CMS releases final payment rules for 2023: 15 takeaways

CMS has published its annual payment updates for physicians, the Medicare shared savings program and outpatient and home health services for 2023. 

Here are 15 takeaways from the final rules, published Oct. 31 and Nov. 1: 

Physician Fee Schedule rule

1. The conversion factor used to calculate physician reimbursement will decline by $1.55 to $33.06 in 2023, representing a 4.48 percent decrease. CMS said the conversion factor accounts for the expiration of the 3 percent increase in physician fee schedule payments for 2022 — as required by the Protecting Medicare and American Farmers From Sequester Cuts Act — and the budget neutrality adjustment for changes in relative value units.

2. The agency finalized several policies related to telehealth, including extending numerous temporarily available telehealth services during the public health emergency through at least 2023. CMS said this will provide more time to collect data that could support their inclusion as permanent additions to its telehealth services list

3. In response to the increasing demand for behavioral health services, CMS said it will allow these services to be provided under the supervision of a physician or nonphysician practitioner — rather than under direct supervision — when such services are provided by "auxiliary personnel," such as licensed professional counselors or family and marriage therapists.

4. In an update to the Medicare Shared Savings Program, providers new to the initiative that are not renewing or reentering as an ACO and qualify as low revenue can receive a one-time payment of $250,000 and quarterly payments for the first two years of a five-year period. The advance payments would be recouped once an ACO begins generating shared savings in their current and next agreement periods. CMS said it will not move to recoup money from ACOs that do not generate savings, but those ACOs must remain in the program for the full five years.

Outpatient Prospective Payment System rule

5. CMS is increasing outpatient payment rates for hospitals that meet applicable quality reporting requirements by 3.8 percent. 

6. In line with the 2019 OPPS final rule — which finalized a proposal to apply the productivity-adjusted hospital market basket update to ASC payment rates through 2023 — CMS is also increasing pay rates by 3.8 percent for ASCs that meet applicable quality reporting requirements.

7. CMS is finalizing a general payment rate of average sale price plus 6 percent for drugs and biologicals acquired through the 340B drug pricing program.

8. The agency is finalizing separate payment in ASCs for five non-opioid pain management drugs that function as surgical supplies, including certain local anesthetics and ocular drugs.

Rural Emergency Hospitals rule

9. The agency established a new Medicare provider type called rural emergency hospitals, effective Jan. 1, to address concerns that rural and critical access hospital closures are reducing access to care for people in rural areas. 

10. The final rule broadly defines "REH services" to include all covered outpatient department services when provided by rural emergency hospitals, which will be paid for at a rate equal to the OPPS payment rate — for the equivalent covered outpatient department service — increased by 5 percent, according to the agency. Beneficiaries will not be charged coinsurance on the additional 5 percent payment. 

11. In 2023, rural emergency hospitals will receive a monthly facility payment that will increase in subsequent years by the hospital market basket percentage increase.

Home Health Prospective Payment System rule 

12. Home health agencies will receive a 0.7 percent Medicare payment boost, translating to an extra $125 million next year, according to the agency.

13. CMS said the increase reflects a 4 percent home health payment percentage, which will add $725 million, and a 0.2 percent increase because of an update to the fixed-dollar loss ratio used in calculating outlier payments, which will add $35 million. 

14. CMS payments to home health agencies will drop 3.5 percent next year after the agency found it has paid far more under the new patient-driven groupings model. An estimated $635 million will be docked from home health agency payments in 2023 and more cuts may be coming in the coming years. 

15. To make home health payments more predictable, the agency is finalizing a budget-neutral 5 percent cap on negative wage index changes for home health agencies to facilitate yearly changes in the pre-floor, pre-reclassified hospital wage index.

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