2025 Medicare Physician Fee Schedule Final Rule

CMS finalizes payment changes for 2025

On Nov. 1, CMS released the 2025 Medicare Physician Fee Schedule (MPFS) final rule, setting the conversion factor at $32.3465, a 2.83% reduction from the 2024 rate of $33.2875. This adjustment includes a 0.00% update as required by MACRA, the expiration of the temporary 2.93% payment increase for 2024, and a 0.02% budget neutrality adjustment. Additionally, for 2025, CMS projects a 3.5% increase in the Medicare Economic Index (MEI), highlighting the additional costs of running a medical practice.

CMS anticipates a 0% impact on dermatology. However, this estimate does not account for the expiration of the temporary 2.93% payment increase that was in effect for 2024. Consequently, the actual impact for dermatologists is likely closer to a 2.83% reduction. On a per-code basis, the average impact is approximately -3.21%, though the total payment impact will vary based on practice mix and volume of services provided.

Advocacy wins

As a result of AADA’s advocacy, CMS will extend certain telehealth flexibilities through 2025, including allowing physicians to use their practice location rather than a home address for telehealth services conducted from home. This policy extension, strongly supported by the Academy, helps maintain physician privacy in response to longstanding concerns about the public display of physician home addresses.

Additionally, because of advocacy from the AADA and other medical groups, CMS will keep the Merit-based Incentive Payment System (MIPS) performance threshold at 75 points for the 2025 performance year. Maintaining the performance threshold helps provide stability, especially for small and independent practices.

Also, CMS has revised its cost scoring methodology starting in the 2024 performance period, impacting MIPS payments in 2026. The median cost score will match the performance threshold, with benchmarks set by standard deviations from this median. Moving from percentiles will likely improve clinician cost scores.

Other finalized MPFS policies

Dermatology-specific codes (CPT codes 96920-96922)

CMS did not adopt the RUC recommended values for the excimer laser treatment codes (CPT codes 96920-96922) for psoriasis, instead finalizing lower work RVUs of 0.83, 0.90, and 1.15. The Academy strongly opposes these reductions, as they hinder patient access to psoriasis treatments and do not recognize current practice expense models.

Global surgical packages

CMS did not finalize its proposed transfer of care modifiers -55 and -56 for 90-day global packages. However, the agency finalized its proposal that the -54 modifier must be used when only the surgery portion of a 90-day global package is performed. Notably, CMS had considered extending this proposal to 10-day global surgical codes; however, it will not apply these requirements to 10-day global surgical codes.

New add-on code (G0559)

CMS finalized a new evaluation and management (E/M) add-on code, G0559, for situations where a physician, who did not perform the procedure and is not in the same group as the performing physician, sees a patient during the 90-day global period for a post-operative follow-up visit addressing the surgical procedure, without a formal transfer of care. In response to stakeholder feedback, CMS modified the policy to allow physicians of the same specialty, but not in the same group practice as the performing physician, to bill for G0559.

Complexity add-on code (G2211)

CMS expanded the use of the complexity add-on code (G2211). This change would allow payment when the visit is reported by the same practitioner on the same day as:

• An annual wellness visit,

• Vaccine administration, and

• Any Medicare Part B preventive service provided in the office or outpatient setting.

Medicare telehealth flexibilities

Starting Jan. 1, 2025, unless Congress intervenes, many telehealth flexibilities from the COVID-19 Public Health Emergency will end. These changes include reinstating geographic and facility restrictions, which would limit most telehealth services to rural medical facilities.

MIPS and QPP updates

New MIPS Value Pathway (MVP) for dermatology

The most significant change impacting dermatology in the QPP is the introduction of an MVP for dermatology called “Dermatological Care.” MVPs are a new QPP reporting pathway that includes specialty-specific or condition-specific measures. The agency’s goal is to use MVPs to help prepare clinicians to participate in alternative payment models (APMs).

For over two years, the AADA has strongly advocated against CMS’s MVP for dermatology because it arbitrarily combines measures that assess unrelated conditions and procedures, offering little value in assessing costs and quality of care for participating clinicians and their patients. MVP reporting remains optional for now, though CMS plans to sunset traditional MIPS and transition clinicians to APMs in the future. Members can choose to report an MVP in addition to traditional MIPS, and CMS will use the highest score achieved from either option.

The Academy will develop resources to help dermatologists decide the right MIPS/MVP reporting strategy for them. For dermatologists who choose to report the MVP for Dermatological Care via DataDerm™, the AAD’s clinical data registry, the new registry platform launching in 2025 will be able to support their reporting. DataDerm will offer exclusive access to many dermatology-specific measures for both MIPS and MVP reporting.

New MIPS quality measure for melanoma

Following AADA Advocacy, starting in 2025, dermatologists will be able to report on a new high-priority MIPS quality measure, “Melanoma: Tracking and Evaluation of Recurrence,” which focuses on consistent monitoring for melanoma recurrence.

Removal of MIPS Measure 137

CMS will remove MIPS Measure 137, “Melanoma: Continuity of Care – Recall System,” to avoid duplication with the new melanoma tracking measure, simplifying reporting while maintaining essential care metrics.

For more information on the 2025 MPFS, please review:

• The CMS fact sheet

• The QPP fact sheet (PDF)

• The full 2025 MPFS final rule (PDF)

Related Academy Resources