As the year is almost to an end, the Center for Medicare & Medicaid Services (CMS) has issued a final rule that includes updates and policy changes for Medicare payments under the Physician Fee Schedule (PFS), and other Medicare Part B issues, effective on or after January 1, 2023. This rule will take effect in the Calendar Year (CY) 2023. This rule is one of several rules that reflect a broader Administration-wide strategy to create a more equitable health care system that results in better accessibility, quality, affordability, and innovation.
CMS has finalized a series of standard technical proposals involving the practice expense, that includes the implementation of the second year of the clinical labor pricing update. They also included a comment solicitation seeking public input as they develop a more consistent, predictable approach to incorporating new data in setting PFS rates. Per statutory requirements, they are also updating the data that they use to develop the geographic practice cost indices (GPCIs) and malpractice RVUs.
With the adjustments of the budget neutrality that is required by law to ensure payment rates for individual services don't result in changes to estimated Medicare spending, the required statutory update to the conversion factor for CY 2023 of 0%, and the expiration the 3% supplemental increase to PFS payment for CY 2022, the final CY 2023 PFS conversion factor is $33.06, a decrease of $1.55 to the CY 2022 PFS conversion factor of $34.61.
With regards to the Evaluation and Management (E/M) visit codes and related coding guidelines that are intended to reduce administrative burden, the AMA CPT Editorial panel approved revised coding and updated guidelines for other E/M visits effective January 1, 2023. This revised coding and documentation framework includes CPT code definition changes including:
They finalized the proposal to maintain the current billing policies that apply to the E/Ms while they consider potential revisions that might be necessary in future rulemaking. They also finalized the creation of Medicare-specific coding for payment of other E/M prolonged services, similar to what CMS adopted in CY 2021 for payment of Office/Outpatient prolonged services.
Although there is an increase in Medical reimbursement and establishment of a new provider type, the hospital groups say it is not enough. With the medicare reimbursement increasing by 3.8% that reflects a hospital market basket increase of 4.1% and a 0.3 percentage point decrease for productivity. This is higher than the 2.7% update included in the proposed rule earlier this year. A blow-back of 2.7% from the proposed payment rate increase may have played a role in the finalized amount of 3.8%.
The Executive Vice President of American Hospital Association Stacey Hughes said, "We are deeply concerned about CMS' proposed payment update of only 2.7%, given the extraordinary inflationary environment and continued Labor and supply cost pressures hospitals and health systems face." Adding, Hughes said in the AHA's OPPS final rule statement, "While the AHA is pleased that the CMS will provide hospitals and health systems with an improved update to outpatient payments next year compared to the agency's proposal in july, the increase is still insufficient given the extraordinary cost pressures hospitals face from Labor, supplies, equipment, drugs, and other expenses. As we urged, CMS will use more recent data in its calculations on the payment update, resulting in more accurate data that better reflects the historic inflation and tremendous financial pressures hospitals and health systems have confronted recently. However, hospitals are still dealing with a wide range of challenges in providing care, which is why the AHA is urging Congress for additional support by the end of the year."
CMS administrator Chiquita Brooks-LaSure said in a press release that "CMS is committed to expanding access to care in rural communities and ensuring people with Medicare get high-quality care they need." "Through the establishment of Rural Emergency Hospitals (REH), supporting clinic visits at rural sole community hospitals and enabling people with Medicare to remotely access behavioral health services in their homes. Today's actions promote patient safety, equity, and quality for these underserved communities." Brooks-LaSure added.
These REHs can help critical access hospitals and small rural hospitals avoid closure and maintain access to care in rural and underserved communities. The rule finalized proposals related to REH payment, covered services, conditions of participation, and quality measurements.
Adding to this, we can't forget the turmoil facing 340B payments. In the OPPS final rule, CMS solidified the payment policy for 2023 of average sales price of 6% for drugs and biologicals acquired through the 340B program because of a unanimous Supreme Court decision earlier this year.
Robin Damschroder, the CFO for Henry Ford Health shared with Health Leaders the impact that these regulatory updates hav3 on hospitals.
"There's a lot of pressure- as there always has been- on reimbursement rates. Henry Ford Health system and a lot of folks rely on 340B discounts and other mechanisms like disproportionate share payments. We're a big teaching institution, so a lot of these special payments that we do in order to teach the healthcare leaders of the future or make sure that we can take care of vulnerable patients are extremely important. So, that is an area that we and others are actively-in our advocacy- ensuring that these programs stay intact or evolve to a place that enhances the programs for the people that we are trying to care for." Damschroder said.
The struggle that our Healthcare system is always in. May our leaders don't stop finding solutions for all of us to have better healthcare.