CMS Releases CY 24 Medicare Physician Fee Schedule Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) has released the calendar year (CY) 2024 Revisions to Payment Policies Under the Physician Fee Schedule (MPFS) and Other Revisions to Medicare Part B (CMS-1784-P) Proposed Rule, which includes proposals related to Medicare physician payment and the Quality Payment Program (QPP).

The Proposed Rule, released on July 13, 2023, includes several health equity-focused coding and payment proposals for new services to help underserved communities. These include certain caregiver training programs, separate coding and payment for community health integration services, payment for principal illness navigation services, and coding and payment for social determinants of health risk assessments.

The Proposed Rule also includes payments for certain dental services before and during different cancer treatments, including chemotherapy. The agency also proposed several new behavioral health provisions to expand access to care. Marriage and family therapists and mental health counselors can enroll in Medicare and bill for their services for the first time.

For its Medicare Shared Savings Program (MSSP), CMS proposed new changes to promote whole-person care, including revisions to Accountable Care Organization (ACO) assignment methodology and financial benchmarking methodology.

In addition, the rule proposes delaying the implementation of a new policy under which the payment rate for split (or shared) evaluation and management visits would be based on the amount of time spent by the billing practitioner. The agency has also proposed the extension of several telehealth provisions, such as reimbursement at nonfacility rates for certain telehealth services in a patient's home.

The Proposed Rule is open for a 60-day comment period that will close on Sept. 11, 2023. The Final Rule with comment is expected to be issued in early November 2023.

To learn more about the Medicare Physician Fee Schedule Proposed Rule, review the following resources

• Proposed Regulations
• Press Release
• Fact Sheet

Key Proposals of Note

Notable proposals made by CMS in the rule include:

• extending flexibilities to permit split/shared evaluation and management (E/M) visits to be billed based on one of three components (history, exam or medical decision-making) or time through at least 2024
• amending the list of telehealth practitioners to recognize marriage and family therapists and mental health counselors as telehealth practitioners, effective Jan. 1, 2024
• reimbursing telehealth services furnished to patients in their homes at the typically higher, nonfacility progression-free survival (PFS) rate
• continuing to allow direct supervision by a supervising practitioner through real-time audio and video interaction telecommunications through 2024, including for Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs)
• continuing coverage and payment of telehealth services included on the Medicare Telehealth Services List through 2024
• causing implementation and rescinding the Appropriate Use Criteria program regulations
• increasing the performance threshold from 75 points to 82 points for all three Merit-Based Incentive Payment System (MIPS) reporting options
• adding five new MIPS Value Pathways related to women's health, prevention and treatment of infectious disease, quality care in mental health/substance use disorder, quality care for ear, nose and throat, and rehabilitative support for musculoskeletal care

Conversion Factor

CMS proposes an MPFS conversion factor (CF) of $32.75 for CY 2024, a 3.34 percent decrease from the current CF of $33.89. This reduction is due to a 2.18 percent decrease to maintain budget neutrality, which is partially offset by a 1.25 percent increase from the Consolidated Appropriations Act of 2023 (CAA). The original CY 2023 CF was $33.06 but increased to $33.89 from the CAA. The 3.34 percent decrease represents the difference between the proposed $32.75 CF and CY 2023 $33.89 CF. Table 104 in the Proposed Rule shows the impact by specialty, which varies based on several factors. Notably, the table does not reflect a statutory fix that decreased this year. Thus, the actual impact on specialties would be approximately 1.25 percent lower than what is shown in Table 104. Specialties that are negatively impacted include anesthesiology, interventional radiology, radiology, vascular and thoracic surgery, physical/occupational therapy and audiology.

Determination of Practice Expense Relative Value Units (RVUs)

CMS did not receive new wage data or other information for use in clinical labor pricing prior to the CY 2024 Proposed Rule, and thus proposes that CY 2024 clinical labor pricing be based upon CY 2023 pricing. For the second year, CMS seeks public comment on strategies to update practice expense data collection and methodology.

Add-On Complexity Code

Starting Jan. 1, 2024, CMS proposes a separate add-on payment for healthcare common procedure coding system (HCPCS) code G2211. The add-on code is designed to capture resource costs associated with E/M visits for primary care and longitudinal care of complex patients. The add-on code will generally be available for outpatient office visits. CMS estimates that, if the add-on code is finalized, it will have redistributive effects for all other 2024 payments. CMS finalized this policy in 2021, but Congress suspended its use and prohibited CMS from implementing it before 2024. Hence, CMS proposes implementing the policy this year, but with refinements that would result in a less significant negative budget neutrality adjustment.

The agency states that the code will not be payable when an office visit is reported with modifier 25 or bundled with another service. Also, the code "would not be appropriately reported, such as when the care furnished during the [office] E/M visit is provided by a professional whose relationship with the patient is of a discrete, routine, or time-limited nature," the agency states, offering examples including "treatment of a simple virus; for counseling related to seasonal allergies; initial onset gastroesophageal reflux disease; treatment for a fracture; and where comorbidities are either not present or not addressed."

Services for Health-Related Social Needs

CMS proposes coding and payment changes to account for the resources involved in a multidisciplinary team of clinical staff and other auxiliary personnel furnishing services. To accurately identify and value this work, CMS proposes separate payments for:

• Community Health Integration Services HCPCS Codes GXXX1 and GXXX2
• Social Determinants of Health (SDOH) Risk Assessment HCPCS code GXXX5
• Principal Illness Navigation (PIN) Services HCPCS codes GXXX3 and GXXX4

Community Health Integration services address unmet SDOH needs that affect a patient's diagnosis and treatment. Principal Illness Navigation services assist Medicare beneficiaries diagnosed with high-risk conditions like cancer and substance use disorder by matching them with appropriate clinical resources. The Proposed Rule also clarifies that community health workers, care navigators, peer support specialists and other auxiliary personnel may be employed by community-based organizations (CBOs) so long as the requisite supervision and billing requirements are met.

CMS also proposes coding and payment for SDOH risk assessments to account for the time and resources practitioners spend on these assessments that may impact patient care. The Proposed Rule recommends making the SDOH assessment optional in a patient's annual wellness visit.

Split/Shared Services E/M Visits

Under Medicare, a service can only be billed by one clinician, and if non-physician practitioners bill for a service, they only receive 85 percent of the total Medicare rate. The primary issue around split/shared services is deciding who provides the "substantive" portion of the service and can therefore bill for it. In the CY 2022 MPFS final rule, CMS created a policy that provided some flexibility for how that decision could be made. Specifically, the clinician who performed the history and physical exam, the clinician who performed the medical decision-making or the clinician who spent more than half of the total time spent with the patient could be selected as the clinician who provided the substantive portion of the split/shared service. In the future, however, CMS planned only to allow the third option (time) to be used to determine the substantive portion of a split/shared service. Last year, CMS delayed the transition to time-only until 2024.

CMS is again proposing to delay the implementation of changes to how split/shared E/M visits are billed. CMS intends to modify the definition of "substantive portion" to mean more than half of the total time of the visit, but those changes may now be delayed until at least Jan. 1, 2025. CMS plans to maintain current split billing rules, which means the billing provider needs to perform one of the three key components (history, exam or medical decision-making) or spend more than half of the total time performing the split visit.

Telehealth Extensions

The Proposed Rule implements all telehealth provisions extended through the end of 2024 by the Consolidated Appropriations Act of 2023. This includes:

• lifting geographic restrictions and maintaining the expanded list of originating sites, including a patient's home
• expanding the list of distant site practitioners to include physical therapists (PTs), occupational therapists (OTs), speech language pathologists (SLPs) and audiologists. Marriage and family therapists (MFTs) and mental health counselors (MHCs) will be recognized as telehealth practitioners effective Jan. 1, 2024
• extending telehealth to FQHCs and RHCs
• delaying until Jan. 1, 2025, the required in-person visit for telehealth mental health services
• extending audio-only telehealth

Revised Process for Adding Codes to the Telehealth Services List

CMS proposes to clarify and modify its process for making changes to the Medicare Telehealth List. In previous years services were added on a Category 1, Category 2 or Category 3 basis. Now that the COVID-19 public health emergency (PHE) is over, CMS proposes to clarify and modify its process for making changes to the Medicare Telehealth List. One goal is to distinguish services added to the telehealth list based on COVID-19 PHE-related authorities versus services added temporarily on a Category 3 basis, which do not rely on a PHE-related authority.

CMS will assign permanent or provisional status to any service that maps to the service elements of a permanent telehealth service or has evidence of clinical benefit when delivered via telehealth. Once provisional services have enough evidence of clinical benefit, they will be assigned permanent status. For CY 2024, CMS proposes that services currently added on a "temporary Category 2" or Category 3 basis will be assigned to the "provisional" category.

CMS also proposes temporarily adding health and well-being coaching services to the Medicare Telehealth List for CY 2024. Additionally, CMS proposes to permanently add a new code to the Medicare Telehealth List for the administration of standardized evidence-based SDOH Risk Assessments as long as the broader proposal for Medicare to pay for such risk assessments is finalized. More specifically, CMS is allowing a face-to-face encounter element of the SDOH risk assessment service to be performed via two-way interactive audio-video technology as a substitute for in-person interaction as long as the telehealth modality does not affect the accuracy or validity of the results gathered via a standardized screening tool. CMS also proposes that the practitioner furnish this service on the same date they furnish an E/M visit, as the SDOH assessment would be reasonable and necessary when used to inform the patient's diagnosis and treatment plan established during the visit.

Telehealth Payment Rates

CMS proposes to allow a higher nonfacility payment rate for telehealth services performed for patients at their homes. These services would be billed under the place of service (POS) code 10. CMS proposes, however, to return to its pre-pandemic policy of paying the lower facility-based rate for all telehealth services where patients are not located in their home. CMS believes that the cost of providing telehealth services, as reflected in the practice expense RVUs, is more accurately reflected by the nonfacility rate. Clinicians would be required to use POS 02 for these telehealth services.

Direct Supervision

CMS proposes to continue defining direct supervision to allow the supervising practitioner to be present through real-time audio and video interactive telecommunications through Dec. 31, 2024. CMS seeks comment on whether it should consider extending its definition of direct supervision to allow virtual presence after Dec. 31, 2024.

Request for Information on Digital Therapies

CMS requests information on the opportunities and challenges related to coverage and payment policies for digital therapies, as well as claims processing of remote therapeutic monitoring (RTM) and remote physiologic monitoring (RPM). Specifically, CMS asks for real-life examples of digital therapeutics (DTx) in practice models, the industry's standards for safety and privacy, and whether could be billed under existing remote therapeutic monitoring codes. CMS asks what aspects of DTx for behavioral health it should consider when evaluating whether to design a new Medicare benefit category.

Skin Substitutes

CMS is soliciting comments on how best to use sources of price information and various billing approaches as potential methods to establish appropriate payment for skin substitute products under the MPFS.

Mandated Manufacturer Refunds for Discarded Amounts of Refundable Drugs

CMS will provide annual reports to manufacturers with discard information. The initial refund report is proposed to be issued by Dec. 31, 2024. Manufacturers must pay refunds in 12-month intervals as specified by CMS. Payment deadlines will be determined in future rulemaking. Proposed changes in the refund calculation include using lagged claims data to revise refund amounts for updated quarters and apportioning refund responsibilities among multiple manufacturers based on sales volume. These changes align with the method used for inflation rebate obligations and would apply from CY 2023 onward.

The rule also proposes increasing the applicable percentage for drugs with unique circumstances. Two categories are proposed: drugs with low volume doses and rarely utilized orphan drugs. The Proposed Rule introduces an application process for manufacturers to request an increased applicable percentage for individual drugs with unique circumstances. Additionally, the proposal addresses the determination of discarded amounts and refund amounts, clarifies the use of the JW modifier for Medicare Advantage plans, makes technical changes to streamline the text, and requires the JZ modifier for drugs furnished but not administered by the billing supplier.

Medicare Shared Savings Program

CMS is proposing changes to the quality performance standard and reporting requirements under the Alternative Payment Model (APM) Performance Pathway (APP) within the QPP that "would continue to move ACOs toward digital measurement of quality and align with the QPP."

CMS proposes updating the definition of primary care services used for beneficiary assignment to remain consistent with billing and coding guidelines. Additionally, CMS is proposing to make refinements to the benchmarking methodology for ACOs beginning on Jan. 1, 2024, and in subsequent years "to cap the risk score growth in an ACO's regional service area when calculating regional trends used to update the historical benchmark at the time of financial reconciliation for symmetry with the cap on ACO risk score growth." Lastly, CMS is proposing to refine policies for advanced investment payments (AIPs) and make updates to "other programmatic areas including the program's eligibility requirements and make timely technical changes to the regulations for clarity and consistency."

CMS seeks comments on potential future developments to MSSP policies, mainly related to the ENHANCED track, refining the "three-way blended benchmark update factor" and the prior savings adjustment, and promoting ACO and community-based organization collaboration. 

Medicare Part B Payment for Preventive Vaccine Administration Services

CMS proposes to maintain the in-home additional payment for COVID-19 vaccine administration under the Part B preventive vaccine benefit. CMS also proposes to "extend the additional payment to the administration of the other three preventive vaccines included in the Part B preventive vaccine benefit – the pneumococcal, influenza and hepatitis B vaccines." CMS proposes to "limit the additional payment to one payment per home visit," even in cases of multiple vaccine administrations in one visit. CMS requests comment on this proposal and states that if this aspect is to be finalized, the in-home additional payment for the administration of pneumococcal, influenza and hepatitis B vaccines would be effective Jan. 1, 2024. Additionally, CMS states that the agency would apply a newly calculated Medicare Economic Index (MEI) percentage increase to update last year's $36.85 CY 2023 in-home additional payment amount for Part B preventive vaccine administration. Lastly, CMS states that the agency will not be "proposing any payment regulations regarding monoclonal antibodies for PreP of COVID-19 at this time."

Appropriate Use Criteria (AUC) for Advanced Diagnostic Imaging

CMS states that "having considered many rounds of input from interested parties, including internal and external experts, and diligent exploration of options, CMS believes that the real-time claims-based reporting requirement prescribed by section 1834(q)(4)(B) of the Act presents an insurmountable barrier for CMS to operationalize the AUC program fully."

CMS believes that "due to the inability of the Medicare claims processing system to automate claims processing edits that ensure only claims subject to the AUC program requirements as prescribed in section 1834(q) of the Act will be processed as such, returned or denied accordingly, CMS believes the inherent risks in terms of data integrity and accuracy, beneficiary access, and potential beneficiary financial liability for advanced diagnostic imaging services render the AUC program impracticable and have led us to a proposal to pause efforts to implement the AUC program for reevaluation and rescind current regulations." Specifically, CMS proposes to amend regulations to rescind the current regulations by removing the text of section 414.94 and reserving it for future use.

Updates to the Quality Payment Program

CMS reiterated the National Quality Strategy's focus on initiatives prioritizing health equity, outcome-based healthcare, and quality. CMS seeks comments about how QPP can improve healthcare for Medicare beneficiaries, particularly through implementing learnings from CMS Innovation Center models. Additionally, CMS released a request for information (RFI) on potential approaches to publicly reporting performance on MIPS cost measures and is seeking comments on how to modify policies to foster clinicians' continuous performance improvement.

For MIPS, CMS proposes:

• updating 12 existing MIPS value pathways and adding five new ones: Women's Health, Infectious Disease (Including HIV and Hepatitis C), Mental Health and Substance Use Disorder, Quality Care for Ear, Nose, and Throat, and Rehabilitative Support for Musculoskeletal Care.
• establishing the performance threshold for CY 2024 to be the mean final score across MIPS clinicians in CYs 2017–2019, which is 82 points.
• keeping performance category weights the same for performance year 2024/payment year 2026: 30 percent a piece for the quality performance cost performance categories, 15 percent for the improvement activities performance category and 25 percent for the promoting interoperability performance category.
  • Quality: CMS proposes requiring the use of the Spanish CAHPS survey, increasing the data completeness threshold to 80 percent starting in the performance year 2027 (payment year 2029), and changing the existing MIPS quality measure set by adding nine measures, removing 15 measures, modifying 75 measures and updating specialty sets.
  • Cost: CMS proposes adding episode-based cost measures for Depression, Emergency Medicine, Heart Failure, Low Back Pain, and Psychoses and Related Conditions and removing the episode-based cost measure for Simple Pneumonia with Hospitalization.
  • Improvement Activities: CMS proposes adding five new improvement activities (four of which are related to advancing health equity), modifying one existing improvement activity and removing three previously adopted improvement activities.
  • Promoting Interoperability: CMS proposes extending the performance period to from 90 to 180 days, making technical updates to existing measures and weighting the category at 0 percent for clinical social workers for performance year 2024.

Notably, CMS states most clinicians won't be able to meet the proposed new MIPS performance threshold. Further, for those seeking to transition to an advanced APM to avoid a MIPS penalty, it should be noted that it remains unclear if Congress will extend the 3.5 percent bonus for another year. For background, in December 2022, Congress extended availability of the advanced APM incentive payment for one year, allowing eligible clinicians to receive a 3.5 percent (down from the 5 percent) incentive payment in the 2023 performance year/2025 payment year.

Medicare Ground Ambulance Data Collection System (GADCS)

The Bipartisan Budget Act (BBA) of 2018 required CMS to implement regulations for a ground ambulance data collection system by Dec. 31, 2019. The GADCS portal went live on Jan. 1, 2023, and CMS has identified opportunities to improve it with the assistance of stakeholders. CMS proposes the following changes to the GADCS instrument:

• enabling partial year responses from ground ambulance organizations
• improving reporting consistency of hospital-based ambulance organizations through minor edits
• correcting four technical typos

Medicare Part A and B Payment for Dental Services

CMS proposes to codify previously finalized payment policies for dental services prior to or during head and neck cancer treatments, whether primary or metastatic. CMS also proposes to permit payment for certain dental services inextricably linked to other covered services used to treat cancer, including chemotherapy, chimeric antigen receptor (CAR) T-cell therapy and antiresorptive therapy. CMS does not anticipate a significant increase in overall spending and utilization under the MPFS for additional dental services performed prior to and during certain cancer treatments or drug therapies, given the historically low utilization of these therapies. CMS continues to seek comment on additional circumstances where evidence supports dental services as an integral part of the clinical success of covered medical services.

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