2025 Final Physician Fee Schedule Brings Big Changes for RHCs, FQHCs

CMS has released the final 2025 Physician Fee Schedule. While a more comprehensive summary of updates in the final PFS will be available soon, Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) will see significant updates in 2025. These updates are summarized below:

RHC productivity standards

Since the 1970s, RHCs have been subject to productivity standards to help determine the average cost per patient for Medicare reimbursement as well as identify situations where costs would not be allowed.

To keep patients and staff safe during the COVID-19 pandemic, CMS relaxed these standards to allow RHCs to implement appropriate COVID mitigation methods without negatively impacting their payments. In addition, the Consolidated Appropriations Act of 2021 (CAA, 2021) restructured payment limits for RHCs.

As a result of these factors, CMS is removing RHC productivity standards effective with cost report periods ending after December 31, 2024.

Primary care requirements

Guidance from the State Operations Manual for RHCs states that “RHCs may not be primarily engaged in specialized services.” In this case, “primarily engaged” is determined by calculating the total hours of an RHC’s operation and whether more than 50% of these hours involve providing specialty outpatient health services.

CMS is upholding the requirement that RHCs provide primary care services to their patient populations but finalizing its intention to no longer enforce the “primarily engaged” standard. CMS will no longer implement the 50% primary care rule for RHCs, providing RHCs greater flexibility by no longer placing restrictions on specialty services based on the volume of primary care services provided.

General care management

Since its adoption in the 2018 PFS final rule, the general care management HCPCS code G0511 has expanded to include 31 care management codes within RHCs and FQHCs.

Before 2024, CMS paid HCPCS code G0511 based on the national average non-facility PFS payment rate for each of the base codes included within code G0511. The methodology for determining payment changed in the 2024 PFS to a weighted average of the services that comprise the code based on the utilization data for the services in a physician office setting, as CMS determined that was the care setting most analogous to RHCs and FQHCs.

These changes sparked requests from interested parties that CMS allow them to bill Medicare for each of the services contained within HCPCS code G0511 when furnished in RHCs and FQHCs.

CMS agreed and finalized unbundling of codes within G0511 for RHCs and FQHCs. The requirement takes effect July 1, 2025, to allow a six-month window for RHCs and FQHCs to update their billing procedures. However, if organizations have the infrastructure in place to bill the individual codes starting January 1, they may do so. Starting July 1, 2025, RHCs and FQHCs will be required to bill individual service codes, rather than G0511. In addition, CMS will allow RHCs and FQHCs to bill add-on codes for additional time spent.

Advanced primary care management services

To simplify billing and documentation requirements of current care management codes, CMS finalized three new G-codes that would allow coding and payment for advanced primary care management. In addition, CMS finalized that RHCs and FQHCs be allowed to use the codes when appropriate.

CMS finalized the following codes, effective January 1 and to be paid at the PFS non-facility rate:

HCPCS Code	Descriptor
GPCM1	Advanced primary care management services provided by clinical staff and directed by a physician or other qualified health care professional who is responsible for all primary care and serves as the continuing focal point for all needed health care services, per calendar month. Various elements are required for GPCM1, which are too lengthy to list. Reach out if you have questions.
GPCM2	Advanced primary care management services for a patient with multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient, which place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline, provided by clinical staff and directed by a physician or other qualified health care professional who is responsible for all primary care and serves as the continuing focal point for all needed health care services, per calendar month, with the elements included in GPCM1, as appropriate.
GPCM3	Advanced primary care management services for a patient that is a qualified Medicare beneficiary with multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient, which place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline, provided by clinical staff and directed by a physician or other qualified health care professional who is responsible for all primary care and serves as the continuing focal point for all needed health care services, per calendar month, with the elements included in GPCM1, as appropriate.

Supervision via telecommunications

Under Medicare Part B, certain services are required to be provided under specific minimum levels of supervision by a physician or practitioner. During the COVID-19 public health emergency (PHE), requirements for direct supervision were changed to allow the provision of this supervision via real-time audio/video technology, rather than requiring the physical presence of the practitioner.

The 2024 final rule extended these flexibilities due to concerns about an abrupt return to requiring the physical presence of the practitioner given that RHCs and FQHCs had established new patterns of practice throughout the PHE. CMS also requested comments on patient safety or care-quality concerns when supervision is provided virtually versus in-person.

In response to comments received, CMS finalized temporarily maintaining the virtual presence flexibility, allowing virtual presence for a supervising physician or practitioner through December 31, 2025.

FQHC market basket update

In the Affordable Care Act, a payment system for FQHC services was established under Medicare Part B. The act requires that beginning in 2017, the base payment rate will be increased by the percentage increase in a market basket of FQHC goods and services or the MEI, if a market basket is not available. In 2017, FQHC payments were updated using a 2013-based FQHC market basket. The market basket was rebased and revised in 2021 to reflect a 2017 base year.

For 2025, CMS is rebasing and revising the market basket to a 2022 base year, maintaining historical frequency of updating the basket every four years. The 2022 basket is based on FQHC Medicare cost report data for 2022.

Reimbursement for dental care

In general, Medicare does not pay for dental services. However, in the 2023 PFS, CMS clarified that Medicare payment for dental services under Parts A and B could be made when the services are “inextricably linked to, and substantially related and integral to the clinical success of, other covered services.” The 2023 PFS provided specific examples of covered services for which dental health is a significant factor in successful treatment, and the 2024 PFS expanded these examples.

Interested parties requested in the 2024 PFS that CMS provide payment for inextricably linked dental services in the FQHC setting, pointing out that many FQHCs provide dental services on-site, and health center patients could benefit from payment policies for these dental services being implemented within FQHCs.

In the 2025 rule, CMS noted that dentists are defined as physicians in Medicare statute, and that services furnished by physicians are billable visits in RHCs and FQHCs. CMS clarified that inextricably linked dental services, as clarified within the 2025 PFS, furnished in an RHC or FQHC are visits that can be paid under the RHC AIR methodology or FQHC PPS.

In the final 2025 PFS, CMS is finalizing the clarification that when RHCs and FQHCs provide dental services aligning with the requirements in the physician setting, these are considered qualifying visits and may be paid using the appropriate methodology. In addition, CMS is clarifying that RHCs and FQHCs are allowed to bill separately for inextricably linked dental services provided on the same day as a medical visit.

How CLA can help with financial impacts of the PFS

The changes to RHCs and FQHCs in the 2025 Physician Fee Schedule are significant and provide a wealth of opportunity for organizations to explore. With the removal of the 50% specialty services threshold, organizations should analyze how changing the mix of specialty and primary care services provided may impact clinic results. In addition, if your organization was limited by productivity standards after the public health emergency, it’s important to assess how removing these standards may impact payments in 2025.

Understanding the financial implications of these changes are key for effective planning, and can have a big impact on how your organization provides care to patients. CLA can help with financial modeling, as well as analysis of how regulatory changes may lead to opportunities. Reach out to an advisor today.

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