Proposed Physician Payment Schedule Rule

On July 7, 2022, the Centers for Medicare & Medicaid Services (CMS) released the proposed rule for the 2023 Medicare physician payment schedule. While American Medical Association (AMA) staff will analyze and develop a summary of the 2,000+ page proposal, they wanted to make physicians aware of three key issues. Notably, the 2023 Medicare conversion factor would be reduced by about 4.5% from $34.6062 to $33.0775. This is largely a result of the expiration of a 3% increase to the conversion factor at the end of calendar year 2022 as required by law. The AMA will strongly advocate that Congress avert this significant cut and extend the 3% increase for 2023. Please note that the impact table in the proposed rule does not seem to include the 3% reduction in the conversion factor.

CMS would adopt changes to several evaluation and management (E/M) code families, including hospital, emergency medicine, nursing facility and home visits, as recommended by the CPT Editorial Panel and AMA/Specialty Society RVS Update Committee (RUC). These changes are estimated to require an additional reduction of about 1.5% to the 2023 Medicare conversion factor due to statutory budget neutrality requirements. In addition, under the Medicare Access and CHIP Reauthorization Act (MACRA), the final performance year that physicians are eligible to earn the 5% Advanced Alternative Payment Model (APM) incentive payment and $500 million Merit-based Incentive Payment System (MIPS) exceptional performance bonus is 2022, which will affect payment adjustments made in 2024. Therefore, the proposed rule does not contain any estimates of MIPS participants exceeding the exceptional performance threshold in 2023 or Advanced APM participants earning 5% incentive payments.

The confluence of these cuts, coupled with the 0% payment update that fails to account for significant inflation in practice costs, is creating long-term financial instability in the Medicare physician payment system and threatening patient access to Medicare-participating physicians. The AMA and our partners in organized medicine have developed a set of principles to guide advocacy efforts on Medicare physician payment reform. This is part of the AMA’s Recovery Plan for America’s Physicians and represents our ongoing work to establish a rational Medicare physician payment system that provides financial stability through positive annual payment updates, improves the financial viability of physician practices, and eases administrative burdens.

Finally, services that were going to be covered via telehealth only through the end of the COVID PHE would now be covered for an additional five months after the PHE ends, including the CPT codes for telephone visits.

Read the full text of the proposed rule here. 

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