The Centers for Medicare & Medicaid Services (CMS) on Nov. 1 finalized the 2025 Outpatient Prospective Payment System (OPPS) and Physician Fee Schedule (PFS) Rules. Among other provisions, the OPPS rule raises the outpatient and ambulatory surgical center payment rate by 2.9 percent, while the PFS rule reduces the Medicare conversion factor by 2.83 percent from the 2024 rates. America’s Essential Hospitals publicly commented on the proposed OPPS rule and proposed PFS rule in September.
The finalized OPPS rule is broadly consistent with the proposed rule. CMS finalized a 2.9 percent payment rate increase, which was 0.3 percentage points above the proposed level. CMS also adds a two-year phase-in of its new conditions of participation for hospitals that offer obstetric services. Other notable changes in the rule include:
- Finalizing CMS’ proposal to reduce the review timeframe for prior authorization requests from 10 to seven business days
- Narrowing the definition of “custody” for formerly incarcerated individuals covered by Medicare
- Codifying Congress’ requirement for states to add a continuous eligibility policy for children under 19 enrolled in Medicaid and the Children’s Health Insurance Program
The PFS rule, also consistent with its proposed rule, includes adjustments to payment policies for the Medicare Shared Savings Program, including a new health equity benchmark adjustment that will apply to accountable care organizations that serve a high share of patients dually eligible for Medicare and Medicaid. Finally, CMS also confirms that it lacks the authority to extend currently authorized telehealth flexibilities beyond the end of the calendar year without congressional action.
The association will publish further analyses of these rules in the coming days.
Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.
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