2023 Final Medicare Physician Fee Schedule

CMS has released the 2023 Final Medicare Physician Schedule.  The rule formally adopts many major changes for the upcoming year including:

  • Decrease in the conversion factor to $33.06
  • Adoption of the 2023 E/M changes for emergency department, hospital inpatient/observation, nursing and residential facilities, with certain exceptions:
    • CMS is creating new prolonged service codes which differ from CPT similar to their changes for prolonged services in the outpatient/office setting.
    • CMS is not adopting the AMA guidelines for initial and subsequent services.  The 2023 CPT rules contain coding guidance for services rendered by subspecialists.  However, CMS does not recognize subspecialties and defines an initial service as one that occurs when a patient has not received any professional services from the physician or other qualified health care professional or another physician or qualified health care professional of the same specialty who belongs to the same group practice during the stay.
    • CMS will continue its 8-24 hour rule which dictates when providers may report same day admission/discharge services and separately report an initial inpatient admission and discharge service.
    • CMS is not adopting the AMA guidelines for time based service coding.  Many CPT codes are reported based on the time spent as defined in the code descriptor.  The AMA’s general policy has been that a billable unit of service may be reported once the midpoint of time is achieved.  For example, if a CPT code descriptor is 30 minutes, the provider may report the code if at least 15 minutes have been spent.  CMS indicated last year with respect to critical care, that the full 30 minutes must be spent in order to report the service.  In the 2023 Final Rule, they have further clarified they expect the full time as defined in a CPT descriptor to be met in order to report the service. 
    • CMS is not adopting the AMA guidelines that allow services rendered in an office, emergency department or nursing facility on the same day the patient is admitted to inpatient or observation status to be separately reported with modifier 25.  CMS restated their policy that all services rendered by a physician (or another physician/qualified provider in the same group)  related to the admission are considered included in the admission when performed on the same day.
  • Delay to the split/shared visit rules which would have required time to be the substantive portion for all split/shared services beginning on January 1, 2023.  Instead, with the exception of critical care, providers will continue to have the option to to use history, exam or MDM as the substantive portion until January 1, 2024.
  • Modification of supervision requirements to allow certain behavioral health services to be rendered “incident to” under general supervision rather than direct supervision.
  • Addition of certain services as a part of a permanent expansion of telehealth.  It is worth noting telephone encounters will not be included in the permanent expansion and CMS will require all audio-only encounters to be reported with modifier 93.
  • Creation of new chronic pain management codes.
  • Updates to MIPS.

We recommend you read the entire Final Rule in order to identify all of the changes applicable to your practice.  These changes, particularly the E/M coding changes, are significant.  In order to successfully implement these changes within your organization, you will need to do the following prior to January 1:

  • Educate your clinical, coding and billing staff on the rules
  • Update documentation templates
  • Update your charge description masters and internal billing system edits
  • Update documentation and coding policies and procedures

The coding and compliance experts at HBE are available to assist you with these implementation efforts as well as follow up auditing and monitoring to validate compliance with the new rules.

The Fact Sheet is located here:  https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2023-medicare-physician-fee-schedule-final-rule

The Final Rule is located here:  https://www.cms.gov/files/document/cy2023-physician-fee-schedule-final-rule-cms-1770f.pdf

DISCLAIMER:  This newsletter contains only summary information and highlights; it should be read in conjunction with the full article or document provided as a link.  Any advice or recommendations are general and specific questions should be directed to professional counsel.

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