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Medicare Payments in 2024: Quick Highlights & Takeaways as CMS Announces Policy Changes
On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) unveiled a significant final rule marking the latest step in the administration’s comprehensive effort to create a more equitable, accessible healthcare system. The rule introduced policy changes that will impact Medicare payments under the Physician Fee Schedule (PFS), effective from January 1, 2024. Here are some key highlights and takeaways:
CY 2024 PFS Rate Setting & Conversion Factor
In CY 2024, CMS will enact a 1.25% reduction in overall payment rates under the PFS compared to CY 2023. However, this will be accompanied by substantial increases in payment for primary care and direct patient care. The final CY 2024 PFS conversion factor is set at $32.74 which represents a 3.4% decrease from the 2023 conversion factor of $33.89.
Evaluation & Management (E/M) Visits (G2211)
CMS is introducing a separate add-on payment for HCPCS code G2211, effective from January 1, 2024. This add-on code will recognize the resource costs associated with primary care and longitudinal care during evaluation and management visits. Use of the G2211 code will likely increase total wRVU volumes by 5-10% for many E/M-heavy specialties.
Split (or Shared) Evaluation & Management (E/M) Visits
For CY 2024, CMS is revising the definition of a “substantive portion” of a split (or shared) visit. The substantive portion will be defined as either more than half of the total time spent by the physician or non-physician practitioner during the visit or a significant part of the medical decision-making process. This change is in response to public feedback, and it aims to provide more flexibility in billing for split (or shared) E/M visits. Previous indications from CMS did not include medical decision-making in the criteria for “substantive portion,” which would have had a considerably higher impact on provider wRVU volumes in inpatient settings.
Telehealth Services Are Expanding Under the PFS
CMS is expanding telehealth services under the PFS for CY 2024. This includes the expansion of telehealth originating sites to include patients’ homes, the inclusion of additional healthcare practitioners in the definition of telehealth practitioners, and the continuation of payment for telehealth services furnished by RHCs and FQHCs. The rule will also postpone the requirement for in-person visits before initiating mental health telehealth services.
In CY 2024, telehealth services furnished in patients’ homes will be paid at the non-facility PFS rate to ensure continued access to these essential services. The definition of direct supervision for telehealth will remain in place through December 31, 2024.
VMG Health’s experts can assist organizations by assessing the new Medicare Physician Fee Schedule changes including how it will impact physician compensation spend. For more insight on physician compensation strategies and alignment, download the 2023 Physician Alignment: Tips & Trends Report.