Introduction
As the Centers for Medicare & Medicaid Services (CMS) released its final 2025 Medicare Physician Fee Schedule (PFS) on November 1, healthcare professionals and digital health advocates took note of its limited support for digital health initiatives. While the new schedule includes minor provisions for digital therapeutics and some telehealth services, it reflects its constrained authority in setting broad digital health policies without additional Congressional support. With telehealth flexibilities set to expire at the end of 2024, CMS’s current rule reflects its limited capacity to make impactful changes in digital health, especially as the 2024 presidential election looms.
Overview of the Final 2025 Medicare Physician Fee Schedule
CMS’s 2025 PFS provides updates to digital health policies, including some modifications in telehealth payment models, digital therapeutics, and mental health codes. However, most of these updates are minor, reflecting CMS’s limited scope to address digital health and telehealth services comprehensively.
Key Updates and Limitations in Digital Health
The finalized rule adopts several changes proposed in CMS’s July draft, including updates for digital mental health technologies and adjustments to telehealth codes for certain populations. It has extended audio-only telehealth as a permanent service but has yet to clarify other telehealth policies, particularly those related to virtual supervision and location requirements.
CMS’s Role and Authority in Digital Health Policy
In the final rule, CMS highlighted its limited authority in setting long-term digital health policies without Congressional intervention. This limitation is particularly visible in telehealth, where Congress must extend the existing pandemic-era telehealth waivers. Its limited authority means that many digital health updates, such as expanding telehealth for rural and underserved populations, will require legislative action.
Digital Health Policies in the 2025 Fee Schedule
The final PFS includes provisions for digital mental health technologies (DMHT) and updates some telehealth payment policies. These steps reflect CMS’s commitment to supporting digital health, even within its restricted authority.
Digital Mental Health Therapeutics
CMS finalized payment codes for digital mental health treatment devices (DMHT), which are FDA-approved for mental or behavioral health treatment. These devices are now eligible for reimbursement under new codes, including G0552, G0553, and G0554, which cover device supply costs and treatment management. CMS clarified that only devices provided by healthcare practitioners, not those self-supplied by patients, qualify for reimbursement under these codes. Although CMS introduced these codes, it stated that more evidence is required to set definitive prices for DMHTs, reflecting an ongoing iterative approach.
Telehealth Payment Extensions and Limitations
Telehealth was another focus in the 2025 rule, though CMS’s final offerings were limited. Audio-only telehealth has been made permanent, catering especially to rural and lower-income populations with limited access to video technology. However, CMS did not finalize provisions for virtual direct supervision for residents beyond 2025, nor did it address telehealth provider reporting requirements, citing restricted authority.
Impact on Rural Health Clinics and Federally Qualified Health Centers
CMS’s rule included specific updates for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs), which serve low-income and rural communities. Despite CMS’s acknowledgment of the role these centers play in telehealth, limitations remain in place.
Telemental Health Payment Parity and Extensions
In previous fee schedules, Congress granted payment parity for RHCs and FQHCs for telemental health services. However, CMS has maintained that non-mental health services delivered via telehealth will continue to be reimbursed at a lower rate. This lower rate remains a concern for RHCs and FQHCs, which argue that telehealth services should be compensated at parity with in-person care to make them financially sustainable.
Alternative Payment Models for Rural Health
CMS reviewed a proposal to reimburse all telehealth services in RHCs and FQHCs at parity with in-person visits, yet it declined to implement this alternative model. CMS stated that it would continue with its current payment methodology, based on a weighted average, while awaiting additional Congressional support to establish more permanent policies.
Audio-Only Telehealth and Opioid Treatment Programs
The final PFS rule addresses opioid treatment programs by permitting audio-only telehealth services for periodic assessments of patients using methadone, buprenorphine, and naltrexone. CMS emphasized that audio-only telehealth plays a crucial role, especially among elderly, rural, and low-resource Medicare populations who lack consistent broadband access. Additionally, CMS noted that telehealth for opioid treatment services addresses the specific needs of Native American communities, who experience a high incidence of opioid use disorder.
Challenges and Need for Congressional Action
Its rule repeatedly calls on Congress to take action on critical telehealth issues, including geographic restrictions that prevent Medicare beneficiaries in urban and suburban areas from accessing telehealth services from home. These restrictions limit access to telehealth for millions of Medicare beneficiaries and underscore the need for updated policies that reflect the realities of digital health. It also highlighted the need for Congress to allow broader provider types, such as physical therapists, to offer telehealth services, a change that could make these services accessible to more beneficiaries.
Conclusion
CMS’s 2025 Medicare Physician Fee Schedule reflects progress in digital health but remains limited by regulatory constraints. The final rule includes some support for digital mental health therapeutics and ensures continued access to audio-only telehealth, yet much of CMS’s vision for telehealth and digital health innovation hinges on Congressional action. As healthcare increasingly relies on digital solutions, policymakers must collaborate to modernize telehealth policies, expand access, and ensure digital health technologies are accessible to all Medicare beneficiaries, regardless of location or income level.
Discover the latest GovHealth news updates with a single click. Follow DistilINFO GovHealth and stay ahead with updates on medical advancements. Join our community today!
FAQs
1. What is the Medicare Physician Fee Schedule?
Ans: The Medicare Physician Fee Schedule (PFS) is an annual set of payment rules and codes for Medicare, determining the reimbursement for healthcare services provided to Medicare beneficiaries.
2. What digital health changes were included in CMS’s 2025 PFS?
Ans: The 2025 PFS includes codes for digital mental health therapeutics, extensions for audio-only telehealth, and some updates for telehealth services in rural health clinics.
