Anticipated Decrease in Medicare Reimbursement for Physicians in 2024


The Final Decrease Is Influenced By Add-On Codes and Regulatory Obligations

On November 16th, the Centers for Medicare & Medicaid Services (CMS) released the finalized rule for the 2024 Medicare Physician Fee Schedule (MPFS) in the Federal Register. While the policies exhibit several positives, especially in primary care, telehealth, and behavioral healthcare, CMS remains dedicated to addressing systemic issues highlighted during the pandemic and implementing reforms post-COVID public health emergency (PHE).

However, numerous clinicians may experience reduced earnings owing to regulatory demands and the 2024 rate-setting. The most impacted group will likely be eligible clinicians not actively engaged in the Quality Payment Program (QPP).

Adjustments to Rates and Conversion Factor for 2024

In July, CMS initially proposed a 3.34-percent reduction to the conversion factor (CF). However, in the final ruling, the agency went further, decreasing the CF by 3.37 percent, translating to $32.7442 or $1.15 less than the 2023 CF of $33.89. Taking into account quality reporting initiatives, CMS expects an overall payment rate decrease of 1.25 percent under the CY 2024 MPFS, as outlined in the final ruling.

Multiple factors, including federal laws, budget constraints, and expiring legislation, contribute to the CF decrease for CY 2024.

In response to the significant CY 2023 pay cut outlined in the Consolidated Appropriations Act, 2023 (CAA, 2023), Congress devised a dual approach: a 2.5-percent statutory payment increase for CY 2023 and a 1.25-percent payment adjustment for CY 2024.

However, healthcare executives from Health Policy Consultants, affiliated with law firm McDermott Will & Emery, emphasized that the necessary reductions to address the changes from CAA, 2023, are not the sole cuts CMS made to the CY 2024 CF. They clarified in the firm’s Regs and Eggs blog that CMS implemented an additional 2.1 percent cut to maintain budget neutrality. This cut largely stemmed from CMS’s decision to introduce the same complexity add-on code initially planned for CY 2021, delayed by Congress until CY 2024.

Section 1115 of the Social Security Act mandates CMS to enact budget-neutrality adjustments to physician payment rates.

The AMA Provides Input

When the proposed rule for the CY 2024 MPFS was released in July, the American Medical Association (AMA) advocated for federal consideration of inflation, costs, and the repercussions of COVID-19. However, these factors were not taken into account, leading the trade group to suggest potential adverse effects on patients.

AMA President, stated in a release regarding the final rule that the impending Medicare payment cuts are deemed ‘excessively deep, unrelenting, and they impact both physicians and patients’ lives.

Grasp the Revised Definition for Split/Shared Visits

Initially proposing a delay in revising the definition of the ‘substantive portion’ for split/shared E/M visits until 2025, CMS reversed course and chose to redefine it for CY 2024 to align with the AMA’s CPT® guidelines.

According to CMS, the ‘substantive portion’ now denotes more than half of the total time spent by the physician or nonphysician practitioner during the split (or shared) visit, or a significant portion of the medical decision-making process. This change reflects responses to public comments, accommodating either time or medical decision-making as the substantive portion of a split (or shared) visit

Introducing G2211 for Visit Complexity in 2024

Keeping its commitment, CMS introduced the HCPCS Level II add-on code G2211, focusing on visit complexity inherent in evaluation and management linked to medical care services serving as the ongoing focal point for necessary healthcare services. This includes services related to a patient’s singular, serious condition, or a complex condition. (The add-on code is listed separately in addition to office/outpatient evaluation and management visits, whether new or established.) This change takes effect from January 1, 2024.

Reimbursements for Oral or Dental Infections

Additionally, CMS approved its plan to reimburse specific dental services, encompassing dental or oral examinations conducted as part of a comprehensive assessment preceding medically necessary diagnostic and treatment services aimed at eradicating an oral or dental infection before or alongside the administration of high-dose bone-modifying agents (antiresorptive therapy) used in cancer treatment.

Commencing January 1, 2024, these services will fall under Medicare Part A and Part B coverage.