CMS’ CY 2024 Physician Fee Schedule Final Rule Released

IMPORTANT UPDATE: On March 9, 2024 the conversion factor was updated. View the updated 2024 nursing facility codes payment rates.

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On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY)  2024 Physician Fee Schedule (PFS) Final Rule that will take effect on January 1, 2024.

Below is a brief summary of selected items from the final rule that are of interest to Society members. We will further review the final rule and submit comments as needed.

Conversion Factor and Nursing Home Codes

For CY 2024, CMS is finalizing a conversion factor of $32.7442. This is a decrease from the CY 2023 conversion factor of $33.8872, which included the 2.5% increase for CY 2023 provided by Congress in the Consolidated Appropriations Act, 2023. This is different from previous years because Congress already put into law a 1.25% increase for CY 2024, which allows CMS to reflect that increase in the proposed rule.

Additionally, because of budget neutrality requirements under the PFS, CMS is making additional adjustments to the conversion factor to account for changes in the underlying values of codes and other policy changes. In sum, the proposed conversion factor is approximately -3.34% less than CY 2023. This reflects the -1.25% decrease in assistance from Congress, along with -2.17% adjustment for budget neutrality due to other policy changes in the proposed rule.

CMS provides the useful table below that explains the CY 2024 conversion factor.

TABLE 116: Calculation of the CY 2024 PFS Conversion Factor

*Please note that the table in the CY 2024 Final Rule indicates the wrong Conversion Factor. Please use this one.

Note that the change in the conversion factor and other policy changes in the final rule will affect each individual provider differently, depending on the codes billed and geographic area. The Society continues to advocate for Congress to ensure adequate reimbursement under the PFS. Unfortunately, these cuts coincide with the ongoing growth in the cost to practice medicine as CMS projects the increase in the Medicare Economic Index (MEI) for 2024 will be 4.6 percent. Physician practices cannot continue to absorb these increasing costs while their payment rates dwindle. This is why the Society, along with the American Medical Association and others, are continuing to advocate for strong support of H.R. 2474, the Strengthening Medicare for Patients and Providers Act, which would provide a permanent, annual update equal to the increase in the MEI and allow physicians to invest in their practices and implement new strategies to provide high-value care. Go here to send a message to Congress asking them to protect access to care.

Estimated Nursing Home Code Values for CY 2024

E/M Policy Provisions

CMS is implementing the G2211 complexity code, effective January 1, 2024. This policy will cause a significant redistribution of dollars/value in the fee schedule because of budget neutrality requirements. CMS now estimates this code will be billed with 38% of all Evaluation and Management (E/M) visits. CMS is seeking comments on these utilization assumptions and the application of this proposed policy for CY 2024.

For background, G2211 was created as part of CMS’ original overhaul of E/M codes that was proposed and finalized for CY 2021. G2211 is meant to provide additional reimbursement to providers performing E/M services on patients that are particularly complex. While CMS finalized G2211 in its final rule in December 2020, later that month Congress blocked implementation of G2211 until at least January 1, 2024, as part of mitigating the budget neutrality cuts being imposed across the PFS by the changes in the valuation in the E/M codes. On October 11, the GOP Doctors Caucus Co-Chairs, Reps. Greg Murphy (R-NC), Brad Wenstrup (R-OH), and Michael Burgess (R-TX), working closely with Ways and Means Committee Chairman Jason Smith (R-MO), released a discussion draft of legislation seeking to reform the budget neutrality policies applied to the Medicare physician payment schedule in 2025 and future years. The Society, along with other groups, recently sent a letter of support.

Implementation of the Updated Medicare Economic Index (MEI) for CY 2024

CMS is still delaying implementing the updated MEI payments in CY 2024. CMS continues to believe that delaying the implementation of the finalized 2017-based MEI cost weights for the relative value units (RVUs) is consistent with efforts to balance payment stability and predictability with incorporating new data through more routine updates.

If the implementation of the MEI weights were budget neutral, overall physician work payment would be cut by 7 percent, and professional liability insurance (PLI) payment would be reduced. These large shifts are principally due to a substantial error in CMS’ analysis of the U.S. Census Bureau’s Service Annual Survey (SAS), which omitted nearly 200,000 facility-based physicians. After correcting for this major omission, the physician work MEI weight would instead increase, and PLI would experience a much smaller reduction.  

Telehealth

CMS is finalizing implementation of several telehealth-related provisions of the Consolidated Appropriations Act, 2023 (CAA, 2023), including the temporary expansion of the scope of telehealth originating sites for services furnished via telehealth to include any site in the United States where the beneficiary is located at the time of the telehealth service, including an individual’s home; the expansion of the definition of telehealth practitioners to include qualified occupational therapists, qualified physical therapists, qualified speech-language pathologists, and qualified audiologists; the continued payment for telehealth services furnished by RHCs and FQHCs using the methodology established for those telehealth services during the COVID-19 PHE; delaying the requirement for an in-person visit with the physician or practitioner within six months prior to initiating mental health telehealth services, and again at subsequent intervals as the secretary determines appropriate, as well as similar requirements for RHCs and FQHCs; and the continued coverage and payment of telehealth services included on the Medicare Telehealth Services List (as of March 15, 2020) until December 31, 2024.

CMS is finalizing that, beginning in CY 2024, telehealth services furnished to people in their homes will be paid at the non-facility PFS rate to protect access to mental health and other telehealth services by aligning with telehealth-related flexibilities that were extended via the CAA, 2023.

CMS is also finalizing that they will continue to define direct supervision to permit the presence and immediate availability of the supervising practitioner through real-time audio and video interactive telecommunications through December 31, 2024. CMS believes that extending this definition of direct supervision through the end of 2024 aligns the timeframe of this policy with many of the previously discussed PHE-related telehealth policies that were extended under provisions of the CAA, 2023.

Collectively, these policies will continue many of the flexibilities put in place during the COVID-19 PHE for Medicare telehealth services through at least until the end of 2024. Telehealth services, both audiovisual and audio-only, have enabled individuals in rural and underserved areas to have improved access to care.

CMS is finalizing removal of the frequency limitations to Subsequent Nursing Facility Visit CPT Codes 99307-99310 through the end of 2024. So, until the end of 2024, these codes may be used as necessary under telehealth services without frequency limitations.

Split (or Shared) E/M Visits

Split (or shared) E/M visits refer to visits provided in part by physicians and in part by other nonphysician practitioners in hospitals and other institutional settings. For CY 2024, CMS is finalizing a revision to the definition of “substantive portion” of a split (or shared) visit to include the revisions to the Current Procedural Terminology (CPT) guidelines, such as that for Medicare billing purposes. The “substantive portion” means more than half of the total time spent by the physician or nonphysician practitioner performing the split (or shared) visit, or a substantive part of the medical decision-making. This responds to public comments asking that CMS allow either time or medical decision-making to serve as the substantive portion of a split (or shared) visit.

Read the pre-publication version of the final rule, Medicare & Medicaid Programs; CY 2024 Payment Policies under the Physician Fee Schedule & Other Changes to Part B Payment & Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Advantage; Medicare & Medicaid Provider & Supplier Enrollment Policies; and Basic Health Program.

Read CMS’ Press Release
Read CMS’ Fact Sheet