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Highlighting the 2023 Proposed Rule for Medicare’s Physician Fee Schedule

Updated: Sep 26, 2023

Earlier this month, Medicare issued its proposed rule for the calendar year 2023 Physician Fee Schedule (MPFS). At just over 2,000 pages, the proposed rule contains much information pertinent to medical providers and their employers. To simplify the process of digesting the proposed rule, this edition of Insights InHealth summarizes a few of the key changes that will materially impact the operations of medical groups, building on recurring themes we have covered in the past. To facilitate your review of the rule in the federal register, we have provided page references in [brackets] throughout this document.


Changes to Work Relative Value Units (wRVUs) for Inpatient Evaluation and Management (E/M) Services


Based on surveys of provider work time associated with inpatient evaluation and management services, CMS has updated the wRVUs associated with the main hospital inpatient and observation evaluation and management codes. While the wRVUs of associated with some codes have decreased, the wRVUs of the codes more frequently billed by hospital-based providers have increased. The table below summarizes the proposed changes to the main hospital E/M current procedural terminology (CPT) codes (99221 – 99239 from [pages 267-8]).

CPT Code

2022 wRVUs

2023 wRVUs

Change

99221

1.92

1.63

-0.29

99222

2.61

2.60

-0.01

99223

3.86

3.50

-0.36

99231

0.76

1.00

0.24

99232

1.39

1.59

0.20

99233

2.00

2.40

0.40

99234

2.56

2.00

-0.56

99235

3.24

3.24

0.00

99236

4.20

4.30

0.10

99238

1.28

1.50

0.22

99239

1.90

2.15

0.25

These changes will have a material impact on the production of hospital-based practices, especially hospitalists. Hospitalist providers receiving compensation on a per wRVU basis will see net increases in pay given the change. However, we note that the proposed MPFS rule contains a decrease in the conversion factor, so the net impact likely will be an increase in practice losses (as most hospitalist practices require financial support from hospitals) should compensation be paid on a pure wRVU production basis. To model the projected impact of the wRVU changes for hospitalist practices, we evaluated Medicare’s utilization data reported for hospitalist physicians and compared the change from 2022 wRVUs to 2023 wRVUs. Overall, as shown in the table below, we are estimating an increase of about 10% in wRVUs given historical patterns of Medicare utilization.

CPT Code

2021 Utilization

2022 wRVUs

2023 wRVUs

Percent Change

99221

59,772

114,762

97,428

-15%

99222

311,773

813,728

810,610

0%

99223

1,310,815

5,059,746

4,587,853

-9%

99231

228,461

173,630

228,461

32%

99232

3,368,759

4,682,575

5,356,327

14%

99233

3,377,548

6,755,096

8,106,115

20%

99234

2,163

5,537

4,326

-22%

99235

8,080

26,179

26,179

0%

99236

16,207

68,069

69,690

2%

99238

289,655

370,758

434,482

17%

99239

1,246,328

2,368,024

2,679,606

13%

Total

10,219,561

20,438,105

22,401,077

10%

Introduction of Remote Therapeutic Monitoring (RTM) Services


The proposed MPFS establishes new G-Codes for remote therapeutic monitoring services [pages 404-412]. The billing for these services is similar in structure to reimbursement for remote patient monitoring (RPM) and chronic care management (CCM). In contrast to these services, RTM involves review and monitoring of data related to signs, symptoms, and functions of a therapeutic response. While CCM services pertain to an ongoing, persistent condition that requires regular medical attention and RPM pertains to the monitoring of physiologic data, RTM pertains to the tracking and management of non-physiologic data (e.g., respiratory system status, musculoskeletal system status, therapy adherence, therapy response).


An example of this service, detailed by the American Medical Association RVS Update Committee was as follows: An eight-year-old presents to the physician’s or other qualified health care professional’s office with exacerbation of asthma. The physician or other qualified health care professional initiates a remote therapeutic monitoring program to support therapeutic management through data collection and monitoring. Outside of this use case, we are aware of systems that can be used to track and aid the progress of post-operative therapy plans (e.g., tracking musculoskeletal system status in the form of phone applications that measure range of motion).


Changes to Telemedicine Reimbursement Rules


[start on page 76] As a result of the public health emergency associated with the COVID-19 pandemic, Medicare created a new category (Category 3) of telehealth services that granted temporary approval to bill existing CPT codes furnished through telemedicine. These Category 3 telehealth services were reimbursed given the limitations imposed as a result of the pandemic (e.g., inability for in-person services during quarantines). Prior to this change, in order to bill for services furnished though telehealth, a service must have been demonstrated to be similar to existing allowed telehealth services (Category 1) or must have been proven (in clinical studies) to meaningfully improve access to care, reduce complications or future medical interventions, reduce treatment/ recovery time, or decrease pain of other disease symptoms (Category 2). Category 3 services have allowed Medicare to gather data to determine if services should be moved into Categories 1 or 2 after the public health emergency. In the proposed rule, CMS stated: “We found that none of the requests…met our Category 1 or Category 2 criteria for permanent addition to the Medicare Telehealth Services List.” However, CMS did allow for newly created services to be added to Category 1, as summarized in the table below [page 102].

CPT Code

Short Descriptor

GXXX1

Prolonged inpatient or observation services by physician or other qualified health provider (QHP)

GXXX2

Prolonged nursing facility services by physician or other QHP

GXXX3

Prolonged home or residence services by physician or other QHP

Furthermore, Category 3 services were allowed to remain on the approved list through the end of calendar year 2023. On the other hand, certain services, as highlighted in the table below, will be pulled from the approved list at the end of the public health emergency; these services will be allowed to be reimbursed for 151 days after the expiration of the PHE [page 104].

Finally, CMS added the following services to the Category 3 list [page 101].

During the PHE, CMS waived certain requirements associated with billing for telemedicine services: limitations around the originating site of service, limitations around the types of providers eligible to perform telemedicine services, requirements for in-person services within six months of certain telemedicine services, and requirements for interactive (i.e., audio-video versus audio-only) technology to bill for telemedicine services. These waivers will expire 152 days after the end of the PHE. Furthermore, CMS reimbursed at the higher “non-facility” rate (relative to the “facility” rate) for telemedicine services during the PHE. Effective 152 days after the end of the PHE, CMS will revert to reimbursing at the facility rate for all telemedicine services, with some exceptions for mental health services, assessments for ESRD patients receiving home dialysis, and substance use disorder treatment in the patient’s home.


Certain services can be provided by non-physician providers incident to the services of the billing physician. These services required direct supervision of the non-physician providers by the billing physician, including the immediate availability of the physician. During the PHE, this immediate availability could be secured through virtual presence via telemedicine technology. However, after the end of the calendar year in which the PHE expires, virtual presence will no longer suffice as enabling immediate availability (although CMS is soliciting comment as to whether this flexibility should exist for a subset of services).


For detail about the other proposed changes to telehealth services we encourage you to review this article.


Key Changes to Behavioral Health and Pain Management Reimbursement Policies

Shift from Direct to General Supervision

[Pages 233-235] Recognizing the shortage of mental health providers and significant need to expand access to these services, CMS is proposing to loosen restrictions around billing Medicare for behavioral health services by non-physician/advanced practice providers. CMS is proposing that behavioral health services can be furnished under general supervision of the physician (or other practitioner) when these services or supplies are provided by auxiliary personnel incident to the services of a physician (or other practitioner). The physician (or other practitioner) supervising the auxiliary personnel need not be the same physician (or other practitioner) who is treating the patient more broadly. However, only the supervising physician (or other practitioner) may bill Medicare for incident to services. The shift to general supervision will allow billing providers the flexibility to establish care teams of behavioral health professionals to staff mental health services more efficiently.

Behavioral Health Integration Services

[Pages 236-240] CMS recognizes the established and successful use of clinical psychologists and clinical social workers to provide ongoing coordination of care related to behavioral health services, beyond the medical care performed by physicians and other advanced practice providers. These Behavioral Health Integration (BHI) services include care management support and inter-specialty care coordination. CMS is proposing a new code, GBHI1, which will require the following elements: an initial assessment or follow-up monitoring including: utilizing validated rating scales for assessment, behavioral health care planning and revisions in relation to behavioral/psychiatric health problems, facilitating and coordinating treatment, and ensuring continuity of care. This service would be billed for at least 20 minutes of care on a monthly basis and may be furnished incident to the billing professional’s services under general supervision.

Chronic Pain Management Services

[pages 214-227] Given the need to address pain management, including the nation’s overdose crisis, CMS is proposing to establish new CPT codes for chronic pain management (CPM) services. Given past success with chronic care management codes, CMS is proposing to establish two new codes, GYYY1 and GYYY2, which respectively correspond to:

  • A monthly bundle of chronic pain management and treatment, including: diagnosis, assessment and monitoring, pain rating, care plan management, care coordination, medication management, and ongoing communications. These services would require an initial 30-minute face-to-face assessment by a physician or qualified health care professional. Subsequent monthly visits would require at 30 minutes of direct care time but need not be face-to-face.

  • Add-on services for each 15 minutes of additional chronic pain management and treatment by a physician or other qualified health care professional.

While the proposed services do not contemplate services incident to the billing provider, CMS is seeking comment as to the need for/appropriateness of such services and whether direct or general supervision is required. CMS’s initial intent is for these codes to be billed by a patient’s primary care provider, but allows for more than one provider (e.g., pain specialists) but no more than two to bill for these services in the same calendar month for the same beneficiary.

Medicare Shared Savings Program (MSSP) Changes


[Discussion starts on page 624] The proposed rule incorporated a large number of potential changes to the MSSP and associated Accountable Care Organizations (ACOs). We have highlighted some changes pertinent to our prior spotlight on CMS’s initiatives to advance health equity and address social determinants of health. The proposed rule contains a large number of additional changes (e.g., formulas related to rate benchmarking), which are not addressed in this article.

Advance Investment Payments (AIP) Program

[Page 634] CMS is proposing to develop a program for MSSP participants called “Advance Investment Payments” (AIP). This program is similar to the prior MSSP ACO Investment Model (AIM), which targeted prepayments of potential shared savings to MSSP participants located in rural or small markets for the purpose of helping to finance the start-ups for forming ACOs. CMS noted that AIM successfully achieved the goal of reducing healthcare costs without diminution in care quality for geographic areas with limited ACO participation at inception. With AIP, CMS’s stated goal is to incentivize providers in underserved markets to participate in the MSSP and form ACOs. The table below summarizes key elements of the AIP program.

Health Equity Adjustment to ACO MIPS Scoring

[Page 738] CMS is proposing a health equity adjustment of up to 10 bonus points (with no penalty) to an ACO’s MIPS quality performance score based on achieving high quality measure performance and providing care to a higher proportion of underserved or dual-eligible beneficiaries. The method for calculating these points relies on multiplying: (i) the overall performance score for associated quality measures by (ii) an “underserved multiplier” and capping the resulting product at 10 points. The underserved multiplier is a proxy for the proportion of ACO beneficiaries that are in underserved communities. It is the greater of: (i) the proportion of assigned beneficiaries residing in a census block with an area deprivation index national rank of at least the 85th percentile or (ii) the proportion of assigned beneficiaries that are dually-eligible for Medicare and Medicaid. As we have discussed prior, the area deprivation index serves as a measure for quantifying the degree of social risk in a given geographic area. Since the performance score is used to determine the degree of savings share with ACOs, this adjustment has the ability to financially reward those ACOs who deliver high quality care in challenging markets.

SDoH Metrics in ACO MIPS Scoring

[Page 795] As we highlighted in a prior edition of Insights InHealth, CMS has asked hospitals to report two measures pertaining to social determinants of health for the Hospital Inpatient Quality Reporting program. The measures relate to reporting: (1) the rate of screening patients for information about social determinants of health (called: “Screening for Social Drivers of Health”), and (2) the rate of positive responses by patients regarding the presence of social determinants impacting health (“Screen Positive Rate for Social Drivers of Health”). CMS is proposing to include the Screening for Social Drivers of Health measure as part of the Merit-based Incentive Payment System used to evaluate the performance of providers and compensate [Page 1174]. In addition, to align the physician (PFS MIPS) and hospital (IPPS IQR) reimbursement systems with the MSSP, CMS is soliciting comments on including the Screening for Social Drivers of Health and Screen Positive Rate for Social Drivers of Health measures as part of the MSSP Alternative Payment Model Performance Pathway.


2023 Proposed MPFS Article
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