The Centers for Medicare & Medicaid Services (CMS) has released the calendar year (CY) 2025 Revisions to Payment Policies Under the Physician Fee Schedule (MPFS) and Other Revisions to Medicare Part B (CMS-1807-P) Proposed Rule. This includes proposals related to Medicare physician payment and the Quality Payment Program (QPP). Notably, CMS aims to make permanent some telehealth flexibilities introduced during the COVID-19 pandemic. The agency also recognizes the importance of addressing health-related social needs and is requesting information on recently implemented service categories. The rule introduces changes to the valuation of Chimeric Antigen Receptor T-cell (CAR-T) therapy and Human Immunodeficiency Virus (HIV) Preexposure Prophylaxis (PrEP) services. Additionally, CMS has proposed excluding 340B units from Part D inflation rebates and is exploring the concept of a Medicare Part D claims repository to support this exclusion in future years.
The Proposed Rule is open for a 60-day comment period, closing on Sept. 9, 2024. The Final Rule with comment is expected to be issued on or before Nov. 1, 2024.
To learn more about the Medicare Physician Fee Schedule Proposed Rule, review the following resources:
To access specific content in this Holland & Knight alert, use the following links:
Key Proposals of Note
Notable proposals made by CMS in the rule include:
- addition of a new Hospital Inpatient or Observation (I/O) Evaluation and Management (E/M) add-on for Infectious Diseases
- expanding the definition of "Telecommunications System" to include audio-only services
- relaxing direct supervision requirements for certain provider types and services
- expanding the usability of the add-on code for complexity, G2211, by allowing it to be billed when the underlying E/M service is performed on the same day as an annual wellness visit, vaccine administration or any Medicare Part B preventive service furnished in the office or outpatient setting
- codifying policies established in the revised guidance for the Medicare Part B Drug Inflation Rebate Program and Medicare Part D Drug Inflation Rebate Program
- establishing an APP+ quality measure set
- maintaining the performance threshold at 75 points for the CY 2025 performance period
- maintaining the data completeness threshold at 75 percent through the 2028 performance period
- adding six new Merit Based Incentive Payment System (MIPS) Value Pathways (MVPs) related to ophthalmology, dermatology, gastroenterology, pulmonology, urology and surgical care
- modifying currently finalized MVPs, including the consolidation of two neurology-focused MVPs into a single neurological MVP
Conversion Factor and Specialty Impacts
CMS proposes an MPFS conversion factor (CF) of $32.36 for CY 2025, reflecting a 93-cent (or 2.8 percent) decrease from the current CF of $33.29. This conversion factor accounts for the statutorily required zero percent overall update for CY 2025, which incorporates expiration of the 2.93 percent increase in payment for CY 2024 required by statute and a small estimated 0.05 percent adjustment necessary to account for changes in work relative value units (RVUs) for some services. Table 128 in the Proposed Rule shows the impact by specialty, which varies based on several factors. Notably, the table does not reflect the statutory fix, which expires on Dec. 31, 2024. Thus, the actual impact on specialties would be approximately 2.93 percent lower than what is shown in Table 128. Ultimately, the rule outlines the limitations of the current fee schedule structure. And though Congress has provided temporary partial fixes to physician payment in the last several years, the relief expires at the end of 2024 unless legislation is passed.
Determination of Practice Expense RVUs
CMS did not receive new wage data or other information for use in clinical labor pricing prior to the CY 2025 Proposed Rule and, thus, proposes that CY 2025 clinical labor pricing be based upon CY 2024 pricing finalized in the CY 2024 final rule. However, CMS has incorporated utilization data for two new specialties: Marriage and Family Therapist (MFT) and Mental Health Counselor (MHC). CMS is not proposing to use the 2017-based Medicare Economic Index (MEI) for PFS rate setting in CY 2025.
Add-On Codes
In the CY 2024 PFS final rule, CMS finalized the change in status for Healthcare Common Procedure Coding System (HCPCS) code G2211, or the other outpatient (O/O) E/M visit complexity add-on code, to make it separately payable by assigning an "active" status indicator. This add-on code is billed in addition to the standard codes for office and O/O E/M visits and provides extra payment meant to capture the effort required by clinicians to build a longitudinal relationship with patients. Payment of G2211 was not allowed when reported with the payment modifier "-25," which indicates an independently billable E/M service provided by the same practitioner on the same day as a procedure or other service. Many practitioners expressed to CMS that this prevents the add-on code from being billed for an E/M visit taking place on the same day as a preventive immunization, annual wellness visit (AWV) or other Medicare preventive service. In response to these concerns, CMS proposes to allow payment of G2211 when the O/O E/M base code is reported on the same day and by the same practitioner as any Part B preventative service furnished in the office or outpatient setting beginning CY 2025.
Additionally, CMS proposes to create a new Hospital Inpatient or Observation (I/O) Evaluation and Management (E/M) add-on for Infectious Diseases (HCPCS code GIDXX). The code would describe intensity and complexity inherent to hospital inpatient or observation care associated with a confirmed or suspected infectious disease performed by a physician with specialized training in infectious diseases and would be valued at a work RVU of 0.89. CMS believes that there will be an analogous relationship between G2211 and its common base code of 99213 with the proposed GIDXX and 99223. GIDXX could be billed based on visit level or initial, same-day discharge, or subsequent hospital inpatient or observation codes. Additionally, the code would be separately reportable to 99221-99223 and 99231-99236.
Digital Mental Health Treatment: Introduction of Digital Therapeutics Codes
The CMS is proposing Medicare payments to billing practitioners for digital mental health treatment (DMHT) devices that are essential to professional behavioral health services and used in conjunction with ongoing treatment under a behavioral health treatment plan. CMS is planning to introduce three new HCPCS codes for DMHT devices, inspired by coding for remote therapeutic monitoring (RTM) services. Starting in CY 2025, physicians and practitioners authorized to provide mental illness diagnosis and treatment can bill using a new HCPCS code:
- GMBT1. Supply of digital mental health treatment device and initial education and onboarding, per course of treatment that augments a behavioral therapy plan.
CMS also is proposing two additional new codes:
- GMBT2. First 20 minutes of monthly treatment management services related to the therapeutic use of the DMHT device, including data review from patient observations and specific inputs, requiring at least one interactive communication with the patient/caregiver each month.
- GMBT3. Each additional 20 minutes of monthly treatment management services.
CMS is also seeking comments on whether physicians should receive reimbursements for devices not yet approved by the U.S. Food and Drug Administration (FDA) for mental health treatment, but approved for other uses, and on potential limits on reimbursable devices per month per patient.
Extended Telehealth Flexibilities, Including Frequency Limitation Suspensions and Audio-Only Communication Options
CMS is proposing several policy changes that impact coding and payment for the virtual elements of care delivery. Notably, CMS continues to maintain its lack of statutory authority to extend COVID-19 telehealth waivers. Without congressional action, the major Medicare telehealth waivers will expire on Dec. 31, 2024, and return to pre-COVID-19 public health emergency (PHE) policies.
Requests to Add Services to the Medicare Telehealth Services List for CY 2025
In the CY 2024 Physician Fee Schedule Final Rule, CMS changed the process for making additions, deletions and changes to the Medicare Telehealth Services List, replacing the old categorization with a new five-step process (beginning in CY 2025). As part of this change, each telehealth service is assigned either a "permanent" or "provisional" status. A telehealth service receives "provisional" status if there is not enough evidence to demonstrate the clinical benefit of the service but enough evidence that further study may demonstrate such benefit.
CMS has received several requests to permanently add various services to the Medicare Telehealth Services List effective CY 2025. The requested services are listed in Table 7 of the proposed rule, and the services CMS is proposing to add to the Medicare Telehealth Services List are listed in Table 8. CMS is not making final decisions on recategorizing provisional codes until a comprehensive analysis can be completed.
CMS Discussion on Select Requests
- Continuous Glucose Monitoring (Current Procedural Terminology (CPT) code 95251). This is not proposed to be added, as it does not meet the criteria for face-to-face services.
- Cardiovascular and Pulmonary Rehabilitation (CPT codes 93797, 93798; 94625, 94626). These codes will remain provisional for CY 2025 pending comprehensive review.
- Psychological and Developmental Testing (CPT codes 96112, 96113, 96130, 96136, 96137). CMS is not proposing any changes to these codes' status.
- General Behavioral Health Integration (CPT code 99484) and Principal Care Management (CPT codes 99424-99427). These are not considered telehealth services and will not be added to the telehealth list.
- Radiation Treatment Management (CPT code 77427). This is proposed to be removed due to safety concerns.
- Home International Normalized Ratio (INR) Monitoring (HCPCS code G0248). This is proposed for provisional addition to the telehealth list.
- Caregiver Training (HCPCS code 97550). This is proposed for provisional addition to allow for further evidence development.
- PrEP of HIV. This is proposed for permanent addition, pending finalization of the National Coverage Determination (NCD).
Direct Supervision Extension and Permanent Definition
During the PHE, CMS amended the definition of "direct supervision" to permit a supervising physician/practitioner to be considered "immediately available" through virtual presence using two-way, real-time audio/visual technology for certain services. CMS originally extended this definition through Dec. 31, 2024, and, in the Proposed Rule, this definition would be extended through Dec. 31, 2025. Although CMS notes that it remains concerned about situations in which complications arise and the true availability for a supervising physician/practitioner to intervene, CMS recognizes the importance of maintaining this flexibility, which increases patient access to care.
CMS also proposes to permanently define "direct supervision" that allows "immediate availability" of the supervising physician/practitioner using audio/video real-time communications technology for a subset of incident-to services, which it views as lower risk given that these services are typically performed in their entirety by auxiliary personnel. These services include 1) services furnished incident-to a physician or other practitioner's service when provided by auxiliary personnel employed by the billing practitioner and working under direct supervision and for which the underlying HCPCS code has been assigned a professional component and technical component indicator of "5," and 2) services described by CPT code 99211. For all other services required to be furnished under direct supervision, CMS proposes to continue to define "immediate availability" to include real-time audio and visual interactive telecommunications technology only through Dec. 31, 2025.
Teaching Physician Billing for Services Involving Residents with Virtual Presence
CMS proposes continuing the current policy that allows teaching physicians to virtually supervise services involving residents in all teaching settings, applicable through Dec. 31, 2025, for telehealth services.
Definition of "Telecommunications System"
In response to the PHE, CMS allowed the use of audio-only communications technology to furnish audio-only telephone evaluation and management services, behavioral health counseling and educational services. CMS is now proposing to revise the definition of "interactive telecommunications system" to include two-way, real-time audio-only communication technology for any telehealth service furnished to a beneficiary in their home if the distant site physician or practitioner is technically capable of using an interactive telecommunications system (multimedia communications equipment that includes audio and video equipment permitting two-way, real-time interactive communication), but the patient is not capable of, or does not consent to, the use of video technology. In this proposal, CMS recognizes that broadband access varies for patients and that not all patients want to engage with a practitioner in their home using interactive audio and video.
Frequency Limitations
CMS proposes to remove the frequency limitations for Critical Care Consultation Services HCPCS codes G0508 (requires telehealth consultation, critical care, initial visit; physicians typically spend 60 minutes communicating with the patient and providers via telehealth) and G0509 (telehealth consultation, critical care, subsequent; physicians typically spend 50 minutes communicating with the patient and providers via telehealth) for CY 2025. Additionally, CMS proposes to delay implementation of the telehealth frequency limitations for subsequent nursing facility and inpatient hospital visits for an additional year to include two-way, real-time audio-only communication technology for any telehealth service furnished to a beneficiary in their home and to continue to permit the distant site practitioner to use their currently enrolled practice location instead of their home address when providing telehealth services from their home.
Distant/Originating Site Requirements
CMS noted expiration of certain Medicare telehealth flexibilities related to the COVID-19 PHE, including the removal of statutory geographic and location limitations of most Medicare telehealth services. However, CMS asserts that the beneficiary's home continues to be a permissible originating site for certain types of services, including those furnished for the diagnosis, evaluation or treatment of a mental health disorder, including a Substance Use Disorder (SUD), and for monthly clinical assessments related to End-Stage Renal Disease (ESRD) described in Section 1881(b)(3)(B). Additionally, CMS asserts that the expiration of certain flexibilities for Medicare telehealth services is not expected to impact broader utilization of these services because reasonable and necessary services for the diagnosis or treatment of an illness or injury continue to be covered.
Medicare Telehealth Originating Site Facility Fee
The Medicare telehealth originating site facility fee for telehealth services furnished from Oct. 1, 2001, through Dec. 31, 2002, at $20 specifies that for telehealth services furnished on or after Jan. 1 of each subsequent calendar year, the telehealth originating site facility fee is increased by the percentage increase in the MEI. The proposed MEI increase for CY 2025 is 3.6 percent and is based on the expected historical percentage increase of the 2017-based MEI. For CY 2025, CMS proposes to update the MEI to $31.04 based on historical data through the second quarter of 2024.
Potentially Misvalued Codes
CMS received five public nominations for misvalued codes/code sets. These include:
- osteotomy of spine code set (CPT codes 22210, 22212, 22214, 22216)
- CMS concurred, recommends RUC reevaluation
- arthrodesis of the sacroiliac joint code (CPT code 27279)
- CMS does not concur, seeks comments and additional studies
- sleep study code (CPT code 95800)
- CMS does not concur, seeks comments
- fine needle aspiration biopsy code set (CPT codes 10021, 10004, 10005, 10006)
- tympanostomy codes
- CMS is seeking comment on potentially establishing additional coding and payment for these services
CAR-T Therapy and PrEP Services
The CPT Editorial Panel has introduced four new codes (3X018 to 3X021) for CAR-T therapy services, replacing four previously deleted Category III codes. CMS is proposing to adopt these RVU Update Committee-recommended work RVUs for all four codes. For CPT code 3X021, CMS is proposing to adopt the RVS Update Committee (RUC)-recommended direct practice expense inputs. This proposal aims to accurately value the physician work and practice expenses associated with the various steps of CAR-T therapy, reflecting the complexity and resource requirements of this advanced treatment modality.
In 2023, CMS released a Proposed National Coverage Determination (NCD) for PrEP for HIV prevention. This proposal aims to cover and pay for PrEP drugs under the additional preventive services authority. A final decision on this NCD is still pending.
For CY 2025, CMS is proposing national rates for several HCPCS codes related to PrEP services, reflecting the costs associated with counseling and drug administration. CMS is seeking feedback from stakeholders on the accuracy of these proposed valuations to establish appropriate reimbursement rates for PrEP-related services and specialized drug administration.
Skin Substitutes
In the CY 2023 PFS proposed rule, CMS outlined several objectives related to refining skin substitute policies under Medicare, including: 1) ensuring a consistent payment approach for skin substitute products across the physician office and hospital outpatient department settings, 2) ensuring that appropriate HCPCS codes describe skin substitute products, 3) using a uniform benefit category across products within the physician office setting, regardless of whether the product is synthetic or comprises human or animal-based material, to incorporate more consistent payment methodologies, and 4) maintaining clarity for interested parties on CMS skin substitutes policies and procedures. In the CY 2023 Final Rule, CMS solicited comments on different approaches CMS could use to identify appropriate practice expense (PE) direct costs for skin substitute products such as reviewing various sources for price information, including performing market research and reviewing invoices submitted by interested parties or cost information on Medicare claims.
CMS is proposing that billing and payment codes that describe products currently referred to as skin substitutes would not be counted for purposes of identifying refundable drugs for calendar quarters in 2025. CMS plans to revisit discarded drug refund obligations for skin substitutes in future rulemaking.
Additionally, CMS is proposing to establish national pricing for HCPCS code G0465 (autologous platelet-rich plasma) for CY 2025, valued at $1.50 based upon the direct PE inputs included with CPT code 15271, with the additional inclusion of the 3C patch system (SD343) supply, priced in CY 2023. CMS specifies that payment includes debridement, which may involve a wound reaching the bone. Therefore, debridement may not be billed separately. In addition, CMS is seeking comments on other available crosswalks from interested parties.
Drugs and Biological Products Paid Under Medicare Part B
Mandated Manufacturer Refunds for Discarded Amounts of Refundable Drugs
CMS continues to provide operational updates on this policy. Products approved by the FDA after Nov. 15, 2021, are excluded from rebate susceptibility for 18 months from the first Part B sale. CMS proposes clarifying that for products in which the date of CMS-reported first sale does not appropriately identify the first date of payment under Part B due to an NCD, CMS will instead use the actual date on which the drug is first paid under Part B. The rule also proposes to revise the term "single-dose containers" in defining a product that is eligible for this policy. CMS proposes to include products packaged in single-dose or single-use packages, injectable drugs with labeled volume less than or equal to 2 mL, and for drugs contained in ampules with no discard statement in the definition.
CMS is also proposing to explicitly require the use of the JW modifier if a drug is discarded during the preparation process in addition to the administration process. If no amount is discarded during preparation, the JZ modifier would be required on the claim. CMS is seeking comments on this proposal.
Finally, CMS notes that one application for an increased applicable percentage was submitted for CY 2025. Based on the data submitted, CMS did not propose applying an increased applicable percentage to this product.
Payment Limit Calculation When Manufacturers Report Negative or Zero Average Sales
CMS proposes specifying that negative or zero average sales price data will be classified as "not available" when calculating the payment limit and provides scenarios for products in which this may be the case.
Payment of Radiopharmaceuticals in Physician Offices
CMS proposes codifying in Section 414.904(e)(6) that for radiopharmaceuticals furnished outside hospital outpatient departments, Medicare Administrative Contractors (MACs) should determine payment limits based on methodologies in place before November 2003.
Immunosuppressive Therapy
CMS proposes modifying regulations to include orally or enterally administered compounded formulations of FDA-approved drugs with approved immunosuppressive indications, or those deemed reasonable and necessary by a MAC for specific immunosuppressive treatments.
Blood Clotting Factors
CMS notes that gene therapies have recently been FDA-approved for hemophilia treatment. CMS proposes updating regulatory text to clarify that blood clotting factors must be self-administered to qualify for the furnishing fee under existing CMS policy.
Medicare Shared Savings Program (MSSP)
Prepaid Shared Savings
CMS is proposing to establish a new prepaid shared savings option for qualifying Accountable Care Organizations (ACOs), which include those participating in Levels C to E of the BASIC track or the ENHANCED track with consistent demonstration of shared savings. At least 50 percent of the earned shared savings would be required to be spent on direct beneficiary services that have a reasonable expectation of improving or maintaining the health or overall functioning of the beneficiary. Additionally, up to 50 percent can be spent on staffing and infrastructure costs. Applications would be accepted during the annual application cycle, with expectations of a Jan. 1, 2026, start date.
Health Equity Benchmark Adjustment
Beginning Jan. 1, 2025, CMS proposes to adjust an ACO's historical benchmark using the Health Equity Benchmark Adjustment (HEBA), based upon the proportion of assigned beneficiaries enrolled in Part D LIS or dual-eligibility in Medicare and Medicaid. The adjustment would be based on the highest of three values: HEBA, a positive regional adjustment or the prior savings adjustment.
APP+
The APP+ quality measure set is proposed to align with the Universal Foundation measure set. As proposed, beginning in performance year 2025, CMS would require MSSP ACOs to report on this measure set. The APP quality measure set would neglect to be an available reporting option. In the time-scaled proposal, the measure set would grow to include 11 measures, including five newly proposed measures and six previously utilized measures. MIPS Clinical Quality Measures (CQMs) would not be an available measure type. CMS expressed its intent to use Medicare CQMs as a transition step to adopt digital quality measurement. The MSSP electronic CQM (eCQM) incentive would be extended for an unspecified number of years but would apply only to APP+ participants that report all eCQMs in the newly proposed measure set and meet all data completeness requirements for those eCQMs.
CMS proposed to adjust the definition of "primary care services" under MSSP. Additions to the definition include Safety Planning Interventions, Post-Discharge Telephonic Follow-up, Virtual Check-in, Advanced Primary Care Management Services, Cardiovascular Risk Assessment, and Management, Interprofessional Consultation, Direct Caregiver Training and Individual Behavior Management Caregiver Training.
Medicare Part B Payment for Preventive Vaccine Administration Services
CMS proposes allow RHCs and FQHCs to bill or Part B preventive vaccines and the administration at the time of service. Furthermore, CMS proposes that payments for these claims will be made according to Part B preventive vaccine payment rates in other settings, to be annually reconciled with the facilities' actual vaccine costs on their cost reports. In acknowledgment of necessary operational changes necessary, CMS proposes that Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) begin billing for preventive vaccines and their administration at the time of service, for dates of service on or after July 1, 2025.
Updates to the Quality Payment Program (QPP)
CMS proposes no changes to the performance threshold, which will be set at 75 points for the 2025 performance year. The threshold allows MIPS-eligible clinicians to receive bonus payments or penalties based on scoring above or below the threshold. Finally, CMS proposes to hold 75 percent data completeness through the 2028 performance year for eCQMs, MIPS CQMs, Medicare CQMs, Medicare Part B claims measures and Qualified Clinical Data Registry measures.
MIPS and MVPs
Program Enhancements. CMS proposes updates to drive improvement in clinicians' performance and healthcare quality through payment policy. Six new MVPs are proposed for ophthalmology, dermatology, gastroenterology, urology, pulmonology and surgical care.
Advanced Primary Care Management (APCM). CMS proposes payment for APCM services provided by a physician or qualified healthcare professional responsible for all primary care during a calendar month. This would include a bundle of specific care management and communication technology-based services with a performance measurement requirement, reportable via the Value in Primary Care MVP.
Additionally, CMS proposes modification to currently finalized MVPs, including the consolidation of two currently finalized neurology-focused MVPs into a singular neurological MVP.
MVP Reporting. CMS estimates 80 percent of specialties will have applicable MVPs available. Non-MIPS eligible practitioners would not need to report the MVP to furnish and bill for APCM services.
MVP and Subgroup Reporting. CMS is implementing MVPs and subgroup reporting to allow clinicians to report measures that directly reflect their clinical practice. Though traditional MIPS remains an option, CMS plans to fully adopt MVPs and eventually sunset traditional MIPS.
Low Titer O+ Whole Blood Transfusion Therapy During Ground Ambulance Transport
CMS proposes to expand the ALS2 definition to include low titer O+ whole blood transfusions (WBT), making WBT an ALS2 level skill under the Medicare Ambulance Fee Schedule. The current definition includes the administration of one or more of seven specified advanced interventions.
If the rule is finalized as proposed, the regulation would read as follows:
42 CFR § 414.605, ALS2 means either transportation by ground ambulance vehicle, medically necessary supplies and services, and the administration of at least three medications by intravenous push/bolus or by continuous infusion, excluding crystalloid, hypotonic, isotonic, and hypertonic solutions (Dextrose, Normal Saline, Ringer's Lactate); or transportation, medically necessary supplies and services, and the provision of at least one of the following ALS procedures:
(1) Manual defibrillation/cardioversion.
(2) Endotracheal intubation.
(3) Central venous line.
(4) Cardiac pacing.
(5) Chest decompression.
(6) Surgical airway.
(7) Intraosseous line.
(8) Administration of low titer O+ whole blood transfusion.
Additionally, CMS did not address alternative blood products in the proposed rule. However, CMS is seeking comment on whether it should add the administration of packed red blood cells (PRBCs) or plasma to the list of ALS2 procedures.
According to the proposal, the change would likely go into effect in January 2025.
Medicare Part A and B Payment for Dental Services
CMS has partnered with the Agency for Healthcare Research and Quality (AHRQ) in order to conduct a literature review on the potential connection between sickle cell disease and hemophilia and dental services. Additionally, CMS proposes to codify certain policies to permit payment for certain dental services that are inextricably linked to other covered services (certain dental services for patients receiving dialysis services to treat ESRD.
CMS proposes to add an additional clinical scenario to the examples of clinical scenarios under which payment can be made for certain dental services under Section 411.15(i)(3)(i)(A). Specifically, CMS proposes to amend the regulation at paragraph A to include "dental or oral examination performed as part of a comprehensive workup in either the inpatient or outpatient setting prior to Medicare-covered dialysis services when used in the treatment of ESRD; and medically necessary diagnostic and treatment services to eliminate an oral or dental infection prior to, or contemporaneously with Medicare-covered dialysis services when used in the treatment of ESRD." CMS seeks comments on this proposal. Additionally, CMS seeks comments from the public on what dental services are integral to specific covered services to treat diabetes.
Expanding Colorectal Cancer Screening
CMS is updating and expanding colorectal cancer (CRC) screening to advance health equity by addressing health disparities. CMS believes computed tomography colonography (CTC) is reasonable and necessary as a CRC screening test, especially for those preferring a less invasive option than a screening colonoscopy. The goal is for patients and clinicians to make informed choices considering the risks and benefits of each test.
Medicare Prescription Drug Inflation Rebate Program
Under the Inflation Reduction Act of 2022 (IRA), drug companies must pay inflation rebates if they raise prices for certain Part B and Part D drugs faster than the rate of inflation. CMS states that it is using rulemaking to modify the Inflation Rebate Program in 2025 because the IRA permits implementation of the Medicare Part D Drug Inflation Rebate Program through program instruction or other forms of guidance only through 2024. CMS seeks to establish policies for both Part B and Part D inflation rebates in regulations.
In this rule, CMS proposes to codify policies previously established in guidance for the Medicare Prescription Part B Drug Inflation Rebate Program and Part D Inflation Rebate Revised Guidance. Unless otherwise specified, CMS proposes that the provisions with respect to Part B rebatable drugs would apply for all calendar quarters beginning with Jan. 1, 2023, and, with respect to Part D rebatable drugs, for all applicable periods beginning with Oct. 1, 2022. CMS also proposes new policies.
For Part B Inflation Rebates, CMS proposes:
- It will compare payment amounts in the quarterly pricing files published by the agency to the inflation-adjusted payment amounts for the respective quarters to determine if the criteria for a coinsurance adjustment are met.
- For a Part B rebatable drug first approved or licensed by the FDA on or before Dec. 1, 2020, but first marketed after Dec. 1, 2020, the payment amount benchmark quarter will be the third full calendar quarter after the drug's first marketed date. For a Part B rebatable drug billed under a not otherwise classified (NOC) code during the calendar quarter starting July 1, 2021, or the third full calendar quarter after the drug's first marketed date, whichever is later, the payment amount benchmark quarter will be the third full calendar quarter following the assignment of a billing and payment code other than an NOC code.
- It will exclude 340B units from professional claims with dates of service in 2024 (and 2023) submitted by Medicare suppliers listed by the HRSA 340B Office of Pharmacy Affairs Information System as participating in the 340B Program. This will be done by identifying these suppliers and their claims using National Provider Identifiers and/or Medicare Provider numbers. CMS previously planned to rely on modifiers for 2024 exclusions.
- It will exclude units of refundable single-dose container or single-use package drugs subject to discarded drug refunds from the calculation of rebate amounts, generally during the reconciliation process.
- It will perform one reconciliation of rebate amounts within 12 months of sending Rebate Reports if it identifies any agency errors in calculation or manufacturer misreporting.
- It will enforce civil money penalties on manufacturers that fail to pay rebate amounts equal to 125 percent of the rebate amount.
For Part D Inflation Rebates, CMS proposes:
- For a Part D rebatable drug first approved or licensed by the FDA on or before Oct. 1, 2021, that lacks average manufacturer price (AMP) data reported under Section 1927(b)(3) of the IRA for any quarters between Jan. 1, 2021, and Sept. 30, 2021, it will set the payment amount benchmark period as the first calendar year, starting no earlier than 2021, in which the drug has at least one quarter of AMP reported.
- For a subsequently approved Part D rebatable drug (first approved or licensed after Oct. 1, 2021) without reported AMP data for any quarters in the first calendar year following its first marketed date, the payment amount benchmark period will be the first calendar year in which the drug has at least one quarter of AMP reported. CMS is also seeking comments on alternative policies for cases where AMP data is not reported for certain NDC-9s of a Part D rebatable drug.
- For claims with dates of service on or after Jan. 1, 2026, it will exclude from the total 36 units used to calculate the rebate amount for a Part D rebatable drug those units for which a manufacturer provided a discount under the 340B Program. CMS will determine these units using data reflecting the total number of such units dispensed during the applicable period and may apply adjustments as needed. CMS notes it may apply adjustment(s) to these data as needed and is soliciting comments on alternative policies for collecting and using 340B data to calculate rebate amounts for Part D rebatable drugs.
- It will perform one reconciliation of rebate amounts within 12 months of sending Rebate Reports if CMS identifies any agency errors in calculation or manufacturer misreporting, and a second reconciliation approximately 24 months thereafter.
- It will enforce civil money penalties on manufacturers that fail to pay rebate amounts equal to 125 percent of the rebate amount.
CMS also notes that if any provision of proposed Part 427 (Part B inflation rebates) or Part 428 (Part D inflation rebates) were to be invalidated, they would be considered severable and the remaining sections would remain valid and enforceable.
Medicare Parts A and B Overpayment Provisions of the Affordable Care Act
CMS has not yet finalized its proposals with respect to overpayments under Medicare Parts A and B in the December 2022 Overpayment Proposed Rule. Instead, after considering the public comments it received in connection with the December 2022 Overpayments Proposed Rule, the agency is retaining the Parts A and B proposals published in the December 2022 Overpayment Proposed Rule and will make additional proposals to revise existing regulations regarding the deadline for reporting and returning overpayments.
CMS now proposes to clarify the circumstances under which the deadline for reporting and returning overpayments will be suspended to allow providers time to investigate and calculate overpayment amounts. Specifically, CMS proposes that the 60-day time frame would be suspended if 1) a person identified an overpayment, but has not yet completed a good-faith investigation to determine the existence of related overpayments, with such suspension lasting the earlier of a) the completion of the good-faith investigation and calculation of related overpayments or b) 180 days after the date on which the initial identified overpayment was identified, and 2) a person has made a submission to the Office of the Inspector General (OIG) Self-Disclosure Protocol or CMS Voluntary Self-Referral Disclosure Protocol or after requests for an extended repayment schedule as defined under regulation. After the suspension, CMS proposes that the requirement to report and return the overpayment will now be the earlier of 1) 60 days after the conclusion of the good-faith investigation and calculation of the overpayment amount or 2) 180 days from the initial discovery of the overpayment.
CMS provides an example that helps illustrate how these timeframes toll. If a provider identifies an overpayment on day one but has reason to suspect that there may be more affected claims, that provider will now have up to 180 days to conduct and conclude a good-faith investigation to determine the extent of related overpayments. This timeframe may be suspended further subject to voluntary submissions made to OIG or CMS, as set forth above. However, CMS states that if the provider decides not to conduct an investigation, then the overpayment must be reported and returned within 60 days from its initial discovery.
Requests for Information (RFI)
Services for Social Needs
For CY 2025, CMS is launching a comprehensive RFI focused on four recently implemented service categories: Community Health Integration, Principal Illness Navigation, Principal Illness Navigation – Peer Support and Social Determinants of Health Risk Assessment.
This RFI aims to gather input from stakeholders on potential policy refinements for these services, which were introduced in the previous year. CMS is seeking input on:
- ways to identify specific services within the scope of the new codes
- potential barriers to access for Medicare beneficiaries
- strategies to improve utilization of these high-value services
Full MVP Adoption
CMS seeks comments on achieving full MVP adoption and subgroup participation, advancing the National Quality Strategy. Feedback is requested on:
- clinician readiness to report MVPs
- ensuring applicable MVPs for all clinicians
- parameters needed for multispecialty groups to report MVPs relevant to their scope of care
Ambulatory Specialty Care with MVP Framework
CMS is soliciting comments on several parameters of a potential model, including considering mandatory participation of relevant specialty care providers to overcome challenges such as selection bias and participant attrition, and to ensure the model is reaching a representative group of providers and beneficiaries to facilitate scaling of the model test. If proposed, a mandatory model would undergo notice and comment rulemaking, with implementation expected no earlier than 2026 to allow adequate preparation time.
Request for Information on Digital Therapies
CMS requests information on the opportunities and challenges related to coverage and payment policies for digital therapies, as well as claims processing of remote therapeutic monitoring (RTM) and remote physiologic monitoring (RPM). Specifically, CMS asks for real-life examples of digital therapeutics (DTx) in practice models, the industry's standards for safety and privacy, and whether they could be billed under existing remote therapeutic monitoring codes. CMS asks what aspects of DTx for behavioral health it should consider when evaluating whether to design a new Medicare benefit category.
MSSP: Comment Solicitation on Establishing Higher Risk and Potential Reward Under the ENHANCED Track
CMS is seeking comments on financial arrangements that could allow for higher risk and potential reward under a revised ENHANCED track within the Shared Savings Program, including the designs of and tradeoffs between financial model features. CMS asks:
- How should a revised ENHANCED track with higher risk and potential reward also require additional accountability for quality?
- Should ACOs in this revised track be required to report all payer/all patient quality measures?
