2024 Medicare Physician Fee Schedule Proposed Rule


On July 13, 2023, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule seeking public feedback on proposed policy changes for Medicare payments under the Physician Fee Schedule (PFS) and other Medicare Part B issues.

These changes are set to take effect on or after January 1, 2024. The proposed rule for CY 2024 PFS is part of a larger effort by the current administration to create a more equitable healthcare system that improves access to care, quality, affordability, and innovation.

Background on the Physician Fee Schedule

Medicare has used the Physician Fee Schedule (PFS) to pay for physicians’ and other billing professionals’ services since 1992. These services are provided in a variety of settings, including hospitals, physician offices, skilled nursing facilities, hospices, and outpatient dialysis facilities. Medicare makes payments to physicians and other professionals at a single rate for most services furnished in a physician’s office. However, PFS rates paid to physicians in facility settings, such as hospital outpatient departments (HOPDs) or ambulatory surgical centers (ASCs), only reflect the portion of resources typically incurred by the practitioner in providing the service.

For many diagnostic tests and a limited number of other services under the PFS, separate payment may be made for the professional and technical components of services. The technical component is often billed by suppliers such as independent diagnostic testing facilities and radiation treatment centers, while the professional component is billed by the physician or practitioner.

Payments are based on the relative resources typically used to furnish the service. Relative value units (RVUs) are applied to each service for work, practice expense, and malpractice expense. These RVUs become payment rates through the application of a conversion factor. Geographic adjusters are also applied to the total RVUs to account for variation in costs by geographic area. Payment rates are calculated to include an overall payment update specified by statute.

CY 2024 PFS Rate setting and Conversion Factor

The proposed rule for the Calendar Year (CY) 2024 Medicare Physician Fee Schedule aims to reduce overall payment rates by 1.25% compared to CY 2023, as mandated by law. Additionally, CMS is proposing substantial payment increases for primary care and various forms of direct patient care.

Under the proposed rule, the CY 2024 PFS conversion factor would be set at $32.75, representing a decrease of $1.14 (or 3.34%) from the current CY 2023 conversion factor of $33.89.

Caregiver Training Services

In the proposed rule for Calendar Year (CY) 2024, CMS is suggesting the implementation of a payment system for practitioners who provide training and involve caregivers in assisting patients with specific diseases or illnesses, such as dementia, in following their treatment plans. These services would be reimbursed when delivered by physicians, non-physician practitioners (such as nurse practitioners, clinical nurse specialists, certified nurse-midwives, physician assistants, and clinical psychologists), or therapists (including physical therapists, occupational therapists, or speech language pathologists) as part of an individualized treatment plan or therapy plan of care.

This proposal aligns with the recent Executive Order on Increasing Access to High-Quality Care and Supporting Caregivers issued by the Biden-Harris Administration. If approved, this initiative would enhance support for Medicare beneficiaries by providing better training for caregivers.

Services Addressing Health-Related Social Needs (Community Health Integration Services, Social Determinants of Health Risk Assessment, and Principal Illness Navigation Services)

The proposed rule for Calendar Year (CY) 2024 includes coding and payment changes aimed at improving the recognition of resources involved in providing patient-centered care through a multidisciplinary team of clinical staff and auxiliary personnel. These proposed services align with the HHS Social Determinants of Health Action Plan and support the implementation of the Biden-Harris Cancer Moonshot goal, ensuring that every American with cancer has access to covered patient navigation services.

Specifically, CMS is proposing separate payment for Community Health Integration (CHI), Social Determinants of Health (SDOH) Risk Assessment, and Principal Illness Navigation services. This payment adjustment acknowledges the resources required when clinicians involve community health workers, care navigators, and peer support specialists in delivering necessary care. While these care support staff have previously been able to provide covered services incidentally to Medicare-enrolled billing physicians or practitioners, the proposed codes represent the first specifically designed to describe services involving community health workers, care navigators, and peer support specialists.

Community Health Integration (CHI) and Principal Illness Navigation (PIN) services involve person-centered assessments to gain a deeper understanding of the patient’s life circumstances, care coordination, contextualizing health education, developing patient self-advocacy skills, facilitating health system navigation, promoting behavioral change, providing social and emotional support, and facilitating access to community-based social services to address unmet social determinants of health (SDOH) needs. Community Health Integration services aim to address unmet SDOH needs that impact the diagnosis and treatment of the patient’s medical conditions, while Principal Illness Navigation services aim to assist Medicare beneficiaries diagnosed with high-risk conditions, such as mental health conditions, substance use disorders, and cancer, in identifying and connecting with appropriate clinical and support resources. CMS also clarifies that community health workers, care navigators, peer support specialists, and other auxiliary personnel may be employed by Community-Based Organizations (CBOs) as long as they receive the necessary supervision from the billing practitioner, similar to other care management services.

Beyond recognizing the costs associated with patient-centered care, access to these services could contribute to equity, inclusion, and improved access to care for the Medicare population, leading to better patient outcomes—particularly in Rural Health Clinics (RHCs), Federally Qualified Health Centers (FQHCs), underserved areas, and low-income populations where disparities in quality care access exist. The proposed rule also includes coding and payment for SDOH risk assessments to acknowledge the time and resources practitioners invest in evaluating SDOH factors that may affect their ability to treat the patient effectively. Additionally, CMS proposes adding the SDOH risk assessment as an optional, additional element with an associated payment to the annual wellness visit. Furthermore, there are proposed codes and payment for SDOH risk assessments performed on the same day as an evaluation and management visit.

Evaluation and Management (E/M) Visits

Effective from January 1, 2024, CMS is proposing the implementation of a separate add-on payment for HCPCS code G2211 to improve recognition of resource costs associated with evaluation and management visits for primary care and the longitudinal care of complex patients. This add-on code would specifically apply to outpatient office visits, providing an additional payment to acknowledge the inherent costs incurred by clinicians when treating a patient with a single, serious, or complex chronic condition over time. If approved, the establishment of payment for this add-on code would have redistributive impacts on all other CY 2024 payments, as required by statutory budget neutrality requirements.

Originally, CMS finalized this policy in the CY 2021 Medicare Physician Fee Schedule final rule. However, Congress suspended the use of the add-on code until January 1, 2024, by prohibiting CMS from making additional payments under the PFS for these inherently complex E/M visits. Considering the potential improvement in payment accuracy for primary and longitudinal care, CMS is proposing the implementation of this policy in the upcoming year.

While seeking feedback from interested parties during earlier rulemaking, CMS has proposed refinements to the policy based on the information received. These refinements address concerns regarding our utilization assumptions and the estimated redistributive impact of the code on PFS payments. As a result, the proposed changes have reduced the redistributive impacts of this policy. Specifically, we are proposing that the add-on code should not be billed with a modifier indicating an office or outpatient evaluation and management visit that is already separate from another service (such as a procedure where complexity is already recognized in the valuation). Additionally, we have adjusted our utilization estimates for HCPCS code G2211 in response to public feedback. These refinements collectively lessen the redistributive impact on the CY 2024 Conversion Factor (CF) by nearly one third of the estimated impact mentioned in the CY 2021 Medicare Physician Fee Schedule final rule.

Split (or Shared) Evaluation and Management (E/M) visits

Split (or shared) E/M visits pertain to visits conducted in institutional settings, such as hospitals, where both physicians and other practitioners are involved in providing care. In the proposed rule for CY 2024, CMS suggests delaying the implementation of the definition of the “substantive portion” as being more than half of the total time until at least December 31, 2024. Instead, CMS proposes to maintain the current definition of the substantive portion for CY 2024. This definition allows for the use of either one of the three key components (history, exam, or medical decision making) or more than half of the total time spent to determine which healthcare professional can bill for the visit.

Telehealth Services under the PFS

In the proposed rule for CY 2024, CMS suggests several changes and expansions regarding telehealth services under the Medicare Physician Fee Schedule (PFS).

Firstly, CMS proposes adding health and well-being coaching services temporarily to the Medicare Telehealth Services List for CY 2024. Additionally, Social Determinants of Health Risk Assessments would be added permanently to the list.

CMS also proposes implementing a refined process for evaluating requests to add services to the Medicare Telehealth Services List. This process would determine whether requested services should be added permanently or provisionally.

Furthermore, CMS aims to implement various telehealth-related provisions of the Consolidated Appropriations Act, 2023 (CAA, 2023). These provisions include temporarily expanding the scope of telehealth originating sites to include any location in the United States where the beneficiary is located, expanding the definition of telehealth practitioners, continuing payment for telehealth services by RHCs and FQHCs, delaying in-person visit requirements for mental health telehealth services, and continuing coverage and payment of telehealth services listed on Medicare Telehealth Services List until December 31, 2024.

Regarding telehealth services furnished in patients’ homes, CMS proposes that, starting from CY 2024, these services be paid at the non-facility PFS rate. This proposal aims to protect access to mental health and other telehealth services by aligning with the telehealth-related flexibilities extended through the CAA, 2023.

CMS also proposes continuing the definition of direct supervision to allow the presence and immediate availability of the supervising practitioner through real-time audio and video interactive telecommunications until December 31, 2024. Input is sought from interested parties regarding the potential extension of the virtual presence beyond December 31, 2024, and any associated patient safety or quality concerns.

Overall, if finalized, these proposed policies would maintain many of the telehealth flexibilities that practitioners have had during the Public Health Emergency (PHE) until the end of 2024, as required by statutory regulations. Telehealth services, including both audiovisual and audio-only options, have proven valuable in improving access to care for individuals in rural and underserved areas.

Telehealth Services Furnished in Teaching Settings

To align with telehealth policies extended under the CAA, 2023, CMS proposes allowing teaching physicians to use audio/video real-time communications technology for Medicare telehealth services furnished by residents in all residency training locations until the end of CY 2024. This virtual presence would satisfy the requirement of the teaching physician’s presence during the crucial portion of the service. CMS seeks comments on other clinical treatment situations where virtual presence of the teaching physician may be appropriate, which could be considered for finalization in the CY 2024 PFS final rule.

Payment for Outpatient Therapy Services, Diabetes Self-Management Training (DSMT), and Medical Nutrition Therapy (MNT) when Furnished by Institutional Staff to Beneficiaries in Their Homes Through Communication Technology

In relation to CMS waivers and flexibilities during the COVID-19 public health emergency (PHE), institutional providers are currently allowed to bill for telehealth services remotely, and CMS proposes to continue this practice until the end of CY 2024 for outpatient therapy, DSMT, and MNT services. CMS is also seeking input on the effectiveness of remote services compared to in-person delivery.

Behavioral Health Services

For CY 2024, CMS is implementing Section 4121 of the CAA, 2023, which grants Medicare Part B coverage and payment for services provided by marriage and family therapists (MFTs) and mental health counselors (MHCs) when billed by these professionals. CMS is also proposing to allow addiction counselors who meet MHC requirements to enroll as MHCs in Medicare. Furthermore, CMS is making changes to Behavioral Health Integration codes to enable MFTs and MHCs to provide integrated behavioral health care in primary care settings.

CMS is also implementing Section 4123 of the CAA, 2023, which mandates the establishment of new HCPCS codes for psychotherapy crisis services furnished in applicable sites of service. The payment amount for these services would be 150% of the fee schedule amount for non-facility sites of service for specified psychotherapy codes.

Additionally, CMS is proposing to expand the billing eligibility for Health Behavior Assessment and Intervention (HBAI) services to include clinical social workers, MFTs, and MHCs, in addition to clinical psychologists. This change aims to enhance the integration of physical and behavioral health care.

CMS is proposing an adjustment to the work relative value units (RVUs) for timed behavioral health services under the PFS. This adjustment would address potential distortions in valuing time-based behavioral health services and would be implemented gradually over a four-year transition.

Regarding hospice interdisciplinary groups, CMS proposes to allow social workers, MHCs, or MFTs to serve as members of the group, in line with the requirements established by Section 4123 of the CAA, 2023. CMS also intends to update the definitions for these professionals, who are already eligible to provide services at RHCs and FQHCs.

CMS is interested in expanding access to behavioral health services and invites comments on digital therapies, including digital cognitive behavioral therapy.

Opioid Treatment Programs (OTPs)

CMS proposes to extend flexibilities for audio-only periodic assessments provided by OTPs until the end of CY 2024. OTPs would be permitted to bill Medicare under the Part B OTP benefit for furnishing periodic assessments via audio-only telecommunications when video is not available and all other applicable requirements are met. This extension aligns with telehealth flexibilities authorized for other settings under the CAA, 2023.

Supervision Policy for Physical and Occupational Therapists in Private Practice

CMS proposes a regulatory change to allow general supervision instead of direct supervision by physical and occupational therapists in private practices for remote therapeutic monitoring (RTM) services. CMS also seeks comments on potentially revising the direct supervision policy for all services provided by therapists’ assistants, not just for RTM services, to allow general supervision. Feedback is requested on the impact of such a policy change on patient quality of care, patient safety, and utilization.

Diabetes Self-Management Training (DSMT) Services Furnished by Registered Dietitians (RDs) and Nutrition Professionals

CMS proposes to amend the regulatory provision to clarify that an RD or nutrition professional must personally perform medical nutrition therapy (MNT) services. However, when acting as the DSMT certified provider, an enrolled RD or nutrition professional may bill for the entire DSMT entity, regardless of which professional delivers each aspect of the services.

Telehealth Proposals for DSMT Services

Currently, the Medicare Claims Processing Manual requires a portion of the DSMT benefit to be furnished in person to facilitate effective injection training for insulin-dependent beneficiaries. However, CMS recognizes changes in clinical standards and best practices due to expanded use of telehealth during the COVID-19 PHE. CMS proposes to eliminate the regulatory prohibition on providing the full DSMT service via telehealth to accommodate clinically appropriate injection training. This proposal aims to improve access to DSMT services, which have been shown to enhance care for individuals with diabetes.

Dental and Oral Health Services

CMS is proposing to codify payment policies for dental services prior to, or during, head and neck cancer treatments, as well as dental services inextricably linked to other covered cancer treatments such as chemotherapy, CAR-T Cell therapy, and high-dose bone modifying agents. These proposals aim to improve the success of cancer-related treatments and increase access to dental care in these circumstances. CMS seeks comments on other scenarios where evidence supports dental services being integral to the clinical success of covered medical services.

Skin Substitutes

CMS requests comments on incorporating skin substitutes as a supply within the PFS rate setting methodology.

Provisions from the Inflation Reduction Act Relating to Drugs and Biologicals Payable Under Medicare Part B

CMS addresses several provisions from the Inflation Reduction Act, including changes to payment limits and beneficiary out-of-pocket costs for certain drugs payable under Part B. Proposed regulatory changes cover payment limits for new biosimilars, payment limits for biosimilars with an average sales price (ASP) not exceeding the reference biological, beneficiary coinsurance for rebatable drugs based on inflation-adjusted payment amounts, and cost limitations for insulin furnished through durable medical equipment (DME).

Drugs and Biologicals that are Not Usually Self-Administered by the Patient, and Complex Drug Administration Coding

CMS seeks comments on coverage exclusions for drugs usually self-administered by the patient and coding/payment policies for complex non-chemotherapeutic drugs. The goal is to promote coding and payment consistency and improve patient access to infusion services.

Requiring Manufacturers of Certain Single-Dose Container or Single-Use Package Drugs to Provide Refunds with Respect to Discarded Amounts

CMS proposes policies to implement provisions related to refunds for discarded amounts of single-dose container or single-use package drugs. The proposed changes include timelines for refund reports, calculation methods for refunds, and an application process for manufacturers requesting increased applicable percentages for drugs with unique circumstances.

Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)

In this proposed rule, we suggest making regulatory text changes to align with Sections 4113 and 4121 of the CAA, 2023. These changes aim to extend payment for telehealth services provided by RHCs and FQHCs until December 31, 2024. We also propose to delay the in-person requirements for Medicare-covered mental health visits furnished by RHCs and FQHCs. Additionally, we propose including marriage and family therapists (MFTs) and mental health counselors (MHCs) as eligible for payment.

Furthermore, we propose allowing addiction counselors who meet the requirements of MHCs to enroll with Medicare as MHCs. This would align the definitions established for MFTs and MHCs under the PFS with RHCs and FQHCs. Consequently, addiction counselors fulfilling the requirements of MHCs would be permitted to enroll as MHCs with Medicare.

Additionally, under Section 4124 of Division FF of the CAA, 2023, Medicare coverage and payment for intensive outpatient program (IOP) services furnished by an RHC or FQHC would be established. Details regarding the implementation proposals will be described in the CY 2024 Outpatient Prospective Payment System rule.

To align with policies finalized under the PFS during last year’s rulemaking for other settings, we propose changing the required level of supervision for behavioral health services furnished “incident to” a physician or non-physician practitioner’s services in RHCs and FQHCs. This change would allow general supervision instead of direct supervision.

We also propose including remote physiologic monitoring and remote therapeutic monitoring in the general care management HCPCS code G0511 when these services are provided by RHCs and FQHCs. Additionally, we suggest including Community Health Integration (CHI) and Principal Illness Navigation (PIN) services in the same HCPCS code. RHCs and FQHCs providing CHI and PIN services would be able to bill these services using HCPCS code G0511, either alone or in conjunction with other payable services on an RHC or FQHC claim, effective January 1, 2024.

To better account for the frequency of service utilization, we propose changing the methodology used to calculate the payment rate for HCPCS code G0511.

Lastly, we clarify that for beneficiary consent regarding Chronic Care Management and virtual communications services, the sequencing and mode of consent can vary and direct supervision is not required.

Clinical Laboratory Fee Schedule: Revised Data Reporting Period and Phase-In of Payment Reductions

In accordance with section 4114 of the CAA, 2023, we propose making certain conforming changes to the data reporting and payment requirements for clinical diagnostic laboratory tests (CDLTs). Specifically, we suggest updating the regulatory definitions of the “data collection period” and “data reporting period.” For the data reporting period from January 1, 2024, to March 31, 2024, the data collection period would be from January 1, 2019, to June 30, 2019. We also propose revisions to indicate that data reporting begins on January 1, 2017, and is required every three years starting in January 2024. Additionally, we propose conforming changes to the requirements for the phase-in of payment reductions, reflecting the amendments in section 4114(a) of the CAA, 2023. This entails revising the regulations to ensure that payment for applicable CDLTs is not reduced in CY 2023 compared to the payment amount established in CY 2022. Furthermore, for CYs 2024 through 2026, payment reductions may not exceed 15% compared to the payment amount established for the preceding year.

Ambulance Fee Schedule: Ambulance Extenders Provisions

Section 4103 of the CAA, 2023 extended three existing add-on payments to the ambulance base and mileage rates under the Ambulance Fee Schedule until December 31, 2024. Consequently, CMS is revising the regulations at 42 CFR §414.610(c)(1)(ii) and 414.610(c)(5)(ii) in this proposed rule to align with the existing law.

Medicare Ground Ambulance Data Collection System (GADCS)

Under the Bipartisan Budget Act (BBA) of 2018, Section 50203(b) required CMS to finalize regulations for a ground ambulance data collection system by December 31, 2019. This legislation also mandated CMS to identify the providers and suppliers required to submit information annually through 2024 and no less than once every three years thereafter. The purpose of the Medicare Ground Ambulance Data Collection System (GADCS) is to collect cost, revenue, utilization, and other relevant information from ground ambulance service providers and suppliers. This data collection aims to evaluate the relationship between reported costs and payment rates. The GADCS portal became operational on January 1, 2023, enabling CMS to collect this information and provide the data to MedPAC for its report to Congress. Through stakeholder engagement, CMS has identified opportunities to improve the GADCS instrument. Accordingly, CMS proposes several changes to the instrument, including addressing partial year responses from ground ambulance organizations, enhancing reporting consistency for hospital-based ambulance organizations, and making four technical corrections to resolve typos.

Medicare Part B Payment for Preventive Vaccine Administration Services

In June 2021, CMS introduced an additional payment for administering COVID-19 vaccines at home, which was initially implemented during the Public Health Emergency (PHE). CMS has observed that this payment has enhanced vaccine accessibility for underserved Medicare populations. Based on this positive impact, CMS proposes to maintain the additional payment for in-home administration of COVID-19 vaccines. Furthermore, CMS suggests extending this additional payment to cover the administration of three other preventive vaccines under the Part B preventive vaccine benefit: pneumococcal, influenza, and hepatitis B vaccines when administered at home.

Under this proposal, effective January 1, 2024, the payment amount for administering all four vaccines would be the same. Medicare Part B will provide an identical additional payment amount to providers and suppliers for administering pneumococcal, influenza, hepatitis B, or COVID-19 vaccines at home. This additional payment will be annually updated based on the percentage increase in the Medicare Economic Index and adjusted for geographic cost differences. CMS proposes to limit the additional payment to one payment per home visit, even if multiple vaccines are administered during the same visit. Each vaccine dose administered during a home visit will still receive its own unique vaccine administration payment.

Appropriate Use Criteria (AUC) for Advanced Diagnostic Imaging Program

CMS proposes pausing the implementation of the Appropriate Use Criteria (AUC) program for reevaluation and intends to rescind the existing AUC program regulations at 42 CFR 414.94. CMS will continue its efforts to identify a feasible implementation approach and will propose any such approach through future rulemaking.

Request for Information (RFI) on the Histopathology, Cytology, and Clinical Cytogenetics Regulations under the Clinical Laboratory Improvement Amendments (CLIA) of 1988

CMS is seeking comments regarding Histopathology, Cytology, and Clinical Cytogenetics areas of CLIA. The current requirements for these areas have not been updated since 1992. Input from stakeholders is crucial to help CMS address new innovative technology and current laboratory practices in anatomic pathology and Clinical Cytogenetics.

The Medicare Diabetes Prevention Program (MDPP)

CMS proposes extending the MDPP Expanded Model’s Public Health Emergency Flexibilities for four more years. This extension would allow all MDPP suppliers to continue offering MDPP services virtually through distance learning delivery until December 31, 2027, as long as they maintain an in-person Centers for Disease Control and Prevention organization code. Additionally, CMS suggests simplifying MDPP’s current performance-based payment structure by permitting fee-for-service payments for beneficiary attendance.

Medicare and Medicaid Provider and Supplier Enrollment

CMS proposes several regulatory provisions regarding Medicare and Medicaid provider enrollment. These provisions include, but are not limited to, the following:

  • Introducing a new Medicare provider enrollment status called “stay of enrollment” to alleviate the burden on providers and suppliers while strengthening Medicare program integrity.
  • Requiring all Medicare provider and supplier types to report any additions, deletions, or changes in their practice locations within 30 days.
  • Establishing various new and revised Medicare denial and revocation authorities.
  • Clarifying the duration for which a Medicaid provider will remain in the Medicaid termination database.