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CY 2023 Medicare Physician Fee Schedule: Medicare Telehealth Update

On November 2, 2022, the Centers for Medicare & Medicaid Services (CMS) issued the CY 2023 Medicare Physician Fee Schedule Final Rule (Final Rule), which will take effect January 1, 2023. The Final Rule includes noteworthy updates regarding billing and reimbursement for services provided via telehealth, providing practitioners with some guidance on navigating the transition away from the flexibilities afforded during the COVID-19 Public Health Emergency (PHE).

CMS will implement, through program instruction or other guidance, the Consolidated Appropriations Act, 2022 (CAA) provisions that extended reimbursement for certain telehealth services for 151 days following the end of the PHE. These updates are described in more detail below.

Evaluation of Services to Be Added to the Medicare Telehealth Services List

In evaluating new telehealth services for inclusion on the list of Medicare-covered codes, CMS assigns each requested addition to one of three defined categories.

Category 1 services are those similar to professional consultations, office visits and office psychiatry services already on the approved telehealth list. Category 2 services, which are not similar to services already on the approved telehealth list, are assessed by CMS to determine whether there is evidence of clinical benefit to patients when the service is provided via telehealth.

During the PHE, CMS created Category 3 to evaluate codes added on a temporary basis that would facilitate continued access to medically necessary services during the pandemic, but for which there is not yet sufficient evidence to evaluate the services for permanent addition under Category 1 or Category 2 criteria.

In the Final Rule, CMS makes the following changes with respect to the approved Medicare Telehealth Services List:

Adds, on a Category 1 basis, certain prolonged observation codes (HCPCS codes G0316-G0318), determined to be sufficiently similar to already-approved prolonged service codes and to certain psychiatric diagnosis codes.
Adds new chronic pain management (CPM) services (HCPCS codes G3002 and G3003) to the list, also on a Category 1 basis, with the condition that an in-person visit of at least 30 minutes is furnished the first time HCPCS code G3002 is billed.
Approves, on a Category 3 basis, a number of services including certain therapy, neurotransmitter pulse generator, emotional/behavior assessment and psychological or neuropsychological testing and evaluation codes. CMS explains it has not received sufficient evidence to support the Category 2 addition of specific therapy codes (CPT codes 97537, 97763, 90901 and 98960-98962) because they involve direct observation of and/or physical contact with beneficiaries but believes that approving these codes on a Category 3 basis through the end of CY 2023 will allow time to gather additional information to potentially support their permanent addition.
Declines to add GI tract imaging, continuous glucose monitoring and certain neurotransmitter pulse generator/transmitter services to the Medicare Telehealth Services List on a Category 3 basis.
Declines to add telephone E/M visit codes to the Medicare Telehealth Services List on a Category 3 basis. As a general rule, CMS interprets the special payment rules for telehealth under the Social Security Act to require that, for a service to be reimbursable under the Medicare Physician Fee Schedule when rendered remotely, it must be “analogous” to and “essentially a substitute for” in-person services. Although telephone E/M services were approved for payment during the PHE on a temporary basis, CMS reiterates in the Final Rule that audio-only services are generally not analogous to in-person services and therefore will not be separately covered on the Medicare Telehealth Services List after the 151-day extension period following the PHE (and will revert to “bundled” status). CMS will continue to cover audio-only communications for mental health services under certain circumstances, as discussed more fully below.
Clarifies that in the event the 151-day period after the PHE ends on a date that is later than December 31, 2023, services added on a Category 3 basis would remain on the Medicare Telehealth Services List until the end of such 151-day period, even if later than December 31, 2023.

See the chart on CMS’s website for a complete list of approved telehealth codes and their duration.

Aligning Reimbursement with Federal Budget Legislation

The CAA codified the extension, for 151 days following the end of the PHE, of certain flexibilities applied to telehealth reimbursement during the PHE. To align with the CAA, in the Final Rule, CMS confirms its intention to implement these changes until 152 days following the end of the PHE, which include the following:

Allowing telehealth to be furnished in any geographic area and from any originating site in the U.S. where the beneficiary is located at the time of the telehealth service, including the individual’s home.
Providing that no payment of an originating site facility fee may be made to any “new” approved originating sites during the PHE.
Delaying the requirement for an in-person visit with a physician or other qualified practitioner within six months prior to mental health services furnished by telehealth. In response to commenters’ concerns about the administrative burdens of adjusting to meet the in-person visit requirement amidst the uncertainty of the end date of the PHE, as well as the potential impact on patients with complex mental health conditions, CMS stated that it does not interpret the statute as applying this in-person visit requirement for beneficiaries who began receiving mental health services via telehealth during the PHE or in the 151 days following the end of the PHE. Instead, the requirement for an in-person visit within six months prior to the initiation of mental health services via telehealth will apply to beneficiaries who begin receiving services after the 151-day period ends.
Expanding the definition of eligible telehealth practitioners to include qualified occupational therapists, physical therapists, speech-language pathologists and audiologists.
Continuing payment for Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) providing telehealth services and delaying the in-person visit requirements for mental health visits furnished by RHCs and FQHCs until 152 days after the end of the PHE.

In the Final Rule, CMS reminds stakeholders that on the 152nd day following the end of the PHE, Medicare telehealth services will again be subject to the restrictions set forth in the Social Security Act, including the geographic and originating site limitations placed on telehealth reimbursement. Although several legislative attempts have been made since the onset of the PHE to lift these restrictions permanently, none have been successful to date.

Use of Modifiers for Medicare Telehealth Services Following the End of the PHE

At the onset of the PHE, CMS instructed practitioners to use an in-person place of service (POS) code (i.e., the code that would have been used had the service been provided in-person) and created an interim CPT telehealth modifier (modifier “95”) to be used for the duration of the PHE. CMS also maintained the facility payment rate for services billed using POS code “02.”

In response to commenters’ concerns regarding payment stability in a post-PHE period, CMS instructs providers in the Final Rule to continue, through the latter of the end of CY 2023 or the end of the calendar year in which the PHE ends, to bill telehealth claims with modifier “95” and the place of service indicator that would be used for an in-person visit.

CMS also states that beginning January 1, 2023, CPT modifier “93” must be used for eligible mental health services provided using audio-only technology. All providers must also append Medicare modifier “FQ” for allowable audio-only Medicare telehealth services. Providers may choose one where both “FQ” and “93” modifiers are appropriate and accurate.

Direct Supervision

In March 2020, CMS waived certain requirements to permit “direct supervision” during the PHE to include virtual presence using real-time audio/video technology. In the Final Rule, CMS states it expects virtual direct supervision will be sufficient through the end of 2023 but that it will not continue to permit virtual direct supervision outside the calendar year in which the PHE ends. While commenters expressed support for allowing virtual direct supervision outside the circumstances of the PHE, CMS concluded that it needs more time to gather data and evidence before deciding whether to allow virtual direct supervision permanently.

Remote Therapeutic Monitoring

The Final Rule also includes changes affecting billing and payment for remote therapeutic monitoring (RTM).

Following its establishment of a new set of codes providing reimbursement for RTM in the CY 2022 Medicare Physician Fee Schedule, CMS heard from many stakeholders expressing concern about the need to increase beneficiary access to RTM and reduce the burden on providers created by the requirement for direct supervision of personnel performing associated clinical labor tasks. CMS also cites confusion among providers about the role of nonphysician practitioners in these services.

In response, for CY 2023, CMS proposed the creation of new G-codes to allow certain RTM functions to be provided by nonphysician practitioners, and to value clinical labor activities that may be furnished by auxiliary personnel under “general” supervision. However, in the Final Rule, CMS declines to finalize these codes, primarily citing continued confusion among providers about the coding and payment structure for RTM. Instead, CMS preserves its current payment policy for RTM with modifications; importantly, CMS clarifies that RTM services may be furnished under general supervision. Although CMS indicates that it will consider future rulemaking code revisions for RTM, including codes that may require fewer than 16 days of data collection for RTM devices, the 16-day requirement remains in effect for codes 98975, 98976 and 98977 for CY 2023.

Please contact the authors if you have any questions about the changes related to the telehealth in the Medicare Physician Fee Schedule for CY 2023.

Series: Changes to Medicare Physician Fee Schedule for CY 2023

On November 2, 2022, the Centers for Medicare & Medicaid Services filed a final rule implementing changes to the Medicare Physician Fee Schedule for CY 2023 (Final Rule). Within this Final Rule are significant changes for various healthcare industry sectors. The healthcare attorneys at Bass, Berry & Sims have reviewed the Final Rule and have provided an in-depth analysis broken down by topic. Additional installments in this series focus on updates related to: