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Physicians take another gut punch with 3.4% cut to Medicare Physician Fee Schedule


Conversion factor of $32.7442 set for 2024, decreasing reimbursement despite record inflation

Physicians facing another Medicare Fee Schedule cut: ©Zimmytws - stock.adobe.com

Physicians facing another Medicare Fee Schedule cut: ©Zimmytws - stock.adobe.com

CMS released its 2024 Medicare Physician Fee Schedule, and as expected, physicians are looking at another payment cut.

The Medicare finalized conversion factor of $32.7442 is a 3.4% cut from 2023 rates, which in turn, were a 2% reduction from 2022. In contrast, the Medicare Economic Index, a measure of practice cost inflation, increased to 4.6%, the highest this century, which followed a 3.8% increase last year.

While the PFS only applies to Medicare reimbursement, many private payer contracts are tied to Medicare rates, so the cuts to Medicare reimbursement can also affect how much physicians collect from private payers.

In addition to the reimbursement reduction, other highlights of the fee schedule include:

  • Coverage and payment of telehealth services included on the Medicare Telehealth Services list will continue through 2024
  • Reimburses telehealth services furnished to patients in their homes at the non-facility – and typically higher -- PFS rate
  • Allows direct supervision by a supervising practitioner through real-time audio and video interaction telecommunications through 2024
  • Implements E/M add-on code G2211 and defines the substantive portion of a split (or shared) E/M visit to mean more than half of the total time spent by the physician or nonphysician practitioner or a substantive part of the medical decision making

“CMS remains steadfast in our commitment to supporting physicians and ensuring that people with Medicare have access to the care they need to stay healthy as well as navigate health conditions they are facing,” said CMS Administrator Chiquita Brooks-LaSure in a statement. “CMS is taking important steps toward those goals in this rule by improving payment for primary care and access to mental health care, paying for new navigation services to help people with cancer and other serious illnesses navigate their treatment, supporting family caregivers, paying for services involving community health workers to address health-related social needs that impact care, and enhancing access to dental care for people with certain cancers.”

There were also a number of changes to various quality programs and their criteria:

  • Maintains the performance threshold of 75 points for all three MIPS reporting options
  • Adds five new MIPS Value Pathways related to women's health, prevention and treatment of infectious disease, quality care in mental health/substance use disorder, quality care for ear, nose, and throat, and rehabilitative support for musculoskeletal care
  • Makes changes to the Medicare Shared Savings Program such as revising the MSSP quality performance standard, modifying the program’s benchmarking methodology, and determining beneficiary assignment
  • Ends the 3.5% APM Incentive Payment after the 2023 performance year/2025 payment year, and transitions to a Qualifying APM Conversion Factor in the 2024 performance year/2026 payment year.

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