Impact of the CMS Physician Final Rules on Physician Reimbursement
The Centers for Medicare and Medicaid Services (CMS) has reduced a certain amount in the conversion factor (CF), dropping the rate from $34.61 to $33.06. This change represents a $1.55 decrease compared to the 2022 rate. The finalization of this rule has sparked concern among numerous providers due to the anticipated impact on their businesses. This concern is amplified as they continue to recover from the repercussions of the pandemic and inflationary pressures.
However, in a contrasting perspective, CMS aims to reinforce support for behavioral health, chronic pain management, and substance use disorder treatments. This initiative aligns payment and coverage structures with the CMS Behavioral Health Strategy, which aims to eliminate barriers to care and services in these critical areas.
This rule presented a mixed scenario, eliciting varied reactions from industry stakeholders. Like this, CMS physician final rules for 2024 are also around the corner, encompassing regulations governing Medicare reimbursement and directives about the Quality Payment Program (QPP).
MPFS Payment Provisions
The reimbursement rates are assumed to be calculated by applying the statutory formula as required. This produces a fee schedule Conversion Factor (CF) of $32.7442, which is 3.37% lower than the $33.8872 CF used for the 2023 fee schedule and slightly lower than the $32.7476 rate included in the Proposed Rule earlier this year.
The CF calculation includes a 1.25% upward adjustment provided by the Consolidated Appropriations Act, 2023 (CAA 23), which was passed late in 2022 to help mitigate the effects of the formulaic calculation for 2023 and 2024. Without the CAA 23, the 2024 reimbursement rate would have been even lower. Note that the CAA 23 also included deferral until 2025 of the PAYGO rule that would lower the fee schedule by another 4%.
According to CMS, the activation of a new add-on code, G2211 for Evaluation and Management (E/M) complexity, is responsible for around 90% of the negative charge schedule modification. G2211's main policy objective is to more fairly compensate specific medical professionals, such as family doctors, for the care they give to extremely complex patients. In order to preserve budget neutrality, the CF had to be reduced by about 2% due to the large expected increase in spending that resulted from the utilization assumption for this new code. Although the largest reduction in any discipline is the -4 % total impact in IR reimbursement, the CMS-estimated impact for family medicine is +3%.
Quality Payment Program (QPP)
In the CMS physician final rules for 2024, some earlier proposed changes in the QPP were not adopted. The performance threshold for 2024 was initially suggested to rise to 82 points but will stay at 75, the minimum, to avoid payment penalties in 2026. Measure #436, crucial for radiology—“Radiation Consideration for Adult CT: Utilization of dose lowering techniques”—will persist in 2024 despite a proposal for its elimination. This measure holds significant value for radiologists due to its widespread use.
Category weights will not change from 2023 to 2025, but the Data Completeness Threshold will rise from 70% to 75% of the overall exam volume. For small practices with 15 or fewer doctors, the advantageous low-volume threshold conditions are unchanging for 2024. Furthermore, the payment adjustments range of +/- 9% will be maintained for 2026.
Despite radiology avoiding significant setbacks in the QPP, Medicare payments are still slated to decrease in 2024. This decline could have broader implications as many private payers base their reimbursements on the Medicare fee schedule, potentially affecting a wider scope than initially anticipated. The impact on your practice will vary based on your modality mix as procedure values undergo annual adjustments.
The impact of the CMS physician final rules for 2024 extends beyond financial considerations. These rules play a pivotal role in shaping the broader healthcare ecosystem. By incentivizing quality care, promoting innovative practices, and emphasizing patient-centric approaches, they influence the overall trajectory of healthcare delivery in the United States.
