivers. These new provisions for caregiver training cover important topics like preventing bedsores, caring for wounds and controlling infections. CMS also rolled out new reimbursement codes related to training caregivers in behavior management and modification for specific patients, and it allowed caregiver training to be done through telehealth services.

For CY 2025, CMS finalized a rule change that physical, occupational and speech-language therapists do not need a physician’s signature on a treatment plan if they have documentation on file of a written order or referral from the physician and evidence that the treatment plan was transmitted to the physician within 30 days of the initial evaluation.

Another notable update is that Medicare will now allow doctors to use the E/M visit complexity add-on code G2211 on the same day as annual wellness visits and other preventive services covered by Medicare Part B. This change allows doctors to better show the complexity and level of care they provide, which may include reviewing the patient’s medical history, discussing current health issues and suggesting additional preventive care. This flexibility may improve patients’ access to coordinated healthcare while helping doctors get paid fairly for the complexities of their services.

How all-in-one software can help your practice keep up with billing codes

The AMA publishes codes, including ICD-10 codes for diagnoses, CPT codes for professional services, and HCPCS codes for other items like medication and durable medical equipment (DME) year-round. With frequent changes, it can be challenging for practices to keep up with CMS reimbursement rates and coding guidelines. Integrated software, like ModMed’s all-in-one platform, can help providers better manage patient data, customize workflows and process billing for Medicare and other payers so that staying current is less time-consuming for physicians and billing staff.

One significant advantage of our specialty-specific EHR platforms, EMA and gGastro®, is that ModMed regularly updates codes, including modifiers, behind the scenes. Our built-in coding suggestions are periodically updated with new coding releases — quarterly for HCPCS codes for drugs, supplies and durable medical equipment, annually in October for ICD-10 codes and annually on January 1 for CPT codes.

Explore additional medical resources to help you prepare for 2025.

This blog is intended for informational purposes only and does not constitute legal, compliance or medical advice. The rules and information discussed in this blog are subject to change, and ModMed does not make any representations or guarantees regarding accuracy. Please consult with your legal counsel and other qualified advisers to ensure compliance with applicable laws, regulations and standards.