The Centers for Medicare & Medicaid Services (CMS) recently released the final rule for the 2024 Medicare Physician Fee Schedule (PFS), outlining significant changes impacting healthcare providers and clinics. These updates are part of CMS's ongoing efforts to promote value-based care, improve patient outcomes, and ensure equitable reimbursement for services. This article will provide a comprehensive overview of the key changes in the 2024 PFS and their implications for healthcare providers.

1. Conversion Factor Reduction

One of the most significant changes in the 2024 PFS is the reduction in the conversion factor. The conversion factor has decreased to $32.7442 (and $20.4349 for Anesthesia) for 2024, representing a 3.37% decrease (3.3% for Anesthesia) from the previous year. This change will have a direct impact on the reimbursement rates for physician services.

The conversion factor, as it stands, will not properly adjust the gap between rising physician practice expenses and reimbursement rates. Several medical professional associations are urging Congress to avert the reimbursement cuts before they are in full effect in 2024.

2. Appropriate Use Criteria Program Guidelines Rescinded

In a notable development, the Appropriate Use Criteria (AUC) program guidelines have been rescinded, and implementation has been paused. The AUC program aimed to promote the appropriate use of advanced imaging services by requiring healthcare providers to consult clinical decision support mechanisms for certain Medicare Part B claims. However, CMS has decided to discontinue this program, providing relief to healthcare providers who were facing additional administrative burdens and potential penalties for non-compliance.

3. G2211: Visit Complexity Inherent to Evaluation and Management

Effective January 1, 2024, a new add-on HCPCS code, G2211, will be implemented to capture the complexity inherent in evaluation and management (E&M) visits. This code recognizes the additional time and effort required by healthcare providers to manage patients with complex medical conditions or multiple comorbidities.

4. Telehealth Updates and Expansion

The 2024 PFS includes several updates and expansions to telehealth services, aiming to enhance access to care and improve patient outcomes. Here are some key highlights:

Reimbursement Rates for Telehealth Home Visits

Telehealth home visits will now be reimbursed at the higher non-facility fee schedule rate for Place of Service 10, Telehealth Provided in Patient's Home.

Place of Service Differential Payment

To align reimbursement rates with the different costs associated with providing telehealth services in various settings, CMS has introduced a place of service differential payment policy. Under this policy, Place of Service 02, Telehealth Provided Other than in Patient's Home, will be reimbursed at the lower facility rate.

Expansion of Telehealth Services List

While no new codes have been permanently added to the Medicare Telehealth Services List, CMS has established a new process for adding, removing, or modifying codes on the list. This streamlined approach allows for more flexibility and responsiveness in adapting to emerging telehealth services and technologies. Healthcare providers should stay updated on any changes to the Telehealth Services List to ensure accurate billing and reimbursement for telehealth services provided.

5. Direct Supervision via Telecommunication

Recognizing the importance of direct supervision in providing high-quality care, CMS is continuing to permit a supervising practitioner to be “present and immediately available” through real-time audio and video interactive telecommunication through the end of 2024. The expanded use of audio and video interactive telecommunication has enabled patients to have improved access to care in rural and underserved areas.

6. Merit-Based Incentive Payment System (MIPS) Threshold

The 2024 PFS maintains the MIPS performance threshold at 75 points. This decision represents a departure from CMS's initial proposal to raise the threshold to 82 points, which would have made participation in MIPS more challenging for healthcare providers and likely resulted in negative payment adjustments.

7. Updates to the Medicare Shared Savings Program (MSSP)

The physician fee schedule includes several changes to the Medicare Shared Savings Program (MSSP) to enhance its effectiveness and align it with CMS's value-based care strategy. Here are the key updates:

Clinical Quality Measures

The changes are moving ACOs toward more digital measurement of their quality reporting and data collection. These Medicare Clinical Quality Measures (CQM) are intended to align the Shared Savings Programs and Merit-Based Incentive Payment System (MIPS).

Financial Benchmarking Methodology

CMS has modified the financial benchmarking methodology for Accountable Care Organizations (ACOs) participating in the MSSP. The changes include:

• Applying a cap to risk score growth in an ACO's regional service area,
• Aligning the risk adjustment methodology for both the benchmark and performance years, and
• Eliminating the overall negative regional adjustment to the benchmark.

These modifications aim to encourage participation by ACOs caring for medically complex and high-cost beneficiaries.

Beneficiary Assignment Methodology

CMS has revised the beneficiary assignment methodology for the MSSP to provide greater recognition of the contribution of nurse practitioners, physician assistants, and clinical nurse specialists in delivering primary care services. The revised methodology includes an expanded window for assignments, allowing beneficiaries who receive primary care from these practitioner types to be included in ACO assignments.

8. Advance Investment Payments (AIP) Policies

The 2024 PFS refines the policies related to Advance Investment Payments (AIP) for eligible MSSP ACOs. AIP allows ACOs to receive upfront payments to support their transition to performance-based risk models. The updates include allowing ACOs to advance to two-sided model levels within the BASIC track's glide path, permitting early renewal of participation agreements, and requiring reporting of spend plan updates and actual spend information.

How Lutz Healthcare Accounting Services Can Help

Healthcare groups should familiarize themselves with these changes, assess their impact on their practices, and adapt their strategies accordingly. By staying informed and proactive, healthcare providers can navigate these changes successfully and continue delivering exceptional patient care. Lutz offers expert healthcare accounting services that can provide further clarification on any of these changes and how they may affect your practice. Please contact us if you have any questions.