CMS Finalizes Medicare Physician Payment Cut


November 3, 2023

The Centers for Medicare and Medicaid Services (CMS) has finalized a cut to Medicare physician payments that will take effect on January 1, 2024, unless Congress intervenes to stop or mitigate the reduction.

The CY 2024 Medicare Physician Fee Schedule (PFS) final rule released on November 3 finalizes a 2024 conversion factor — the starting point for calculating physician payments — of $32.74, a decrease of $1.15 (or 3.37%) from the CY2023 conversion factor of $33.89. Roughly 90 percent of the cut is attributed to fee schedule budget neutrality requirements triggered by the impending January 1, 2024, implementation of G2211, an office/outpatient evaluation and management visit complexity add-on code.

This cut coincides with growth in practice costs, as CMS projects the increase in the Medicare Economic Index (MEI) for 2024 will be 4.6 percent. At the same time, the inflationary update for physician payments is statutorily set at zero through 2025.

ACOI members are encouraged to contact their members of Congress in support of H.R. 2474, the Strengthening Medicare for Patients and Providers Act, which would provide a permanent, annual update equal to the increase in the MEI. Take action now through ACOI’s Action Center.

Other highlights from the final rule on policies that were the subject of ACOI comments to the agency include:

  • CMS has finalized implementation of a separate add-on payment for HCPCS code G2211 — Visit complexity inherent to evaluation and management associated with medical care services that serve as the continuing focal point for all needed health care services and/or with medical care services that are part of ongoing care related to a patient's single, serious condition or a complex condition. (Add-on code, list separately in addition to office/outpatient evaluation and management visit, new or established). CMS is maintaining its estimated utilization assumption of the add-on code at 38 percent when initially implemented in 2024. ACOI had asked CMS to lower the assumption to mitigate the effects of budget neutrality on the conversion factor.
  • For CY 2024, CMS has finalized a revised policy — a policy supported by ACOI — for split (or shared) evaluation and management visits provided in part by physicians and in part by other non-physician practitioners in hospitals and other institutional settings. CMS has revised its definition of “substantive portion” of a split (or shared) visit to include the revisions to the Current Procedural Terminology guidelines, such that for Medicare billing purposes, the “substantive portion” means more than half of the total time spent by the physician or non-physician practitioner performing the split (or shared) visit, or a substantive part of the medical decision making.
  • CMS has finalized implementation of several telehealth-related provisions of the Consolidated Appropriations Act, 2023, including the temporary expansion of the scope of telehealth originating sites for services furnished via telehealth to include any site in the United States where the beneficiary is located at the time of the telehealth service, including an individual’s home.
  • CMS will also continue to allow teaching physicians to use audio/video real-time communications technology to be present when the resident furnishes Medicare telehealth services in all residency training locations through the end of CY 2024. This virtual presence will meet the requirement that the teaching physician be present for the key portion of the service.
  • Effective Jan. 1, 2024, Medicare Part B will pay the same additional payment amount to providers and suppliers that administer a pneumococcal, influenza, hepatitis B, or COVID-19 vaccine in the home. This additional payment amount will be annually updated. CMS also finalized its proposal to limit the additional payment to one payment per home visit, even if multiple vaccines are administered during the same home visit. Every vaccine dose that is furnished during a home visit will still receive its own unique vaccine administration payment.
  • CMS has finalized its proposal to allow the entirety of Diabetes Self-Management Training services to be furnished via telehealth.
  • CMS did not finalize its proposal to increase the performance threshold to avoid a penalty in the Merit-based Incentive Payment System from 75 points to 82 points. Instead, the performance threshold will remain at 75 points in 2024 — a position supported by ACOI.

ACOI is analyzing the final rule and will share more details in the November issue of ACOinfo.

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