2025 Medicare Fee Schedule Increases Are Coming
What You Need to Know
The Centers for Medicare & Medicaid Services (CMS) has released the 2025 fee schedule update in Transmittal 12991 of the CMS Manual System. Transmittal 12991 states:
- For (a) prostheses and (b) orthoses not subject to competitive bidding, fees will increase by 2.4%.
- For off-the-shelf orthoses provided in areas that were part of Competitive Bidding Round 2021, fees will increase by 2.9%.
- For off-the-shelf orthoses provided in areas that were not part of Competitive Bidding Round 2021, fees will also increase by 2.9%.
- Rural fee schedule amounts are determined by the specific zip code of the rural area.
While Transmittal 12991 does not reference sequestration, it is our understanding that Medicare will deduct a sequestration amount of 2% from final Medicare payment as in years past.
Transmittal 12991 also states that the labor codes for orthotic claims (L4205) and prosthetic claims (L7520) will increase by 3% in 2025. The labor code updates take effect on January 1st, but will not be added to the DMEPOS fee schedule file until the April 2025 quarterly update.
You can access the different files containing the 2025 fee schedule updates here.
What this Means for You
Make sure that you understand the impact of the 2025 fee schedule adjustments on your business. And be aware that the annual update amount for some of the same orthotic/bracing codes might be different if you operate in different geographies (e.g., a former Round 2021 Competitive Bidding Area, a non-CBA area, and a rural area).
Lastly, while Medicare created several new L-codes for both orthotic and prosthetic devices in the 2024 second-half coding cycle, none of those new codes are yet included in the 2025 fee schedule. This means that those codes will get added in future quarterly fee schedule updates once Medicare has finalized those new fee schedule amounts. We will update you regarding any such changes as that information becomes available.