On November 1, 2024, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2025 Revisions to Payment Policies under the Medicare Physician Payment Schedule (PFS) and Other Changes to Part B Payment and Coverage Policies.1

The rule includes proposals related to Medicare physician payment and the Quality Payment Program (QPP). These policies were effective on January 1, 2025.

While there are thousands of items considered in the Final Rule, an effort has been made to identify a few items which may be of interest to providers of spine care.

The 2025 Medicare conversion factor decreased for the fifth straight year by approximately 2.83% from $33.2875 to $32.3465.

This cut results from the expiration of a 2.93% temporary update to the conversion factor at the end of 2024 and a 0% baseline update for 2025 under the Medicare Access and CHIP Reauthorization Act.2

Unfortunately, this cut in the conversion factor for 2025 occurred while the cost of practicing medicine continues to rise. In fact, CMS has determined that the increase in the Medicare Economic Index (MEI) for 2025 is 3.5%; the conversion factor continues to this discrepancy.

CMS bears the economic brunt of this, and is powerless to change it for two major reasons. Firstly, there are no additional or unspent funds which could be added to pay for the Physician Fee Schedule. Secondly, the algorithm for determining the conversion factor is controlled by statute. For these reasons, any improvement to provider pay rates will need to occur as a result of legislation, not as a result of administrative decisions at CMS.