Calendar Year (CY) 2023 Medicare Physician Fee Schedule Proposed Rule
On July 7, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that announces and solicits public comments on proposed policy changes for Medicare payments under the Physician Fee Schedule (PFS), and other Medicare Part B issues, effective on or after January 1, 2023.
The calendar year (CY) 2023 PFS proposed rule is one of several proposed rules that reflect a broader Administration-wide strategy to create a more equitable health care system that results in better accessibility, quality, affordability, and innovation.
Background on the Physician Fee Schedule
Since 1992, Medicare payment has been made under the PFS for the services of physicians and other billing professionals. Physicians’ services paid under the PFS are furnished in a variety of settings, including physician offices, hospitals, ambulatory surgical centers (ASCs), skilled nursing facilities and other post-acute care settings, hospices, outpatient dialysis facilities,
clinical laboratories, and beneficiaries’ homes. Payment is also made to several types of suppliers for technical services, most often in settings for which no institutional payment is made.
For most services furnished in a physician’s office, Medicare makes payment to physicians and other professionals at a single rate based on the full range of resources involved in furnishing the service. In contrast, PFS rates paid to physicians and other billing practitioners in facility settings, such as a hospital outpatient department (HOPD) or an ASC, reflect only the portion of the resources typically incurred by the practitioner in the course of furnishing 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 frequently billed by suppliers, like 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 (geographic practice cost index) are also applied to the total RVUs to account for variation in practice costs by geographic area. Payment rates are calculated to include an overall payment update specified by statute.
CY 2023 PFS Ratesetting and Conversion Factor
We are proposing a series of standard technical proposals involving practice expense, including the implementation of the second year of the clinical labor pricing update. We have also included a comment solicitation seeking public input as we develop a more consistent, predictable approach to incorporating new data in setting PFS rates. We hope to implement changes that will promote transparency and predictability in payment amounts. Per statutory requirements, we are also updating the data that we use to develop the geographic practice cost indices (GPCIs) and malpractice RVUs.
With the budget neutrality adjustments, as required by law to ensure payment rates for individual services don’t result in changes to estimated Medicare spending, the required statutory update to the conversion factor for CY 2023 of 0%, and the expiration of the 3% increase in PFS payments for CY 2022, the proposed CY 2023 PFS conversion factor is $33.08, a decrease of $1.53 to the CY 2022 PFS conversion factor of $34.61.
Updated Medicare Economic Index (MEI) for CY 2023
We are proposing to rebase and revise the MEI cost share weights for CY 2023. We are soliciting comments regarding the rebasing and revision of the MEI, which measures the input price pressures of providing physician services. We are proposing a new methodology for estimating base year expenses that relies on publicly available data from the U.S. Census Bureau NAICS 6211 Offices of Physicians. This proposed methodology allows for the use of data that are more reflective of current market conditions of physician ownership practices, rather than only reflecting costs for self-employed physicians, and will allow for the MEI to be updated on a more regular basis.
Using the new MEI cost weights to set PFS rates would not change overall spending on PFS services, but would likely result in significant changes to payments among PFS services. In consideration of our ongoing efforts to update to the PFS payment rates with more predictability and transparency, and in the interest in ensuring payment stability, we are proposing not to use the proposed updated MEI cost share weights to set PFS payment rates for CY 2023. However, we are soliciting comments on the potential use of the proposed updated MEI cost share weights to calibrate payment rates and update the GPCI under the PFS in the future.
Comment Solicitation on Global Surgical Services
We are soliciting public comment on strategies for improving global surgical package valuation and paying more accurately for the global surgical packages under the PFS.
Evaluation and Management (E/M) Visits
As part of the ongoing updates to E/M visits and related coding guidelines that are intended to reduce administrative burden, the AMA CPT Editorial Panel approved revised coding and updated guidelines for Other E/M visits, effective January 1, 2023. Similar to the approach we finalized in the CY 2021 PFS final rule for office/outpatient E/M visit coding and documentation, we are proposing to adopt most of these changes in coding and documentation for Other E/M visits (which include hospital inpatient, hospital observation, emergency department, nursing facility, home or residence services, and cognitive impairment assessment) effective January 1, 2023. This revised coding and documentation framework would include CPT code definition changes (revisions to the Other E/M code descriptors), including:
- New descriptor times (where relevant).
- Revised interpretive guidelines for levels of medical decision making.
- Choice of medical decision making or time to select code level (except for a few families like emergency department visits and cognitive impairment assessment, which are not timed services).
- Eliminated use of history and exam to determine code level (instead there would be a requirement for a medically appropriate history and exam).
We are proposing to maintain the current billing policies that apply to the E/Ms while we consider potential revisions that might be necessary in future rulemaking. We are also proposing to create Medicare-specific coding for payment of Other E/M prolonged services, similar to what CMS adopted in CY 2021 for payment of Office/Outpatient prolonged services.
Split (or Shared) E/M Visits
For CY 2023, we are proposing to delay the split (or shared) visits policy we finalized in CY 2022 for the definition of substantive portion, as more than half of the total time, for one year with a few exceptions. Therefore, for CY 2023, as in CY 2022, the substantive portion of a visit may be met by any of the following elements:
- Performing a physical exam.
- Making a medical decision.
- Spending time (more than half of the total time spent by the practitioner who bills the visit).
Under our proposal, clinicians who furnish split (or shared) visits will continue to have a choice of history, physical exam, or medical decision making, or more than half of the total practitioner time spent to define the substantive portion, instead of using total time to determine the substantive portion, until CY 2024.
For CY 2023, we are proposing a number of policies related to Medicare telehealth services including making several services that are temporarily available as telehealth services for the PHE available through CY 2023 on a Category III basis, which will allow more time for collection of data that could support their eventual inclusion as permanent additions to the Medicare telehealth services list. We are proposing to extend the duration of time that services are temporarily included on the telehealth services list during the PHE, but are not included on a Category I, II, or III basis for a period of 151 days following the end of the PHE, in alignment with the Consolidated Appropriations Act, 2022 (CAA, 2022).
We are proposing to implement the telehealth provisions in the CAA, 2022 via program instruction or other subregulatory guidance to ensure a smooth transition after the end of the PHE. These policies extend certain flexibilities in place during the PHE for 151 days after the PHE ends, such as allowing telehealth services to be furnished in any geographic area and in any originating site setting, including the beneficiary’s home, allowing certain services to be furnished via audio-only telecommunications systems, and allowing physical therapists, occupational therapists, speech-language pathologists, and audiologists to furnish telehealth services. The CAA, 2022 also delays the in-person visit requirements for mental health services furnished via telehealth until 152 days after the end of the PHE. We are proposing that telehealth claims will require the appropriate place of service (POS) indicator to be included on the claim, rather than modifier “95,” after a period of 151 days following the end of the PHE and that modifier “93” will be available to indicate that a Medicare telehealth service was furnished via audio-only technology, where appropriate.
Request for Information: Medicare Potentially Underutilized Services
In this rule, we seek to engage with interested parties and stakeholders and solicit comment regarding ways to identify and improve access to high value, potentially underutilized services by Medicare beneficiaries.
Behavioral Health Services
In the 2022 CMS Behavioral Health Strategy, CMS included a goal to improve access to, and quality of, mental health care services and included an objective to “increase detection, effective management, and/or recovery of mental health conditions through coordination and integration between primary and specialty care providers.” In CY 2017 and 2018 PFS rulemaking, we received comments that initiating visit services for behavioral health integration (BHI) should include in-depth psychological evaluations delivered by a clinical psychologist (CP), and that CMS should consider allowing professionals who were not eligible to report the approved initiating visit codes to Medicare to serve as a primary hub for BHI services. Considering the increased needs for mental health services, and feedback we have received, we are proposing to create a new General BHI service personally performed by CPs or clinical social workers (CSWs) to account for monthly care integration where the mental health services furnished by a CP or CSW are serving as the focal point of care integration. We are also proposing to allow a psychiatric diagnostic evaluation to serve as the initiating visit for the new general BHI service.
Additionally, in the 2022 CMS Behavioral Health Strategy, CMS set a goal to improve access to, and quality of, mental health care services. In light of the current needs among Medicare beneficiaries for improved access to behavioral health services, we have considered regulatory revisions that may help to reduce existing barriers and make greater use of the services of behavioral health professionals, such as licensed professional counselors (LPCs) and Licensed Marriage and Family Therapists (LMFTs). Therefore, we are proposing to make an exception to the direct supervision requirement under our “incident to” regulation at 42 CFR 410.26 to allow behavioral health services provided under the general supervision of a physician or NPP, rather than under direct supervision, when these services or supplies are provided by auxiliary personnel incident to the services of a physician (or non-physician practitioner). We believe that this proposed change will facilitate utilization and extend the reach of behavioral health services.
Chronic Pain Management Services
We are proposing new HCPCS codes and valuation for chronic pain management and treatment services (CPM) for CY 2023. We believe the proposed CPM HCPCS codes would, if finalized, facilitate payment for medically necessary services, prompt more practitioners to welcome Medicare beneficiaries with chronic pain into their practices, and encourage practitioners already treating Medicare beneficiaries who have pain to spend the time to help them manage their condition within a trusting, supportive, and ongoing care partnership.
The proposed codes include a bundle of services furnished during a month that we believe to be the starting point for holistic chronic pain care, aligned with similar bundled services in Medicare, such as those furnished to people with suspected dementia or substance use disorders. We are proposing to include the following elements in the CPM code: diagnosis; assessment and monitoring; administration of a validated pain rating scale or tool; the development, implementation, revision, and maintenance of a person-centered care plan that includes strengths, goals, clinical needs and desired outcomes; overall treatment management; facilitation and coordination of any necessary behavioral health treatment; medication management; pain and health literacy counseling; any necessary chronic pain related crisis care; and ongoing communication and coordination between relevant practitioners furnishing care, such as physical and occupational therapy and community-based care, as appropriate.
Opioid Treatment Programs (OTPs)
In order to stabilize the price for methadone for CY 2023 and subsequent years, we are proposing to revise our methodology for pricing the drug component of the methadone weekly bundle and the add-on code for take-home supplies of methadone. Under this proposal, we would base the payment amount for the drug component of HCPCS codes G2067 and G2078 for CY 2023 and subsequent years on the payment amount for methadone in CY 2021 and update this amount annually to account for inflation using the PPI for Pharmaceuticals for Human Use (Prescription). Additionally, based on the severity of needs of the patient population diagnosed with opioid use disorder (OUD) and receiving services in the OTP setting, we are proposing to modify the payment rate for the non-drug component of the bundled payments for episodes of care to base the rate for individual therapy on a crosswalk code describing a 45-minute session, rather than the current crosswalk to a code describing a 30-minute session. This would increase overall payments for medication-assisted treatment and other treatments for OUD, recognizing the longer therapy sessions that are usually required.
We are also proposing to allow the OTP intake add-on code to be furnished via two-way audio-video communications technology when billed for the initiation of treatment with buprenorphine, to the extent that the use of audio-video telecommunications technology to initiate treatment with buprenorphine is authorized by the Drug Enforcement Administration (DEA) and Substance Abuse and Mental Health Services Administration (SAMHSA) at the time the service is furnished. We are also proposing to permit the use of audio-only communication technology to initiate treatment with buprenorphine in cases where audio-video technology is not available to the beneficiary and all other applicable requirements are met.
Additionally, we are clarifying that OTPs can bill Medicare for medically reasonable and necessary services furnished via mobile units in accordance with SAMHSA and DEA guidance. We are proposing that locality adjustments for services furnished via mobile units would be applied as if the service were furnished at the physical location of the OTP registered with DEA and certified by SAMHSA.
We are proposing to allow beneficiaries to have direct access, when appropriate, to an audiologist without a physician referral by creating a new HCPCS code (GAUDX) for audiologists to use when billing for audiology services they already provide that are defined by other code(s). The service(s) encompassed by the new HCPCS code would be personally furnished by the audiologist and would allow beneficiaries to receive: care for non-acute hearing or assessments unrelated to disequilibrium, hearing aids, or examinations for the purpose of prescribing, fitting, or changing hearing aids. We are proposing to permit audiologists to bill for this direct access (without a referral) once every 12 months.
Dental and Oral Health Services
Medicare currently pays for dental services in a limited number of circumstances, such as when that service is an integral part of specific treatment of a beneficiary's primary medical condition. Some examples include reconstruction of the jaw following accidental injury, tooth extractions done in preparation for radiation treatment for cancer involving the jaw, or oral exams preceding kidney transplantation. We are proposing to clarify and codify certain aspects of our current Medicare FFS payment policies for dental services. We are also proposing and seeking comment on payment for other dental services, such as dental exams and necessary treatments prior to organ transplants, cardiac valve replacements, and valvuloplasty procedures that may be inextricably linked to, and substantially related and integral to, the clinical success of an otherwise covered medical service. We are also requesting comments on other types of clinical scenarios where dental services may be inextricability linked to, and substantially related and integral to, the clinical success of clinically related services, or furnished in connection with other covered medical services, and the potential establishment of a process to review public submissions of recommendations for identifying the circumstances when the policies may apply. Finally, we are also seeking comment on potential future payment models for dental and oral health care services, and other impacted policies.
We are proposing several changes to our policies for skin substitute products to streamline the coding, billing, and payment rules and to establish consistency in how we code and pay for these products across various settings. Specifically, CMS is proposing to change the terminology of skin substitutes to ‘wound care management products’ in order to accurately reflect how clinicians use these products, to provide a more consistent and transparent approach to coding for these products, and to treat and pay for these products as incident to supplies under the PFS beginning on January 1, 2024.
Additionally, we are soliciting feedback on our key objectives related to skin substitute policies, which include (1) ensuring a consistent coding and payment approach for skin substitute products across the physician office and hospital outpatient department setting; (2) ensuring that all skin substitute products are assigned an appropriate HCPCS Level II code, including proposal regarding what documentation is necessary to provide CMS for currently marketed and future products; (3) using a uniform benefit category across products within the physician office setting, regardless of whether the product is synthetic or comprised of material, so we can incorporate payment methodologies that are more consistent; and 4) maintaining clarity for interested parties on CMS skin substitutes policies and procedures.
Colorectal Cancer Screening
For CY 2023, we are proposing two updates to expand our Medicare coverage policies for colorectal cancer screening in order to align with recent United States Preventive Services Task Force and professional society recommendations. First, we are proposing to expand Medicare coverage for certain colorectal cancer screening tests by reducing the minimum age payment limitation to 45 years. Second, we are proposing to expand the regulatory definition of colorectal cancer screening tests to include a follow-on screening colonoscopy after a Medicare covered non-invasive stool-based colorectal cancer screening test returns a positive result. Both of these proposals reflect our desire to expand access to quality care and to improve health outcomes for patients through prevention and early detection services, as well as through effective treatments.
Requiring Manufacturers of Certain Single-Dose Container or Single-Use Package Drugs to Provide Refunds with Respect to Discarded Amounts
Section 90004 of the Infrastructure Investment and Jobs Act (Pub. L. 117-9, November 15, 2021) amended section 1847A of the Act adding provisions that require manufacturers to provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use package drug. The refund amount is the amount of discarded drug that exceeds an applicable percentage, which is required to be at least 10%, of total allowed charges for the drug in a given calendar quarter. The proposals to implement section 90004 of the Infrastructure Act include: how discarded amounts of drugs are determined; a definition of which drugs are subject to refunds (and exclusions); when and how often CMS will notify manufacturers of refunds; when and how often payment of refunds from manufacturers to CMS is required; refund calculation methodology (including applicable percentages); a dispute resolution process; and enforcement provisions.
Preventive Vaccine Administration Services
Section 3713 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136) amended Section 1861(s)(10)(A) of the Act to add the COVID-19 vaccine and its administration in the same subparagraph as the influenza and pneumococcal vaccines and their administration. In this proposed rule, we are proposing refinements to the payment amount for preventive vaccine administration under the Medicare Part B vaccine benefit. We are proposing to annually update the payment amount based upon the increase in the MEI and to adjust for the geographic locality, based upon the PFS locality where the preventive vaccine is administered using the geographic adjustment factor (GAF). We are also proposing to continue the additional payment for at-home COVID-19 vaccinations for CY 2023.
Additionally, in light of the distinction between a PHE declared under section 319 of the Public Health Service Act (PHS Act) and an Emergency Use Authorization (EUA) declaration under section 564 of the Food, Drug, and Cosmetic Act (FD&C Act), and the possibility that they will not terminate at precisely the same time, we propose to clarify our policies finalized in the CY 2022 PFS final rule regarding the administration of COVID-19 vaccine and monoclonal antibody products to reflect that those policies will continue until the EUA declaration for drugs and biological products is terminated.
Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)
Chronic Pain Management and Behavioral Health Services
We are proposing to add the new chronic pain management and behavioral health integration services to the RHC and FQHC specific general care management HCPCS code, G0511, to align with the proposed changes made under the PFS for CY 2023. Since the requirements for the new chronic pain management and behavioral health integration services are similar to the requirements for the general care management services furnished by RHCs and FQHCs, the payment rate for HCPCS code G0511 would continue to be the average of the national non-facility PFS payment rates for the RHC and FQHC care management and general behavioral health codes (CPT codes 99484, 99487, 99490, and 99491) and PCM codes (CPT codes 99424 and 99425) and would be updated annually based on the PFS amounts for these codes.
We are proposing to implement the telehealth provisions in the Consolidated Appropriations Act, 2022 (CAA, 2022) via program instruction or other subregulatory guidance to ensure a smooth transition after the end of the PHE. These policies extend certain flexibilities in place during the PHE for 151 days after the PHE ends, including allowing payment for RHCs and FQHCs for furnishing telehealth services (other than mental health visits that can be furnished virtually on a permanent basis) under the payment methodology established for the PHE, allowing telehealth services to be furnished in any geographic area and in any originating site setting, including the beneficiary’s home, and allowing certain services to be furnished via audio-only telecommunications systems. The CAA, 2022 also delays the in-person visit requirements for mental health visits furnished by RHCs and FQHCs via telecommunications technology until 152 days after the end of the PHE.
Conforming Technical Changes to the In-Person Requirements for Mental Health Visits
We are proposing to make conforming regulatory text changes in accordance with section 304 of the CAA, 2022 to amend paragraph (b)(3) of 42 CFR 405.2463, “What constitutes a visit,” and paragraph (d) of 42 CFR 2469, “FQHC supplemental payments,” to include the delay of the in-person requirements for mental health visits furnished by RHCs and FQHCs through telecommunication technology under Medicare until the 152nd day after the COVID-19 PHE ends.
Specified Provider-Based RHC Payment Limit Per-Visit
Subsequent to the publication of the CY 2022 PFS final rule, which implemented changes to the RHC payment limit as required by the Consolidated Appropriations Act, 2021, interested parties requested clarification regarding the timing of cost reports used to set the RHC payment limit. We are proposing to clarify that a 12-consecutive month cost report should be used to establish a specified provider-based RHC’s payment limit per visit. We believe 12-consecutive months of cost report data accurately reflects the costs of providing RHC services and will establish a more accurate base from which the payment limits will be updated going forward.
Clinical Laboratory Fee Schedule (CLFS):
In accordance with section 4(b) of the Protecting Medicare and American Farmers from Sequester Cuts Act (PMAFSCA), we are proposing to make certain conforming changes to the data reporting and payment requirements at 42 CFR part 414, subpart G. Specifically, we are proposing to revise § 414.502 to update the definitions of both the “data collection period” and “data reporting period,” specifying that for the data reporting period of January 1, 2023 through March 31, 2023, the data collection period is January 1, 2019 through June 30, 2019. We are also proposing to revise § 414.504(a)(1) to indicate that initially, data reporting begins January 1, 2017 and is required every 3 years beginning January 2023. In addition, we are proposing to make conforming changes to our requirements for the phase-in of payment reductions to reflect the amendments in section 4(b) of PMAFSCA. Specifically, we are proposing to revise § 414.507(d) to indicate that for CY 2022, payment may not be reduced by more than 0% as compared to the amount established for CY 2021, and for CYs 2023 through 2025, payment may not be reduced by more than 15% as compared to the amount established for the preceding year.
Additionally, we are proposing to codify and clarify various laboratory specimen collection fee policies in § 414.523(a)(1). This is because the policies implementing the statutory requirements under section 1833(h)(3)(A) of the Act for the laboratory specimen collection fee, which are currently described in the Medicare Claims Processing Manual Pub. 100-04, chapter 16, § 60.1., do not have corresponding regulations text and some of the manual guidance is no longer applicable.
Lastly, in light of questions we have received from stakeholders, we are proposing to codify in our regulations, and make certain modifications and clarifications, to the Medicare CLFS travel allowance policies. We are proposing to add § 414.523(a)(2) “Payment for travel allowance” to reflect the requirements for the travel allowance for specimen collection. Specifically, in accordance with section 1833(h)(3)(B) of the Act, we are proposing to include in our regulations the following requirements for the travel allowance methodology: (1) general requirements, (2) travel allowance basis, (3) travel allowance amount, and (4) travel allowance amount calculation.
Medicare Ground Ambulance Data Collection System
CMS is proposing a series of changes to the Medicare Ground Ambulance Data Collection System. First, we are proposing to update our regulations at § 414.626(d)(1) and (e)(2) to provide the necessary flexibility to specify how ground ambulance organizations should submit the hardship exemption requests and informal review requests, including to our web-based portal once that portal is operational. Second, through review of questions and feedback that we received, we are proposing further changes and clarifications to the Medicare Ground Ambulance Data Collection Instrument. The changes and clarifications aim to reduce burden on respondents, improve data quality, or both. We group our proposed changes and clarifications into four broad categories: editorial changes for clarity and consistency; updates to reflect the web-based system; clarifications responding to feedback from questions from interested parties and testing; and typos and technical corrections. Lastly, we note that the CAA, 2022 delayed the deadline for MedPAC to submit its report to Congress on the ground ambulance data collection system study until June 15th, following the date the Secretary transmits data for the first representative sample of ground ambulance organizations.
For a fact sheet on the CY 2023 Quality Payment Program proposed changes, please visit (clicking link downloads zip file): https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1972/2023%20Quality%20Payment%20Program%20Proposed%20Rule%20Resources.zip
For a fact sheet on the proposed Medicare Shared Savings Program changes, please visit: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2023-medicare-physician-fee-schedule-proposed-rule-medicare-shared-savings-program
For a CMS blog on the proposed behavioral health changes, please visit: https://www.cms.gov/blog/strengthening-behavioral-health-care-people-medicare