CMS Issues 2023 Physician Fee Schedule Final Rule
- November 10, 2022
On Tuesday, November 1, 2022, the Centers for Medicare & Medicaid Services (CMS) issued the 2023 Medicare Physician Fee Schedule (MPFS) Final Rule. The MPFS details the rules and metrics through which CMS has administered and reimbursed physicians and other healthcare providers for Medicare Part B services since 1992.
Medicare payments to physicians and other healthcare providers are based on the relative resources typically required to provide a given service. Within the MPFS, CMS details all the services covered by Medicare for which healthcare providers may be reimbursed. Each service is assigned Relative Value Units (RVUs) related to work effort, practice expense, and malpractice expense. These RVUs may be modified for specific situations through set modifier adjustments, and geographic adjustments may also be applied to account for variations in provider costs, practice expenses, and malpractice costs in different geographic areas across the country. RVUs are converted into payments by using a Conversion Factor (CF).
Each year, CMS releases updates to the RVUs, CF, and policies contained within the MPFS. In the following sections, we highlight several updates from the release of the MPFS Final Rule for 2023.
CMS is tasked with ensuring any changes to the MPFS are budget neutral. However, Congress may pass temporary increases to Medicare payments. Congress has elected to do this over the last two years because of the impact of the Public Health Emergency (PHE) and substantial changes CMS made to the 2021 MPFS that would otherwise have resulted in a substantial decrease to the CF, and therefore reimbursement, for a wide swath of provider specialties. With the expiration of Congressional supplemental increases to MPFS payments for 2022, the CF will decrease by approximately 4.5 percent, from $34.61 per RVU to $33.06 per RVU.
Evaluation and Management (E/M) Changes
The MPFS contains a significant revaluing of “other E/M” visit codes (including hospital inpatient, hospital observation, ED, nursing facility, home or residence services, and cognitive impairment assessment), similar to the changes made for outpatient E/Ms in the 2021 MPFS.
Hospital-based specialties tended to be some of the hardest hit by the 2021 MPFS changes, taking the full brunt of a declining CF without any increase in RVUs from outpatient E/Ms to offset the reduced reimbursement rate. The 2023 MPFS should now help correct the reimbursement outlook for hospital-based specialties or at least lessen the impact of another CF reduction next year.
Our consulting services include provider compensation planning and fair market value (FMV) analyses. Because many hospital-based physicians are on shift-based compensation plans, the E/M changes will likely not be as impactful on FMV issues related to compensation arrangements as the 2021 changes on outpatient E/Ms were. However, this update will still have broad ramifications within our industry.
Split (or Shared) E/M Visits
For 2023 (as in 2022), clinicians who furnish split (or shared) visits will continue to be able to determine who should bill for the shared visit based on their choice of using history, physician exam, medical decision-making, or more than half of the total time. In 2024, the substantive portion will be based on total time only. You have one more year to prepare for this change!
CMS is again extending the list of services made temporarily available as telehealth services for the PHE either through December 31, 2023, or 151 days following the end of the PHE, whichever is later. (The deadline is still subject to potential further extensions.) The extended deadline will allow additional time to collect data that may support including telehealth services as a permanent addition to the Medicare Telehealth Services List.
CMS has also made several changes for certain specialty-specific services, such as behavioral health, chronic pain management, opioid treatment programs, audiology services, dental and oral health, and others. CMS also finalized several rules specific to Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs).
We also note that with the MPFS final rule, CMS included changes to the Medicare Shared Savings Program (MSSP) and Quality Payment Program (QPP), which consists of an expansion of MIPS Value Pathways and revisions to APMs. For further insights on these topics, we have included helpful links at the end of the article.
We never experience a dull moment in the healthcare industry! Our summary aims to communicate some key changes in the 2023 MPFS Final Rule. We will continue to monitor these changes and provide added insights as we receive them.
Our team is eager to assist you in understanding and preparing for the impact on reimbursement resulting from MPFS changes. If your organization has not yet fully transitioned from the 2020 MPFS, consider undergoing an impact assessment to understand how implementing the most recent MPFS may affect your organization directly.
We strongly recommend preparing now for the upcoming changes to split/shared E/M visits, as we believe this could be as broadly impactful to organizations as the 2021 outpatient E/M changes.
Matthew Jensen, ASA