2024 Medicare Physician Fee Schedule: Changes, Impact, and Updates


The 2024 Medicare Physician Fee Schedule, recently released by CMS, confirms the anticipated reduction in payments for physicians.

The finalized conversion factor of $32.7442 represents a 3.4% decrease from the 2023 rates, which themselves saw a 2% reduction from 2022. In contrast, the Medicare Economic Index, a gauge of practice cost inflation, surged to 4.6%, marking the highest increase this century, following a 3.8% uptick last year. It’s worth noting that while the PFS specifically pertains to Medicare reimbursement, many private payer contracts are linked to Medicare rates. As a result, the cuts in Medicare reimbursement can impact the overall compensation that physicians receive from private payers.

In addition to the reimbursement adjustments, some notable features of the fee schedule include:

  • Continuation of coverage and payment for telehealth services listed under Medicare Telehealth Services throughout 2024.
  • Reimbursement of telehealth services provided to patients in their homes at the non-facility rate, which is typically higher under the PFS.
  • Provision for direct supervision by a supervising practitioner via real-time audio and video interaction telecommunications through 2024.
  • Implementation of E/M add-on code G2211 and clarification of a substantive portion of a split (or shared) E/M visit, denoting more than half of the total time spent by the physician or non-physician practitioner, or a substantial part of the medical decision-making process.

The CMS Administrator emphasized the agency’s unwavering dedication to supporting physicians and ensuring that Medicare beneficiaries have access to necessary care for maintaining their health and managing their health conditions.

Furthermore, several alterations were made to various quality programs and their criteria, including:

  • Retaining the performance threshold of 75 points for all three MIPS reporting options.
  • Introducing five new MIPS Value Pathways centered on women’s health, prevention and treatment of infectious diseases, quality care in mental health/substance use disorder, quality care for ear, nose, and throat, and rehabilitative support for musculoskeletal care.
  • Implementing changes to the Medicare Shared Savings Program, including adjustments to the MSSP quality performance standard, modifications to the program’s benchmarking methodology, and determination of beneficiary assignment.
  • Discontinuation of the 3.5% APM Incentive Payment after the 2023 performance year/2025 payment year, with a shift to a Qualifying APM Conversion Factor in the 2024 performance year/2026 payment year.