CMS Announces Final Rule Reducing Conversion Factor By $1.55

Sarasota, FL (WorkersCompensation.com) – While there has been some recent legislative efforts to prevent Medicare pay cuts to physicians, the Centers for Medicare & Medicaid Services (CMS) released its 2023 Medicare Physician Fee Schedule Final Rule yesterday announcing a cut in pay.

Earlier in the year, CMS proposed a decrease in the conversion factor from $34.61 to $33.08, representing the lowest conversion factor in 20 years and a decrease of 4.43 percent. The lowest conversion factor in 20 years was set at $33.97, which represented a 7.9 percent decrease from the previous year.

In the announcement made on last week, CMS has dropped the conversion factor even further than their original proposal from $33.08 to $33.06, a decrease of $1.55 and representing a 4.48 percent drop from the 2022 conversion factor of $34.61.

Last month, the American Medical Association announced that physician payments have dropped by 22 percent adjusted for inflation since 2001. With the decrease in the conversion factor, providers are scrambling to calculate what the reduction will mean for their individual practices as reimbursement for procedures is weighed against the conversion factor by RVU and practice expense. The American College Of Cardiology estimates the reduction will mean a 1 percent in Medicare revenue for cardiology services, but depending on specialty, the percentages could be drastically different.

In addition the reduction in payment, there are revised coding and updated guidelines for evaluation and management visits that impact cognitive impairment assessments, emergency departments, hospital inpatient and observation, and nursing homes and residence services. Some of the changes include new descriptor times, new guidelines for levels of medical decision-making, choice of medical decision-making, and elimination of history and exam to determine code level.

CMS also finalized a rule established in 2022 regarding shared or split evaluation and management visits. The policy determined which professional should bill for the “substantive portion” for more than half the total time. CMS has defined the “substantive portion” as comprised of history, physical exam, medical decision making, and time.

Telehealth is another area that is impacted, with CMS extending its use through 2023 in an effort to allow for additional time to collect data.

Changes were also made to behavioral health services, adding the exception to allow services to be provided under the general supervision of a physician or non-physician practitioner (NPP), rather than under direct supervision, when the services or supplies are furnished by auxiliary personnel. The changes are designed to improve access to care for mental health.

CMS also finalized new pain management HCPCS codes, G3002 and G3003 in an effort to improve payment accuracy and encourage providers to be more engaged with patient’s pain management.

You can read about more of the changes taking effect on Jan 1, 2023, in the CMS new release.

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