Breaking News: CMS Published Its Annual Payment Updates for Physicians for 2023

Breaking News: CMS Published Its Annual Payment Updates for Physicians for 2023

Breaking News: CMS has published its annual payment updates for physicians for 2023, and once again, reimbursements are cut by 4.5%.

On November 1, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that includes updates and policy changes for Medicare payments under the Physician Fee Schedule (PFS), and other Medicare Part B and Part D issues, in particular relating to drug cost, effective on or after January 1, 2023[1].

As we have noted in previous blogs, the days of Fee-For-Service (FFS) are going to be over, one way or another. During Covid-19, it was the FFS revenue cycle system, or as some call it, the ‘encounter-based’ system, that caused so many practices to go under financially.  Many practices were deep in the red because they could not obtain payment without an encounter with the patient, yet due to the quarantines and lockdowns, their office had to remain closed.

The U.S. Government advanced Medicare payments provide both forgivable and low interest loans. It was also this situation that put so much force behind the telemedicine portals where a physician could “encounter” a patient via audio, or audio and visual. Unfortunately, not all doctors were able to acquire or change their habits or practices quickly enough, and many Medicare patients were put off by using the computer to talk to the doctor. They still wanted to see and touch their doctor.  Medicare Advantage practices, having a more permanent relationship with patients were able to quickly pivot and accommodate the needs of their patients.

As stated by the American Medical Association (AMA): The rule includes updates to payment rates for physicians and other health care professionals for 2023, extends telehealth waivers and flexibilities, adopts evaluation and management (E/M) coding and payment changes, promotes coverage of behavioral health services, makes significant changes to the Shared Savings Program, revises policies for the 2023 performance year of the QPP, and includes many other provisions.

The AMA also noted that the “2023 physician fee schedule would create financial instability” for the US healthcare system in total, but ‘more focused on the Medicare beneficiaries’ access to providers. Yes, you read that correctly! The newly announced fee schedule “would create financial instability.”

Becker Hospital Review reported it this way.

  1. The conversion factor used to calculate physician reimbursement will decline by $1.55 to $33.06 in 2023, representing a 4.48% decrease. [Emphasis added.] CMS said the conversion factor accounts for the expiration of the 3 percent increase in physician fee schedule payments for 2022 — as required by the Protecting Medicare and American Farmers From Sequester Cuts Act — and the budget neutrality adjustment for changes in relative value units.
  2. The agency finalized several policies related to telehealth, including extending numerous temporarily available telehealth services during the public health emergency through at least 2023. CMS said this will provide more time to collect data that could support their inclusion as permanent additions to its telehealth services list.
  3. In response to the increasing demand for behavioral health services, CMS said it will allow these services to be provided under the supervision of a physician or nonphysician practitioner — rather than under direct supervision — when such services are provided by “auxiliary personnel,” such as licensed professional counselors or family and marriage therapists.
  4. In an update to the Medicare Shared Savings Program, providers new to the initiative that are not renewing or reentering as an ACO and qualify as low revenue can receive a one-time payment of $250,000 and quarterly payments for the first two years of a five-year period. The advance payments would be recouped once an ACO begins generating shared savings in their current and next agreement periods. CMS said it will not move to recoup money from ACOs that do not generate savings, but those ACOs must remain in the program for the full five years.

At the same time, individual physicians and the AMA reported their oppositions, the “National Association of ACOs (NAACOS) praised changes to the Medicare Shared Savings Program for 2023, which included providing more time to Accountable Care Organizations (ACOs) before they have to assume financial risk. The final rule also gave advance shared savings payments to ACOs that care for underserved communities. CMS said it expects these changes to increase participation in rural and underserved areas.”

The reality is that Medicare is focused clearly on making it impossible for individual physicians and smaller groups to continue on the FFS program deliberately driving them to Medicare Advantage programs, sponsored by the country’s largest insurance programs, or to ACOs, where there can be much more coordination of care.

Finally, the new rule made change to policies related to “telehealth” including extending some services that were expanded under the Trump Administration’s Presidential “Public Health Emergency” through 2023.

We continue to believe that FFS will effectively be eliminated, but for extreme or catastrophic care, and therefore more physicians will be driven to MSO/HMO/ACO type relationship. The second is that with the drive to remote patient monitoring (RPM) care, already underway before Covid-19, has been accelerated. RPM, with the use of Internet of Things (IoT) real time data and telemedicine can both reduce the cost of care, as well as leverage dwindling clinical resources and thereby be more responsive to patient needs. With the cost of care at this time over 21% of U.S. GDP, we clearly must do something if we are to maintain population, as well as individual health and wellness in this nation!

-Noel J. Guillama, Chairman