What PAs Should Know About the 2023 Physician Fee Schedule Rule

CMS Postpones Major Change to Split/Shared Visit Billing Rules

November 10, 2022

By Michael Powe, Vice President, Reimbursement & Professional Advocacy

On November 2, the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees the Medicare program, released the 2023 Physician Fee Schedule (PFS) final 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 of importance to the PA profession are highlighted below and will take effect on January 1, 2023..

Split/Shared Visit Billing
Medicare’s split (or shared) billing policy will remain unchanged for 2023. To use this optional billing mechanism, a “substantive portion” of care  must be performed by a physician which 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 discharge day management and critical care, the substantive portion can only be determined based on more than half of the total time.

CMS proposes to make time the only determinant in 2024. AAPA is not in favor of this change and will advocate for CMS making the 2023 policy (either history, exam, or MDM, or time) permanent.

Other requirements must be met for a physician to bill a service as split (or shared) under their name/National Provider Identifier Standard (NPI), and these 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.

PA Supervision of Behavioral Health Professionals
Demand for behavioral health services is increasing while most projections indicate the size of the behavioral health workforce is shrinking. In an effort to increase beneficiary access to behavioral health services, the final PFS rule specifies that behavioral health services provided by licensed professional counselors (LPCs) and licensed marriage and family therapists (LMFTs) can be provided under the general supervision of a PA, physician, or other non-physician health professional, as opposed to under the direct supervision.

Consequently, PAs would no longer be required to be physically on site (direct supervision), when supervising LPCs or LMFTs. Instead, PAs could be available by electronic means via cell phone, for example, known under Medicare as general supervision. CMS believes this policy change will provide increased flexibility regarding how health professionals can be more efficiently utilized to meet behavioral health access demands.

Changes to Hospital E/M Documentation
Significant changes to evaluation and management (E/M) coding and documentation for hospital inpatient, hospital observation, emergency department, and other services will go into effect in January. Like office/outpatient E/M visit coding, a medically appropriate history and/or examination will be required, but the history and physical exam will no longer be used to select the visit level. The level of visit selected for hospital inpatient and observation services will be based on MDM or total time personally spent by the billing practitioner performing the service. For emergency department services, MDM will be the only determinant to select the visit level.

MDM includes establishing diagnoses, assessing the status of a condition, and/or selecting a management option. Four levels of MDM will be recognized and determined by three elements: the number and complexity of problem(s) that are addressed during the encounter, the amount and/or complexity of data to be reviewed and analyzed, and the risk of complications and/or morbidity or mortality of patient management. Time will include many patient-facing and non-patient-facing activities performed by the billing practitioner(s) on the day of the service and not separately payable. For a complete list of time-based qualifying activities and determinants of MDM, see CPT® Evaluation and Management (E/M) Code and Guideline Changes.

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Nursing Facility Billing
Upon entering a nursing facility, patients are required to undergo an initial comprehensive visit, which must be conducted by a physician. Often, patients need medical care before they can be seen by the physician for the initial comprehensive visit. When this occurs, there can be confusion as to whether and how to bill for a medical service that occurs before the initial comprehensive visit.

The final rule clarifies that PAs may bill an appropriate initial nursing facility or subsequent nursing facility care code, even if the services are provided before the initial comprehensive assessment is performed. This policy clarification will allow medically necessary care to be provided when needed without confusion about whether a visit is billable prior to the initial comprehensive visit.

ACO Update
Accountable Care Organizations (ACOs) and networks of health professionals under the Medicare Shared Savings Program (MSSP) seek to improve quality and reduce costs by enhanced coordination of care and cooperation among health professionals. The final PFS rule implements several significant changes to the MSSP to encourage greater participation in ACOs. Some of the changes proposed include providing advanced payments to certain new or low-revenue ACOs that could help address social needs, giving smaller ACOs more time to transition to contractual arrangements with the potential for financial risk and creating a health equity adjustment for the performance category to reduce penalty to ACOs caring for an underserved population. There were also programmatic policy changes made to help reduce the administrative burdens of ACOs.

Medicare Conversion Factor Cuts
The 2023 conversion factor is scheduled to be reduced by 4.47%, from $34.61 to $33.06 for 2023. This payment reduction is primarily due to the expiration of the 3% payment increase provided by Congress in 2022 and budget neutrality adjustments to E/M Current Procedural Terminology (CPT) codes, as required by law. 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].

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