What the 2025 CMS Physician Fee Schedule Changes Mean for Primary Care
tl;dr: Welcome updates to APCM codes, better value-based care incentives, expanded caregiver/prEP services, Shared Savings improvements, telehealth flexibilities for some, FQHC/RHC updates. However, 2.83% PFS cut and reinstatement of telehealth restrictions add additional financial strain for practices.
On November 1, 2024, the Centers for Medicare & Medicaid Services (CMS) finalized the 2025 Physician Fee Schedule (PFS), marking another chapter in the ongoing recalibration of how Medicare values and compensates primary care. While these changes are couched in broader goals of equity, access, and affordability, they underscore a persistent truth: primary care remains undervalued in a system often tilted toward procedural medicine.
For primary care physicians, the updates are a double-edged sword. On one hand, there’s potential for streamlined care management and expanded value-based care revenue opportunities. On the other, a declining PFS conversion factor signals ongoing financial strain for practices already grappling with thin margins. These changes demand that primary care leaders both adapt to and advocate for payment models that reflect primary care physicians’ foundational role in improving health outcomes and controlling costs.
Here, we’ll dissect the 2025 updates and what they mean for the future of primary care—from financial viability and care delivery innovations to the evolving expectations of value-based participation.
At a glance…
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The PFS conversion factor falls to $32.35, a 2.83% payment reduction, exacerbating financial pressures unless Congress intervenes with a proposed 1.9% increase.
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New three-level coding for Advanced Primary Care Management (APCM) services simplifies documentation and aligns with Medicare initiatives, replacing older care management codes.
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Pre-COVID restrictions on telehealth return, threatening access (particularly in health professional shortage areas) unless legislative action extends waivers. Behavioral telehealth is a notable exception, maintaining home-based flexibility.
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New payment models for caregiver training, PrEP coverage, and enhancements to the Shared Savings Program aim to address equity gaps in rural and underserved communities.
Physician Fee Schedule (PFS)
The CMS has finalized the 2025 Physician Fee Schedule (PFS) conversion factor at $32.35, marking a $0.94 (2.83%) decrease from the 2024 rate of $33.29. This reduction results from several factors, including the expiration of a 2.93% temporary payment increase applied for 2024, a mandated 0% update for 2025, and a minor budget neutrality adjustment to account for revaluations of specific services. While these adjustments may seem incremental, the impact on primary care practices is profound, particularly given their traditionally slim operating margins.
The reduced conversion factor directly translates into lower reimbursement rates for primary care services, posing significant financial challenges. For example, a primary care practice generating $500,000 annually could face a revenue decline of approximately $14,650 due to the 2.93% reduction. While this percentage might seem small, the financial impact is substantial for practices operating with slim margins where every dollar counts. As a result, practices may need to make difficult decisions, such as reducing staff or curtailing certain services, to manage these constraints. These adjustments threaten the stability of practices and risk diminishing access to essential care, particularly for vulnerable populations heavily reliant on Medicare.
The broader implications for patient care are equally concerning. Financial strain on primary care practices could exacerbate existing barriers to access, particularly in rural and underserved areas where resources are already limited. Independent practices, which often operate on razor-thin margins, may be forced to make difficult decisions such as ceasing to see Medicare patients, reducing staff, or even closing their doors entirely. These outcomes would significantly reduce access to primary care in areas that already face provider shortages. The loss of these practices undermines preventative care efforts, disrupts continuity of care, and threatens the overall health outcomes of Medicare beneficiaries, particularly those who rely heavily on primary care for chronic disease management and routine health maintenance.
Efforts to address the impending reduction include the Medicare Patient Access and Practice Stabilization Act, introduced in Congress in October 2024. This legislation proposes an approximate 1.9% increase in the 2025 conversion factor, which could offset some of the anticipated cuts. However, the bill’s passage and efficacy remain uncertain, leaving practices and policymakers in a state of limbo. Without definitive action, the strain on primary care practices is likely to grow, with cascading effects on the healthcare system.
Advanced Primary Care Management (APCM) Services
The CMS has also introduced Advanced Primary Care Management (APCM) services in the 2025 Medicare Physician Fee Schedule. By bundling existing care management and technology-based services, such as Principal Care Management, Transitional Care Management, and Chronic Care Management, APCM aims to strengthen primary care and improve health outcomes for Medicare beneficiaries.
These new HCPCS codes streamline reimbursement by replacing traditional time-based care management requirements with monthly billing for each beneficiary, allowing practices to focus more on delivering care rather than administrative tasks.
APCM services are billed using three new tiered HCPCS G-codes:
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G0556 - Level 1 for patients with one chronic condition
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G0557 - Level 2 for those with two or more chronic conditions
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G0558 - Level 3 for patients with two or more chronic conditions who also qualify as Medicare beneficiaries.
This structure acknowledges the varying levels of complexity in managing patients with chronic conditions, offering differentiated payment that better reflects the intensity of care required. Keep in mind that, in addition to eliminating time-based documentation, APCM introduces requirements for billing, including patient consent, an initiating visit, 24/7 care access, care coordination, population health management, and performance measurement.
Practices engaged in value-based care programs such as Medicare Shared Savings Program ACOs, REACH ACOs, or Primary Care First can meet many APCM requirements through existing program participation, aligning APCM with broader value-based care strategies. This reduces duplicative reporting, encourages value-based care adoption, and reinforces CMS’s commitment to comprehensive, coordinated care. These features make APCM a more streamlined, accessible payment model for practices aiming to deliver high-quality care.
However, the program is not without challenges. Some stakeholders have expressed concerns about the adequacy of APCM code valuations, suggesting they may not fully compensate practices for the services provided. CMS has acknowledged these concerns and may revisit valuations in future updates. Additionally, APCM services are subject to beneficiary cost-sharing, which could place financial strain on low-income patients. This cost-sharing may inadvertently create barriers to accessing the very care the program is designed to enhance.
This focus on simplified reimbursement, reduced administrative burden, and alignment with existing care models positions it as a promising development for primary care practices. Nevertheless, ongoing assessment and adjustments will be critical to addressing valuation concerns and mitigating cost-sharing impacts to ensure the program achieves its intended goals of improving care quality and strengthening primary care systems.
Telehealth Restrictions Return
The 2025 Medicare Physician Fee Schedule introduces significant changes to telehealth coverage and reimbursement, with both permanent expansions as well as the reinstatement of pre-COVID-19 restrictions.
CMS has taken steps to retain some telehealth flexibilities to align with the growing importance of remote care delivery. New additions to the Medicare Telehealth Services List include caregiver training and PrEP counseling, creating opportunities for expanded service offerings. CMS has also made virtual direct supervision permanent for certain services, allowing providers to use real-time audio-video technology for compliance with direct supervision requirements. Teaching physicians can continue to virtually supervise residents through the end of 2025, maintaining flexibility in educational settings. Additionally, practices offering audio-only telehealth services benefit from new allowances that recognize patient barriers to video technology. Practitioners providing telehealth from their homes may continue using their enrolled practice location for billing purposes, further simplifying operational logistics.
Despite these advancements, the expiration of temporary telehealth flexibilities at the end of 2024 reintroduces pre-pandemic restrictions. Geographic and originating site requirements will once again limit telehealth services to patients in rural medical facilities, and the pool of eligible practitioners will shrink. Exceptions for behavioral health telehealth services, which may still be delivered in patients’ homes, provide a small but meaningful continuity for a vital area of care.
These changes create a mixed outlook for primary care practices. On one hand, expanded reimbursement for new telehealth services and streamlined supervision rules offer opportunities to generate revenue and optimize workflows. On the other hand, reinstated restrictions threaten to disrupt care continuity for patients who have relied on telehealth services during the pandemic, particularly those in rural areas or with limited mobility.
Many telehealth-only primary care platforms, including those powered by Elation Health, have evolved significantly since the pandemic, offering comprehensive virtual care options. These platforms will face unique challenges under the reinstated restrictions. The geographic and originating site requirements, which limit telehealth to specific rural facilities, could curtail the reach of these services, especially for patients accustomed to accessing care from their homes. For Elation’s telehealth-focused customers, navigating these limitations will require creative strategies to maintain patient engagement, manage operational impacts, and advocate for policies that support equitable access. Practices must anticipate reduced access for many beneficiaries and prepare for potential impacts on patient satisfaction and revenue.
To adapt, primary care practices should proactively assess how these changes affect their operations. Evaluating patient demographics and service utilization can help identify vulnerabilities arising from reinstated restrictions. Practices can also focus on maximizing reimbursement by leveraging services that remain eligible for telehealth, ensuring these offerings are promoted and utilized effectively. Advocacy remains critical, as continued engagement with policymakers could influence the adoption of permanent telehealth flexibilities that expand access equitably for all Medicare beneficiaries.
Complete List of Updates
Category |
Update |
Description |
Specialties Affected |
Medicare Payments |
CY 2025 Medicare Physician Fee Schedule Final Rule |
Finalizes updates to Medicare payment policies under the PFS effective January 1, 2025, focusing on equity, affordability, accessibility, and innovation in healthcare services. |
All specialties billing under Medicare Part B |
Advanced Primary Care Management Services (APCM) |
Establishes coding and payments for APCM services bundled by complexity levels to enhance primary care delivery and reduce administrative burden. |
Primary Care, Chronic Disease Management |
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Strategies for Improving Global Surgery Payment Accuracy |
Broadens use of transfer-of-care modifiers and introduces add-on codes for post-operative care to improve payment accuracy for 90-day global packages. |
Surgeons, Post-Operative Care Providers |
|
Payment for Radiopharmaceuticals in the Physician Office Setting |
Clarifies methodologies for determining payment limits for radiopharmaceuticals in non-hospital settings. |
Radiology, Oncology |
|
Drugs and Biological Products Paid Under Medicare Part B |
Updates drug payment policies, including handling negative/zero ASP data and refunds for single-dose containers. |
Pharmacy, Oncology, Rheumatology |
|
Medicare Prescription Drug Inflation Rebate Program |
Codifies inflation rebate policies for Part B and D drugs, addressing overpricing with penalties and refining rebate calculations. |
Pharmacy, Drug Manufacturers |
|
Electronic Prescribing for Controlled Substances (EPCS) Compliance |
Extends compliance deadline to January 1, 2028, for LTC facilities, enhancing communication standards and prescriber workflow. |
LTC Facilities, Pharmacists |
|
Caregiver Services |
Caregiver Training Services (CTS) |
Introduces new codes and payments for caregiver training in direct care and behavior management, including telehealth provision. |
General Practitioners, Caregiver Training Providers |
Social Determinants of Health |
Services Addressing Health-Related Social Needs |
Finalizes new policies and solicits feedback for CHI, PIN services, and SDOH Risk Assessments to improve utilization, especially in rural areas. |
Community Health, Social Work, Public Health |
Telehealth |
Telehealth Services under the PFS |
Adds services to the Medicare Telehealth Services List, extends flexibility for audio-only services, and defines permanent virtual supervision. |
Telehealth Providers, Behavioral Health, General Practice |
Telecommunication Services in RHCs and FQHCs |
Extends telehealth flexibilities and clarifies supervision policies for telecommunication technology in RHCs and FQHCs through December 2025. |
RHCs, FQHCs, Telehealth Providers |
|
Behavioral Health |
Behavioral Health Services |
Introduces payments for suicide prevention safety planning and digital mental health devices, and seeks feedback on IOP coding and payment. |
Mental Health Professionals, Behavioral Health Clinics |
Intensive Outpatient Program Services (IOP) in RHCs and FQHCs |
Aligns payment rates for IOP services and introduces payment for four or more services per day in RHCs and FQHCs. |
Mental Health, Behavioral Health Clinics |
|
Primary Care |
Advanced Primary Care Management Services (APCM) |
Establishes coding and payments for APCM services bundled by complexity levels to enhance primary care delivery and reduce administrative burden. |
Primary Care, Chronic Disease Management |
Opioid Use Disorder |
Opioid Treatment Programs (OTPs) |
Finalizes telecommunication flexibilities for OUD services, updates payments for SDOH risk assessments, and introduces codes for coordinated care and harm reduction services. |
Addiction Specialists, OTP Providers |
Therapy |
Supervision Policy for PTs and OTs in Private Practice |
Allows general supervision for PTAs/OTAs in private practice and eases certification requirements for therapy plans, reducing administrative burdens. |
Physical and Occupational Therapists |
Certification of Therapy Plans of Treatment with a Physician or NPP Order |
Eases administrative burdens by modifying certification requirements for therapy treatment plans in specific cases. |
Physical, Occupational, and Speech Therapists |
|
Dental and Dialysis |
Dental and Oral Health Services |
Expands dental coverage linked to dialysis, introduces claim submission requirements, and seeks feedback on links to diabetes and autoimmune conditions. |
Dentists, Nephrologists |
Preventive Care |
Expand Colorectal Cancer Screening |
Removes outdated methods and adds CTC and blood-based biomarkers for CRC screening, reducing patient cost-sharing and improving access in underserved areas. |
Oncology, Gastroenterology |
Medicare Part B Payment for Preventive Services |
Expands hepatitis B vaccine coverage and simplifies administration requirements for RHCs and FQHCs, improving timeliness and accessibility. |
Preventive Care, RHCs, FQHCs |