CMS Releases Proposed 2024 Physician Fee Schedule Rule

AAPA Reimbursement Team

The Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees the Medicare program, released the 2024 Physician Fee Schedule (PFS) proposed rule. The rule updates numerous Medicare coverage and payment policies that impact PAs, physicians and other health professionals. Some of the key provisions of the rule which, if finalized, take effect on January 1, 2024, are highlighted below.

Split/Shared Visit Billing

Medicare’s split (or shared) billing policy will remain unchanged in 2024. CMS had proposed to make time the only determinant but indicates the current definition of a substantive portion will continue through at least December 31, 2024. Maintaining the existing flexibility is consistent with the recommendations of the AAPA and several other medical societies.

To use this optional billing mechanism for 100% payment under the Physician Fee Schedule, the “substantive portion” of care that must be performed by a physician will continue to be defined (for non-time-based services) as one of the following: history, physical exam, or medical decision-making (MDM), or more than half of the total combined time spent on the service by a PA and a physician. For time-based services like critical care and discharge day management, the substantive portion can only be determined based on more than half of the total time.

Other requirements that must be met for a physician to bill a service as split (or shared) under their name/National Provider Identifier (NPI), include the following:

  • The physician and PA (or NP) must work for the same group.
  • The physician and PA (or NP) must provide their part of the service on the same calendar day.
  • The services must be performed in a hospital, facility, or hospital outpatient office.
  • The physician must sign and date the medical record, and the claim must be submitted with an FS modifier.

Cardiac and Pulmonary Rehabilitation Authorization

CMS is implementing sections of the Balanced Budget Act to expand the types of health professionals who may supervise pulmonary rehabilitation (PR), cardiac rehabilitation (CR) and intensive cardiac rehabilitation (ICR). PAs, as well as Nurse Practitioners and Clinical Nurse Specialists, will now be authorized to provide this supervision.

Accountable Care Organization (ACO) Assignment

CMS is proposing to create a new “Step 3” under the ACO attribution process in hopes of capturing additional beneficiaries that may not have been identified for ACO inclusion under the previous two-step attribution system. Specifically, CMS hopes to expand attribution to many of the beneficiaries who received all their care in the previous year from a non-physician health professional, such as a PA. While statutory requirements remain for a beneficiary to have seen a physician to trigger attribution to an ACO, CMS is proposing to implement an “expanded window” starting in 2025 that will allow for a beneficiary to be assigned to an ACO if they saw a physician within the past 24 months, and a PA within the past 12 months.

Advanced APMs Bonus

Previously, there was to be a gap year between when Medicare offered an incentive payment for Advanced APM participation (through 2024), and when a higher physician fee schedule rate was offered for APM participation (beginning in 2026). CMS is now proposing to continue the incentive payment through the 2025 payment year (2023 performance year) at a statutorily-required reduced rate of 3.5%, as opposed to 5% offered through the 2024 payment/2022 performance year.

Medicare Conversion Factor Cuts

The 2024 conversion factor is scheduled to be reduced by nearly 3.4%, from $33.89 to $32.75 for 2024. This payment reduction is primarily due to the expiration of the 2.5% payment increase provided by Congress for 2023, a 1.25% physician fee schedule payment increase for 2024, a 0% update adjustment factor, and a budget neutrality adjustment of -2.17% to E/M Current Procedural Terminology (CPT) codes. AAPA is working in coordination with physician medical societies and other health professional groups advocating for Congress to intervene and eliminate the projected payment cuts.

For additional information contact AAPA’s Reimbursement Team at [email protected].