The Centers for Medicare & Medicaid Services (CMS) have released the Medicare Physician Fee Schedule (PFS) final rule for 2024, introducing a 1.25 percent reduction in physician services for the upcoming year. This development has sparked both concerns and optimism within the healthcare industry. One notable aspect of this final rule is the CY 2024 PFS conversion factor, set at $32.74, representing a decrease of $1.15 from CY 2023. This reduction is a 3.4 percent decrease compared to the previous year’s conversion factor, a change that has not been taken well by various trade associations representing physicians. Prominent groups such as the American Medical Association (AMA), the American Hospital Association, and the Medicare Group Management Association (MGMA) have voiced their concerns, describing the proposed PSF payment cut as harmful and unsustainable for physician practices. Despite these concerns, CMS Administrator Chiquita Brooks-LaSure has emphasized the agency’s commitment to supporting physicians and ensuring that Medicare beneficiaries have access to essential healthcare services.
The final rule introduces several noteworthy payment policies aimed at enhancing healthcare access and equity. Medicare will now cover payment for caregiver training in managing treatment plans for patients with specific diseases or illnesses like dementia. This payment extends to both physicians and non-physician practitioners, including nurse practitioners, clinical nurse specialists, certified nurse-midwives, physician assistants, and clinical psychologists, as part of individualized treatment plans. Medicare will promote health equity by separately paying for services related to community health integration, social determinants of health (SDOH) risk assessment, and principal illness navigation. This is a step forward in recognizing the value of various healthcare support staff, such as community health workers, care navigators, and peer support specialists, in delivering care.
One of the other changes in the final rule is the implementation of a separate add-on payment for Healthcare Common Procedure Coding System (HCPCS) code G2211. This addition aims to better account for resource costs related to evaluation and management (E/M) visits for primary care and longitudinal care, particularly when establishing a trusting patient-clinician relationship as part of long-term care. While the add-on code may impact other Medicare PFS services due to budget-neutrality requirements, CMS asserts that these redistributive impacts will be minor compared to initial estimates. The final rule also revises the definition of a substantive portion of a split or shared E/M visit, aligning it with the revisions to the American Medical Association’s Current Procedural Terminology (CPT) guidelines. The AMA still expressed disappointment in the Medicare PFS final rule for CY 2024, stating a continuation of a two-decade trend of making Medicare unsustainable for both patients and physicians. The final rule does solidify several telehealth policies, signaling a positive shift in healthcare delivery. Effective from January 1, 2024, the rule ensures that telehealth providers are reimbursed at the non-facility rate for telehealth services. This decision aligns with telehealth-related flexibilities extended through the Consolidated Appropriations Act, 2023, aimed at preserving access to mental health and other telehealth services. This approach contradicts recommendations from the Medicare Payment Advisory Commission (MedPAC), which had urged CMS to resume paying the lower facility rate for telehealth services post-public health emergency (PHE).
CMS applied for lower facility-based payment rates to clinicians providing telehealth visits, regardless of their location, prior to 2020. During the pandemic, the agency adjusted this policy to consider the clinician’s location for both in-person and telehealth services. The final rule’s decision to reimburse telehealth services at the non-facility rate has garnered support from organizations like the AMGA, which lauds CMS for treating telehealth care as equivalent to in-office care. This change reflects the lessons learned during the COVID-19 public health emergency, emphasizing the importance of telehealth in providing access to high-quality healthcare. The final rule addresses concerns about healthcare provider privacy and security. It allows providers offering telehealth services from their homes to list their practice address instead of their home address on Medicare enrollment forms until the end of 2024. The decision follows letters from professional organizations, such as the American Hospital Association and the American Telemedicine Association, expressing concerns about requiring healthcare providers to disclose their home addresses. The final rule implements provisions outlined in the Consolidated Appropriations Act, 2023, which remove geographic restrictions on originating sites for telehealth services, expand the types of telehealth practitioners, and delay the requirement for an in-person visit before a remote health visit. It also ensures that rural health clinics and federally qualified health centers continue to receive payment for telehealth services.