How the 2023 Physician Fee Schedule Impacts Emergency Medicine Groups

UPDATED 01/04/2022 

CMS released its 2023 update of the Medicare physician fee schedule (MPFS), which impacts Medicare Part B payments for emergency services, diagnostic testing, and other outpatient services.

"CMS finalized several significant policy changes in its latest update to the Physician Fee Schedule," explains Dr. Andrea Brault, President & CEO of Brault Practice Solutions. "Including new reimbursement guidelines, updates to the CMS quality payment program, and yet another decrease to the Medicare conversion factor."

Medicare Reimbursement Cuts

The 2023 MPFS lowers the Medicare conversion factor to $33.0607, a decrease of approximately 4.48 percent (or -$1.55) compared to last year's conversion factor.

"This is the first of several Medicare cuts that will happen unless Congress takes action," explains Dr. Brault. "Current statutory requirements are expected to cut Medicare reimbursement by up to 8.5 percent in 2023. But we're hopeful that Congress will delay the proposed cuts as we continue to work toward a long-term policy solution."

Advocacy groups have been working with lawmakers to explain the destabilizing effect these payment cuts can have on physician practices, especially for emergency medicine (EM) groups, ­which must offset the cost of covering two-thirds of the country's uninsured care and over half of the annual Medicaid/CHIP patient care.

Update: On December 29, 2022, the President signed the FY23 omnibus appropriations package into law. This new spending package includes partial relief for the previously scheduled Medicare cuts over the next two years, including 2.5 percent relief in 2023 and 1.25 percent in 2024. This package also includes two years of relief from the previously scheduled PAYGO cuts, which would have cut Medicare reimbursement by an additional four percent in 2023.

Coding policies also impact emergency medicine   

The 2023 MPFS also introduces several new coding policies as part of its ongoing effort to streamline documentation requirements and update Medicare payment guidelines for Evaluation & Management (E/M) services.

• Non-office & Outpatient E/M codes: CMS generally accepted the same guidelines established for commercial payers as part of the CPT revisions to the E/M code sets earlier this year. This update changes the criteria for determining the acuity level of a patient visit, placing the sole focus on Medical Decision Making (MDM) and removing the requirement to reach a specific number of elements in the History of Present Illness and Exam portions of the patient record. CMS also finalized its proposal to maintain the current RVUs of 2.74 for emergency department Level 4 visits instead of reducing it to 2.60, as recommended by the Relative Value Scale Update Committee. 
  
  "For EM providers, the biggest risk in the new coding guidelines is with services currently billed with CPT code 99285 for high-acuity patients not admitted to the hospital. These are often called treat-and-release," explains Dr. Brault. "General documentation guidelines will usually support a 99285 when the patient is admitted to the hospital. But EM physicians will need to be more explicit in their MDM when a patient is discharged instead." 
   
• Inpatient/Observation "8 to 24-hour Rule": The final rule confirmed that a patient must be in observation for at least 8 hours to use the same-day observation codes. If a Medicare patient is in observation for less than 8 hours, providers are instructed to use the 99221-99223 inpatient set of codes.
  
  "This new classification for observation status can represent either an opportunity or a risk for different practices," says Dr. Brault. "So, it's important for groups to work with their clinical leaders and RCM partners to understand the potential impact on their practice." 
   
• Split (or Shared) E/M Visits: CMS also delayed its plan to include only the time component in its definition of "substantive portion," a term used to determine the billing practitioner for a split/shared visit. This new definition would have gone into effect on January 1, 2023. But many organizations argued that the new definition goes against the core premise of collaborative care by pitting physicians and advanced practitioners against one another. The re-definition is now delayed until January 1, 2024 (or until CMS issues new guidance).

"Provider groups should be working to understand and address these upcoming changes," explains Dr. Brault. "They should review a relative sample of charts coded with the 2022 rules versus the 2023 rules and then apply those numbers to their financial projections for the coming year. It's also good to look at documentation deficiencies that might impact reimbursement under these new rules."

Quality Payment Program Update

The final rule also includes updates to the MIPS quality payment program, which determines Medicare payment adjustments for clinicians who provide services under Medicare Part B, including emergency care and other outpatient services.

As part of this program, clinicians can receive a Medicare payment bonus, penalty assessment, or no adjustment at the end of each performance year. In 2023, clinicians can earn (or lose) up to 9 percent of their annual Medicare revenue, depending on their MIPS score.

"Updated scoring requirements will make it harder for some clinicians to achieve a high score," says Dr. Brault. "And expiring exemptions will force even more practitioners into this increasingly complicated program."

In previous years, many EM clinicians could opt out of the MIPS program and avoid penalties altogether. However, CMS has signaled that fewer exemptions will be granted and more penalties assessed in the coming year.

The eligibility criteria will also change for those who have traditionally met this quality reporting requirement through participation in an accountable care organization (ACO).

"In 2023, clinicians who fail to reach the updated threshold for ACO inclusion will be required to report their own quality measures to CMS," notes Dr. Brault. "This means a lot of providers will suddenly be at risk of receiving a Medicare penalty."

But there is some silver lining for emergency physicians, explains Dr. Brault.

A new MIPS Value Pathway (MVP) will be available for EM providers starting in 2023. This alternative reporting method allows scoring on four specialized measures rather than the six measures scored through traditional MIPS reporting. CMS is also adding new quality measures to its emergency medicine set, including a new measure for Social Drivers of Health.

To help prepare for these changes, Dr. Brault recommends having a MIPS strategy in place by early next year. "Avoiding penalties will require a focused plan and serious effort to monitor your group's progress throughout the year," explains Dr. Brault. "Identify a partner and an approach – and get started early."  

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ABOUT BRAULT PRACTICE SOLUTIONS

Brault is a revenue cycle and practice management organization that partners with hospitals and independent physician groups. Their intelligent practice solutions include coding and billing, MIPS optimization, provider documentation training, and practice management. Learn more at www.Brault.us