Understanding the 2025 Medicare Physician Fee Schedule (PFS) Updates
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1). The Conversion Factor Cut: What It Means for You
One of the most notable changes in the 2025 Final Rule is the reduction of the Medicare conversion factor to $32.74, representing a 2.83% decrease from 2024. This figure plays a central role in calculating reimbursement for Medicare services.
For many practices, especially those already stretched thin, this cut could be felt across the board. While the decrease might seem minor on paper, it translates to reduced revenue on a per-service basis, potentially compounding over the course of a year.
2. Big Billing Changes for FQHCs and RHCs
In 2024, Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) were able to use G0511 to bill for a wide range of care management services—from Chronic Care Management (CCM) and Behavioral Health Integration (BHI) to Remote Patient Monitoring (RPM). The code allowed these facilities to bill multiple times per month and receive higher-than-average reimbursement.
That all changes in July 2025.
CMS will eliminate G0511, requiring RHCs and FQHCs to start billing for each service separately—just like traditional ambulatory practices. For example:
- 99490 will apply for non-complex CCM
- 99439 will be used for additional CCM time beyond 20 minutes
The goal is standardization across all practice types, but for many RHCs and FQHCs, it will mean adapting to a more complex billing structure. Fortunately, there’s an alternative: the new Advanced Primary Care Management (APCM) program.
Introducing a New Era of Preventive Care: Advanced Primary Care Management
CMS is launching a new care model in 2025 designed to streamline and elevate how preventive care is delivered to Medicare patients. Called Advanced Primary Care Management (APCM), this program builds on existing care coordination efforts but takes things a step further by combining several services into one comprehensive approach.
Instead of juggling multiple billing pathways, APCM brings together core elements from established programs like:
- Chronic Care Management (CCM)
- Transitional Care Management (TCM)
- Principal Care Management (PCM)
- Virtual check-ins and e-visits
- Interprofessional consultations
- Remote review of patient-submitted photos or videos
This unified structure is intended to simplify billing and expand access to coordinated, ongoing support, especially for patients managing chronic or complex conditions.
While primarily geared toward general, family, geriatric, and internal medicine providers, CMS proposes certain specialists like cardiologists or OB-GYNs who frequently serve as a patient’s main source of care can offer the program.
APCM represents CMS’s latest effort to consolidate and strengthen preventive care delivery, giving providers more flexibility and a broader set of tools to keep Medicare patients healthier, longer
Billing for Advanced Primary Care Management:
What sets Advanced Primary Care Management apart from earlier care coordination programs is its broader reach. The program isn’t one-size-fits-all, patients are categorized into three levels based on the complexity of their health conditions, with each level tied to its own billing code and monthly reimbursement amount.
- Level 1 (G0556)
For patients with one or no chronic conditions
→ Practices receive $15 per patient per month - Level 2 (G0557)
For patients managing two or more chronic conditions
→ Reimbursed at $50 per patient per month - Level 3 (G0558)
For Qualified Medicare Beneficiaries (QMBs) with two or more chronic conditions
→ Highest reimbursement at $110 per patient per month
This structure allows practices to align care intensity with patient risk, while giving Medicare providers a more predictable, scalable payment model
No Time Minimums, Just Patient-Centered Care
Unlike previous care management models, APCM is not based on time requirements. CMS has removed set thresholds, such as the 20-minute minimum tied to traditional Chronic Care Management, allowing clinical staff to provide as much support as each patient actually needs.
This approach gives care teams the flexibility to respond to real-life scenarios. Whether a patient is recovering from a hospital stay, struggling with symptoms, or falling behind on medications, staff can adjust support as needed. That might include updating care goals, connecting patients to local resources, or helping them manage appointments and medication refills.
Services under APCM can be performed under general supervision, meaning clinical staff deliver the care while the provider oversees the process. Practices can also work with care management partners to offer these services without adding pressure to their internal team.
What APCM Requires from Participating Practices
Patient Consent
Every patient must give formal consent before enrolling in APCM. Even though all Medicare patients are eligible, they cannot participate in multiple care management programs at the same time. This means patients must choose between APCM and programs like Chronic Care Management, Principal Care Management, or Transitional Care Management.
Consent must be documented in the medical record, and patients should be told they may leave the program at any time. Cost-sharing applies unless the patient is a Qualified Medicare Beneficiary, who is exempt from out-of-pocket costs.
Every patient must give formal consent before enrolling in APCM. Even though all Medicare patients are eligible, they cannot participate in multiple care management programs at the same time. This means patients must choose between APCM and programs like Chronic Care Management, Principal Care Management, or Transitional Care Management.
Consent must be documented in the medical record, and patients should be told they may leave the program at any time. Cost-sharing applies unless the patient is a Qualified Medicare Beneficiary, who is exempt from out-of-pocket costs.
Initiating Visits for New Patients
Patients who are new to the practice must complete an initiating visit before enrollment, unless they have been seen by a provider in the same practice within the past three years.
Patients who are new to the practice must complete an initiating visit before enrollment, unless they have been seen by a provider in the same practice within the past three years.
24/7 Access and Continuity of Care
Practices must ensure that someone from the care team is available around the clock and can access the patient’s records. After-hours contact options must also be in place for urgent concerns. Practices are expected to offer continuity by allowing patients to regularly see the same care team member and by supplementing standard office hours with options like extended hours or home visits when needed.
Practices must ensure that someone from the care team is available around the clock and can access the patient’s records. After-hours contact options must also be in place for urgent concerns. Practices are expected to offer continuity by allowing patients to regularly see the same care team member and by supplementing standard office hours with options like extended hours or home visits when needed.
Ongoing Comprehensive Management
The care team should assess both the physical and emotional needs of the patient, ensure they are receiving preventive services, and assist with medication tracking and self-management strategies.
The care team should assess both the physical and emotional needs of the patient, ensure they are receiving preventive services, and assist with medication tracking and self-management strategies.
Shared Electronic Care Plans
Each enrolled patient should have a digital care plan that is regularly reviewed and updated. This plan should be accessible to everyone involved in the patient’s care, including providers, staff, the patient, and any caregivers.
Each enrolled patient should have a digital care plan that is regularly reviewed and updated. This plan should be accessible to everyone involved in the patient’s care, including providers, staff, the patient, and any caregivers.
Support During Transitions of Care
When patients move between healthcare settings, such as after a hospital stay or emergency department visit, care managers must oversee those transitions. They are responsible for sharing health records with other providers and following up with the patient within seven days of discharge.
When patients move between healthcare settings, such as after a hospital stay or emergency department visit, care managers must oversee those transitions. They are responsible for sharing health records with other providers and following up with the patient within seven days of discharge.
Coordinating with External Resources
The care team should help connect patients with other providers and support systems, including specialists, home health, social services, and long-term care facilities. Care managers also need to document patient preferences, goals, strengths, and any social or cultural considerations that may affect care.
The care team should help connect patients with other providers and support systems, including specialists, home health, social services, and long-term care facilities. Care managers also need to document patient preferences, goals, strengths, and any social or cultural considerations that may affect care.
Multiple Communication Channels
Patients must be able to reach their care team through various methods such as secure messaging, email, phone, online portals, or video. Practices should also provide options for reviewing submitted media and offer virtual services that allow for clinical decision-making.
Patients must be able to reach their care team through various methods such as secure messaging, email, phone, online portals, or video. Practices should also provide options for reviewing submitted media and offer virtual services that allow for clinical decision-making.
Population-Level Care Planning
Practices must review their full patient population to identify care gaps and implement appropriate interventions. They also need to be able to categorize patients by risk level according to the APCM structure.
Practices must review their full patient population to identify care gaps and implement appropriate interventions. They also need to be able to categorize patients by risk level according to the APCM structure.
Tracking Results and Measuring Performance
Unlike other care models that focus only on service delivery, APCM places an emphasis on results. MIPS-eligible providers must enroll in the Value in Primary Care MIPS Value Pathway to participate. Even those who are not MIPS-eligible, such as FQHCs and RHCs, are welcome to join the program.
Unlike other care models that focus only on service delivery, APCM places an emphasis on results. MIPS-eligible providers must enroll in the Value in Primary Care MIPS Value Pathway to participate. Even those who are not MIPS-eligible, such as FQHCs and RHCs, are welcome to join the program.
APCM is also compatible with broader value-based care initiatives like the Medicare Shared Savings Program, ACO Reach, Primary Care First, and Making Care Primary. These programs will help evaluate whether APCM improves outcomes and reduces costs across the Medicare population
Putting It All Into Practice
The Medicare Physician Fee Schedule is shifting, and with it, the way practices approach care and reimbursement. While payment cuts may present challenges, new options like Advanced Primary Care Management offer practices the opportunity to streamline care delivery and better support their Medicare patients. With early preparation and a clear understanding of what’s ahead, practices can turn these changes into new opportunities for patient-centered care.
Sources:
2025 Medicare physician payment schedule (PFS) and ... (n.d.). https://www.ama-assn.org/system/files/ama-2025-mpfs-summary.pdf
Request access. Federal Register :: Request Access. (n.d.). https://www.federalregister.gov/documents/2024/07/31/2024-14828/medicare-and-medicaid-programs-cy-2025-payment-policies-under-the-physician-fee-schedule-and-other
Sources:
2025 Medicare physician payment schedule (PFS) and ... (n.d.). https://www.ama-assn.org/system/files/ama-2025-mpfs-summary.pdf
Request access. Federal Register :: Request Access. (n.d.). https://www.federalregister.gov/documents/2024/07/31/2024-14828/medicare-and-medicaid-programs-cy-2025-payment-policies-under-the-physician-fee-schedule-and-other