CMS Finalizes Updates to the Physician Fee Schedule

Published November 13, 2023

On November 2, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that includes updates to payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Payment Schedule effective on January 1, 2024. The AANEM policy staff is diligently reviewing the 3,000+ page rule and addenda, but here are a few highlights from the rule:

  • Conversion Factor—CMS finalized the 2024 Medicare conversion factor (CF) at $32.7442, a decrease of $1.143 or 3.37% from the 2023 CF of $33.8872. This decrease is the result of a 1.25% reduction in the temporary update to the conversion factor under current law and a negative budget neutrality adjustment stemming in large part from the adoption of an office visit add-on code, discussed below. This decrease in the CF will result in reduced reimbursement for all physicians across all specialties who bill Medicare. AANEM, along with the AMA and hundreds of specialty societies, continues to advocate for Congress to avert this payment cut as well as implement an inflationary update for physicians before the end of the year. AANEM has joined multiple letters and advocacy efforts to address this reduction.

  • Despite comments from AANEM, the AMA, and other specialty societies, CMS has finalized a new E/M code, G2211. G2211 will be used for “visit complexity inherent to evaluation and management (E/M) associated with medical care services that are part of ongoing care related to a patient’s single, serious condition or a complex condition” as an add-on code. Code G2211 will not allow for payment when reported on the same date as an E/M visit reported with modifier 25. Despite objections from multiple specialty societies, including AANEM, that the code is ambiguous and that there is uncertainty about when to report it, CMS did not further reduce the utilization estimate or the associated budget neutrality impact of this new code which will impact all physicians regardless of whether they can use the new code or not.

  • Split (or Shared) Visits—In response to advocacy efforts from AANEM and others, CMS revised its definition of “substantive portion” of a split or shared visit to reflect the revision of the Current Procedural Terminology (CPT) E/M guidelines. For 2024, the definition of “substantive portion” means more than half of the total time spent by the physician and qualified health professional (QHP) or a substantive part of the medical decision making as defined by CPT.

  • Telehealth—CMS is implementing the telehealth flexibilities that were included in the Consolidated Appropriations Act 2023 (CAA) by waiving the geographic and originating site requirements for Medicare telehealth services through the end of calendar year (CY) 2024. Also, per the CAA, CMS is extending payment for the CPT codes for audio-only telehealth services. For 2024, CMS is also establishing policy to continue paying for telehealth services provided to patients in their homes at the non-facility payment rate, which is the same rate as in-person office visits.

  • Merit-Based Incentive Payment System (MIPS)—Due to strong advocacy efforts, including AANEM’s, CMS did not finalize its proposal to increase the performance threshold to avoid MIPS penalty from 75 to 82 points. Under the original proposal by CMS, it was estimated that approximately 46% of MIPS eligible clinicians would receive a negative payment adjustment of up to -9% in 2026. Under the final rule this reduction estimates that approximately 22% of MIPS eligible clinicians would receive a negative payment adjustment.

Look for the upcoming AANEM Edge in February for a more detailed analysis of the policies updated in the Physician Fee Schedule and the Quality Payment Program (QPP) that could impact AANEM members. If you have questions or concerns about the final rule, you can email the policy department at