CMS Issues Final Rule on 2023 Medicare Physician Payment

The federal government approved a decrease in the “conversion factor” used to calculate physician payment that will result in an overall cut to physician reimbursement under the Medicare program for 2023. The change goes into effect on January 1, 2023.

As part of the 2023 Final Medicare Physician Fee Schedule issued November 1, the conversion factor will decrease by $1.53, or 4.42% of last year’s conversion factor. The conversion factor is a variable that is multiplied by the relative value unit (RVU) assigned to every physician service or procedure to derive payment for that particular service or procedure. A decrease in the conversion factor results in an overall average decrease in reimbursement for all physicians; how it will affect each physician depends on that physician’s practice patterns, geographic location, and other factors.

The decrease is due largely to the fact that a 3% increase legislated by Congress last year will expire. Additionally, there is a further 1.5% decrease to the conversion factor that is the result of budget-neutrality requirements mandating a downward shift in payment to account for increases in utilization and total relative value units.

In a September letter to CMS Administrator Chiquita Brooks-Lasure, APA CEO and Medical Director Saul Levin, M.D., M.P.A., said proposed payment cuts will only exacerbate the nation’s mental health crisis and added that President Joe Biden has stated that access to mental health and substance use treatment is a priority for his administration (APA Registers Concerns About Potential Cuts to Medicare Physician Payment).

In positive news, CMS approved increased payment for services in facility settings and services provided in the home—a provision supported by APA—and aligned the rules for evaluation and management (E/M) code selection and documentation in these settings with the requirements currently in place for outpatient E/M services.

Overall, the new fee schedule provides some clarity around the psychiatric practice and reimbursement landscape after the expiration of the COVID-19 public health emergency (PHE), which is expected to end in 2023.

The COVID-19 PHE was last renewed on October 13, 2022, for 90 days, marking January 11, 2023, as either the next renewal date or the end of the PHE. Congress has already passed into law a 151-day extension beyond the end date of the PHE of many of the telehealth flexibilities authorized as part of Medicare’s pandemic response.

Importantly for psychiatry, some flexibilities—like the waiver of in-person visit requirements for the prescription of controlled substances—are not eligible for the 151-day extension, and barring further rulemaking, in-person visits will again be required for prescription of controlled substances.

The final rule has made permanent coverage for audio-only mental health telehealth services, the only category of services that will be eligible for audio-only delivery on a permanent basis after the PHE.

Once the 151-day extension ends, psychiatrists should plan to see all established patients in person within 12 months. New patients must be seen in person before receiving telehealth services and once a year thereafter. Patients who established care via telehealth during the PHE or during the 151-day extension will be considered established patients.

Some exceptions are allowed to the required subsequent 12-month in-person visits based on hardship; the hardship must be documented in the patient’s medical record with a clear reason for the exception—such as significant travel time, mobility challenges, or scheduling unavailability for either patient or provider. ■