CMS releases calendar year 2023 Medicare Physician Fee Schedule Changes: key takeaways for providers

On November 1, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a final rule for the 2023 Calendar Year (CY 2023) Medicare Physician Fee Schedule (MPFS) (the Final Rule). The Final Rule, issued on November 1, includes updates and policy changes related to Medicare payments under the MPFS.

While the Final Rule is far-reaching in a number of areas, this alert focuses on key topics and takeaways for physicians and other clinicians regarding the following: (1) telehealth services; (2) chronic pain management and treatment; (3) opioid treatment programs; (4) DME enrollment matters; and (5) the Medicare Shared Savings Program (MSSP).

The Final Rule’s implementation brings both opportunity and limitations to certain service lines. Accordingly, physicians and other clinicians that provide services in these areas should review the summary of the changes described herein, and work to implement any necessary modifications to their internal practices to comply with the Final Rule.

Updates to telehealth

The CMS updates to telehealth in the Final Rule largely mirror the August 2022 Fact Sheet for physicians.

Notably, CMS implemented the telehealth provisions in the Consolidated Appropriations Act (CAA) 2022 to ensure a smooth transition to the end of the public health emergency (PHE). Specifically, CMS finalized that services that are currently temporarily available due to the PHE, which is set to end January 11, 2023, will continue to be available at least 151 days following the end of the PHE, in line with the CAA. CMS also finalized that through this time period, providers may continue to deliver telehealth services in any geographic area and originating site setting. Additionally, through this period, physicians and practitioners may continue to bill with modifier 95 along with the place of service code that corresponds to where the provider would have furnished the service, if the service had been delivered in-person.

However, 151 days after the PHE ends, unless there is further action by Congress, the telehealth flexibilities extended during the COVID-19 public health emergency will expire and physicians and other clinicians seeking to deliver telehealth services to Medicare beneficiaries and receive reimbursement under the MPFS will be required to comply with the restrictions set forth under Section 1834(m) of the Social Security Act. Accordingly, physicians and clinicians must assess the impact of the end of the PHE as it pertains to their service lines and their ability to comply with Medicare’s restrictions on telehealth, in addition to any state law limitations.

We continue to recommend that our clients have backup systems in place to transition away from providing these telehealth services to Medicare beneficiaries for those services that CMS will no longer permit. Additionally, all telehealth providers should continue to monitor developments from Congress, CMS and other Department of Health and Human Services regulators with respect to changes in coverage and enforcement priorities in the telehealth space. As described in our previous client alert, we expect that the government will ramp up its enforcement of fraud and abuse of telehealth services provided during and after the PHE.

For providers of mental health, we note that CMS finalized its proposal (in line with the CAA) that delays the in-person requirements for the provision of mental health services until day 152 after the PHE ends. Once such proposal is effective, CMS will require mental health providers to see patients in-person within six months prior to a patient’s initial telehealth service and once every twelve months thereafter. This will directly impact telehealth providers that operate fully remote platforms.

Further, when finalizing this proposal, CMS emphasized that audio-only telephone evaluation and management services are inherently non-face-to-face services, and outside of the circumstances of the PHE, these services will not serve as a substitute for in-person care furnished in a face-to-face encounter. Telehealth services delivered post-PHE and the applicable 151-day extension will likely require the use of two-way audio-visual modalities in order to coverage to be available.

Lastly, as discussed in more detail below, we note that Medicare will cover some telehealth-based treatment services delivered under Opioid Treatment Programs (OTPs).

Chronic pain management and treatment

The Final Rule finalized new HCPCS codes (G3002 and G3003) for chronic pain management (CPM) and provided sub-regulatory guidance related to the use of these codes. For clinicians that provide CPM services, it is important to note that CMS defined chronic pain as “persistent or recurrent pain lasting longer than three months.” The CPM codes require that a clinician see a patient in-person prior to billing G3002; however, CMS stated that a clinician may furnish any of the in-person components via telehealth, as clinically appropriate, after this initial visit in order to increase beneficiaries’ access to care.

Further, CMS noted that clinicians may bill CPM codes in conjunction with remote patient monitoring, remote physiologic monitoring, remote therapeutic monitoring, chronic care management, transitional care management, and behavioral health integration on the same day so long as the clinician meets all of the requirements to report each service and that the time spent for CPM does not represent the time spent for providing any other reported service.

For those clinicians that provide CPM services, we note that CMS provided additional sub-regulatory guidance and sample scenarios for how it envisions clinicians will use CPM.

Opioid treatment programs

CMS also finalized modifications to regulations and policies for Medicare coverage and payment as it relates to opioid use disorder (OUD) treatment services furnished by OTPs. These modifications include increases to methadone pricing, pricing changes related to individual therapy in the bundled rate, and two initiatives focused on increased flexibilities to allow OTPs to reach more beneficiaries: (i) the use of telecommunications when initiating treatment with buprenorphine; and (ii) the inclusion of mobile components of OTPs in determining Medicare payments.

CMS finalized two changes related to pricing. First, as it relates to methadone pricing, CMS finalized a proposal to use the Producer Price Index (PPI), utilizing the payment rate for CY 2021 and updating it via the PPI for CY 2023, resulting in a roughly $2.00 increase. Second, as it relates to individual therapy in the bundled rate, CMS, after analyzing two years of utilization data, finalized the payment for the non-drug component of the bundled payment, cross-walking the payment to CPT code 90834, describing 45 minutes of psychotherapy. This represents an increase, as CMS previously utilized CPT code 90932, describing 30 minutes of psychotherapy. In the Final Rule, CMS has clarified, in response to a comment, that the CPT code crosswalk is for valuation/pricing purposes and does not prohibit an OTP from billing for the bundled code even if the therapy session did not last 45 minutes. Further, CMS clarified that it is not limiting the clinicians who can provide these services in an OTP to those practitioners who can bill Medicare directly; rather any professional authorized by state law and their scope of practice to furnish this type of therapy or counseling may do so as part of the treatment included in the bundled payments to OTPs under Medicare.

CMS also finalized two proposals which enable OTPs to reach more beneficiaries. First, CMS finalized additional flexibilities to allow OTPs to furnish intake/initiation of treatment with buprenorphine via two-way audio-video communications technology (to the extent authorized by the Drug Enforcement Agency (DEA) and Substance Abuse and Mental Health Services Agency (SAMHSA) at the time the clinician furnishes the service). CMS also finalized its proposal to permit, during the PHE, the use of audio-only communication technology to initiate treatment with buprenorphine in cases where audio-video technology is not available to the beneficiary.

CMS will continue to evaluate whether these flexibilities will continue at the end of the PHE. Further, CMS finalized its proposal to consider services furnished via OTP mobile units when determining payments to OTPs under the Medicare OTP bundled payment codes and/or add-on codes, to the extent services are medically reasonable and necessary and furnished in accordance with SAMSHA and DEA guidance.

DMEPOS suppliers

CMS finalized its proposal to add another condition of payment for DMEPOS suppliers. Specifically, CMS now requires that in order to receive payment for a furnished DMEPOS item or service, the supplier must have been in compliance with all conditions of payment set forth under 42 C.F.R. § 424.57(b) as well as with the application certification standards set forth under 42 C.F.R. § 424.57(c)(1)(ii)(A) at the time the item or service was provided, including state licensure, where a state requires such licensure to furnish certain items or services.

Notably, this directly impacts DMEPOS suppliers that may experience a licensure lapse, as now a licensure lapse might trigger a repayment obligation given that the licensure requirement is now an explicit condition of payment. As a result, DMEPOS suppliers should carefully and regularly review state licensure requirements, renewal timeframes, and any relevant changes to state law that could potentially affect the ability of the supplier to maintain licensure.

Medicare Shared Savings Program

CMS finalized a number of changes for the Medicare Shared Savings Program (MSSP) with the aim of encouraging the continued growth of the MSSP and to address health inequities. CMS expressed particular concern with a trend in recent years showing that the growth in the number of Medicare beneficiaries assigned to accountable care organizations (ACOs) in the MSSP has plateaued. By way of example only, finalized changes include:

  • Smoothing the transition to performance-based risk. For agreement periods beginning on January 1, 2024 and thereafter, CMS will allow inexperienced ACOs to participate in one five-year agreement under a one-sided shared savings model. Overall, under these changes, CMS will allow these ACOs to be eligible for one-sided shared savings, with no downside risk, for a total of seven years.
  • Providing an option for advance investment payments. Beginning January 1, 2024, CMS will make available a new option to make advance investment payments to new ACOs that are identified as low revenue and inexperienced with performance-based risk Medicare ACO initiatives. Under this option, an ACO would receive a one-time payment of $250,000 and quarterly payments for the first two years of the five-year agreement. CMS will recoup these payments from the ACO’s shared savings (if any) or from the ACO if it terminates its participation during the agreement period. The payments must be used to improve the quality and efficiency of items and services furnished to Medicare beneficiaries, including through increased staffing, infrastructure and serving underserved beneficiaries.
  • Adjustments to benchmarks. Beginning January 1, 2024, CMS finalized a number of revisions with respect to its use of benchmarks for the MSSP with the goal of ensuring that benchmarks serve as a reasonable baseline and do not otherwise discourage entry into and continued participation in the MSSP, while pushing ACOs to continually beat their own performances.
  • Implementing slide scale for determining payments and adjusting for health equity. The Final Rule indicated that CMS is moving away from its “all-or-nothing” approach for when ACOs may be eligible for shared savings based on quality performance in favor of scaling shared savings rates for ACOs if the ACO falls below certain thresholds. CMS also finalized a health equity adjustment to reward ACOs for serving underserved population.
  • Reducing administrative burden for ACOs. To reduce the administrative burden on ACOs, CMS finalized four changes beginning January 1, 2023. First, while CMS will continue to regulate marketing materials, CMS will no longer require ACOs to submit marketing materials for prior approval. Second, CMS adjusted the timing for beneficiary notifications and requirements for signage. Third, in lieu of submitting narratives describing communication plans, care management plans, and beneficiary evaluation and admission plans for SNF 3-day rule waivers, ACOs will submit attestations that such plans have been established. Fourth, CMS updated data sharing regulations to make it easier for ACOs that are organized health care arrangements (a HIPAA-governed status) to obtain aggregate reports and beneficiary-identifiable claims data from CMS.
  • Updating ACO beneficiary assignment methodology. Beginning January 1, 2023, CMS updated how it defines primary care services for the purposes of beneficiary assignment. Additionally, CMS is modifying its approach for when facilities (e.g., federally qualified health centers) will be used for assigning beneficiaries to an ACO.