FY 2025 OPPS and MPFS Proposed Rules

New Obstetrical Services-Specific Conditions of Participation (CoPs)

CMS is proposing new CoPs for hospitals and CAHs that provide obstetrical services; currently there are no specific CoPs for obstetrical (OB) services to ensure the provision of high-quality care for pregnant people and newborns in healthcare facilities.

The proposed conditions outline the requirements that hospitals and CAHs providing obstetrical services must meet to participate in the Medicare and Medicaid programs:

• Organized – OB services must be well-organized and in accordance with nationally recognized acceptable standards of practices for physical and behavioral health of pregnant, birthing, and postpartum patients
• Integrated – OB services will maintain high-quality standards appropriate to the complexity of the care provided and will be seamlessly integrated with other departments within the facility
• Supervised – OB patient care units should be overseen by an individual with the required education and training (e.g., an experienced registered nurse, certified nurse midwife, nurse practitioner, physician assistant, or a doctor of medicine or osteopathy)
• Practitioner Roster – Must define and document obstetrical privileges for all practitioners delivering obstetrical care, based on each practitioner’s competencies
• Facility needs – OB services must align with the facility’s needs and resources
• Equipment – Labor and delivery room suites must have essential resuscitation equipment readily available, including a call-in system, cardiac monitor, and fetal Doppler or monitor
• Protocols – Must ensure that there are sufficient provisions and protocols in place for OB emergencies, complications, immediate post-delivery care, and other health and safety events

If the proposed rule is finalized and published on October 1, 2025, hospitals and CAHs must begin complying with the new CoPs by April 1, 2026.

P.S. – CMS is contemplating if these proposed requirements should apply to REHs. Speaking of REHs…

Rural Emergency Hospital Quality Reporting (REHQR) Program

Recently a new Medicare provider type, REHs, were established. Most REHs were initially a CAH or a hospital with no more than 50 beds located in a rural area; HOWEVER, unlike CAHs, REHs are expected to submit quality measures to CMS.

CMS is proposing that an REH would begin submitting data to the REHQR program on the first day of the quarter following the date that a hospital has been designated as converted to an REH. In other words, suppose a hospital is designated as an REH on June 30, 2025—the REH would need to begin submitting data to the REHQR program starting on July 1, 2025.

Rural Health Clinic and Federally Qualifying Health Centers

Conditions of Coverage (CfCs)

RHCs and FQHCs are to be “primarily engaged providing outpatient health services” (42 CFR 491.9(a)(2)). During the survey process, “primarily engaged” is determined by evaluating the total hours of operation and assessing whether primary care services are the majority.

CMS is proposing to add standards that explicitly require RHCs and FQHCs to “provide primary care services” and clarification that RHCs or FQHCs cannot be a rehab agency or provide 100% behavioral health services. Providing primary care services will continue, but CMS will no longer determine or enforce the standard of being “primarily engaged in furnishing primary care services.” This change is intended to allow RHCs to provide more outpatient-specialty services and improve access to care for rural communities.

Since providing primary care services will still be required by and evaluated during the survey process, what standards or criteria should be used during the survey process? This is out for public comment.

Additionally, under the proposals to the CfCs, CMS is proposing to remove hemoglobin and hematocrit (H&H) from the list of laboratory services that RHCs (not FQHCs) must be able to perform. Typically, H&H levels are not ordered as standalone tests but as part of a larger test panel completed at an offsite laboratory. Consequently, RHCs report this test infrequently, if at all. By removing this requirement, CMS aims to reduce the burden associated with purchasing and maintaining the laboratory equipment needed for these tests.

RHC Productivity Standards

CMS believes that the productivity standards first established in 1978 are antiquated and redundant with the Consolidated Appropriations Act, 2021 provisions. Therefore, CMS is proposing to remove them for RHCs. Pinch yourself—you’re not dreaming—and read it again. Possibly no more productivity standards for RHCs which follows the methodology FQHCs report to Medicare.

Payment for Preventive Vaccine Costs

More big news for RHCs and FQHCs: currently the costs for preventive vaccines and their administration are not billed to Medicare Part B. Instead, these costs are subsequently paid through the cost report process in addition to the RHC all-inclusive-rate (AIR) or FQHC prospective payment system (PPS). Hang on to your hats, folks, because CMS is proposing that these costs are to be paid at the time of service, then annually reconciled to the actual vaccine costs on the cost report. This also means that to get paid, these vaccines must be billed; non-billed vaccinations will not be added during the reconciliation process.

Currently, preventative vaccines include: pneumococcal, influenza, and Covid-19 (side note: this means Covid-19 is now a permanent preventative vaccine). CMS is also proposing that hepatitis B vaccines be included as preventative vaccines.

This will require operational systems changes to facilitate payment through claims. CMS is proposing that RHCs and FQHCs start billing Medicare B on or after July 1, 2025, for preventive vaccines and their administration at the time of service for dates of service.

The objective of this proposal is to improve the timeliness of payment for critical preventive vaccine administration in RHCs and FQHCs. Concerned about missed billing opportunities or the burdens of annual reconciliations because of this proposal? CMS is seeking your comments.

Dental Services

Dentists are physicians; services furnished by physicians, if face-to-face and medically necessary, are billable visits in RHCs and FHCs. Therefore, CMS is proposing that dental services that are inextricably linked to a specific medical service are billable visits and can be paid under the RHC AIR or FQHC PPS.

The KX modifier is used on a RHC or FQHC claim to indicate that the service is medically necessary and that the provider has included appropriate documentation in the medical record to justify the medical necessity of the service or item. CMS is proposing to use the KX modifier for dental claims indicating that the claim is inextricably linked to covered services.

Care Coordination Services

CMS is proposing that starting in 2025, RHCs and FQHCs would report the individual CPT and HCPCS codes that describe care coordination services instead of the single HCPCS code G0511. To avoid potential decline in payments, CMS is also proposing to permit the billing of the add-on codes associated with these services. Fingers crossed this will approve payment accuracy when furnishing these services.

Additionally, for 2025, CMS is proposing adopting coding and policies regarding Advanced Primary Care Management services for RHC and FQHC payments. Under these proposals, payments to RHCs and FQHCs will be made at the national non-facility physician fee schedule (PFS) amounts when the individual code appears on an RHC or FQHC claim, either alone or with other payable services. These payments will be in addition to the RHC AIR or FQHC PPS, with annual updates based on the PFS amounts for these codes.

Telecommunication Services

CMS is proposing to continue the following for telecommunication services:

• Allowing direct supervision via interactive audio and video telecommunications and to extend the definition of “immediate availability” to include real-time audio and visual interactive telecommunications (excluding audio-only) through December 31, 2025.
• Allowing payments for non-behavioral health visits provided via telecommunication technology. RHCs and FQHCs would continue to bill for services furnished using telecommunication technology by reporting HCPCS code G2025 on the claim, including services provided using audio-only communications technology through December 31, 2025.
• Delaying the in-person visit requirement for mental health services furnished via communication technology by RHCs and FQHCs to beneficiaries in their homes until January 1, 2026.

Rebasing and Revising of the FQHC Market Basket

Starting on October 1, 2014, FQHCs began transitioning to the FQHC PPS based on their cost reporting periods. By January 1, 2016, all FQHCs were paid under the FQHC PPS. In 2017, the PPS base rate was then increased by the Medicare Economic Index (MEI) each year.

CMS is proposing to rebase and revise the 2017 base rates to reflect a 2022 base year using cost reports beginning in the federal fiscal year 2022 (i.e., cost reporting periods beginning on and after October 1, 2021).

OPPS Payment Updates

CMS is proposing a 2.6 percent update to the OPPS and Ambulatory Surgical Center (ASC) payment rates for 2025 for hospitals that meet quality reporting requirements. This proposed update is based on a 3.0 percent projected increase in the hospital market basket percentage, which is then reduced by 0.4 percent to account for the productivity adjustment. Hospitals and ASCs that do not meet their quality reporting requirements will continue to face an additional 2 percent reduction in their fee schedule increase factor.

MPFS Payment Updates

CMS is also proposing a reduction in the average payment rates to the MPFS by 2.93 percent compared to the rates for calendar year 2024. Originally, rates were slated to increase by zero percent, but during the COVID-19 pandemic, to provide relief, rates were increased. Subsequently, this conversion factor reflects the zero percent overall update mandated by statute and to get MPFS rates back to the 2020 rates.