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11/02/2022

CMS released its final rule for the calendar year 2023 Medicare Physician Fee Schedule and updates to the Quality Payment Program

On November 1, 2022, the Centers for Medicare & Medicaid Services (CMS) released its final rule for the calendar year (CY) 2023 Medicare Physician Fee Schedule (PFS) and updates to the Quality Payment Program (QPP). CMS also released its final rule for the CY 2023 Hospital Outpatient Prospective Payment System (OPPS) the same day. The Association for Clinical Oncology (ASCO) is still assessing the rules, but based on a preliminary analysis, key provisions for the cancer care community include:

2023 Medicare Physician Fee Schedule
Conversion Factor
CMS has finalized a Physician Conversion Factor of $33.0607 for 2023, which represents an approximately 4.47% reduction from the 2022 Physician Conversion Factor of $34.6062. The conversion factor reflects a statutorily required 0% update to physician reimbursement in 2023, the expiration of a 3% reimbursement increase Congress funded for 2022, and a statutorily required budget neutrality adjustment. ASCO continues to push Congress to offset these physician payment cuts in 2023.

Specialty Impact
CMS estimates a negative 1% overall impact for the hematology/oncology specialty and the radiation oncology specialty in 2023. This estimate does not include the reduction to the conversion factor. The actual impact on individual clinicians, however, will vary based on geographic location and the mix of Medicare services they bill.

Split/Shared Visits
CMS will maintain the 2022 definition of the “substantive portion” of an evaluation and management (E/M) service performed by both a physician and a non-physician practitioner in a facility setting through 2023. Clinicians who furnish the split/shared visit will continue to be able to choose from history, physical exam, medical decision making, or more than half of the total practitioner time spent to define the substantive portion of a service to determine which practitioner will bill the visit.

Evaluation and Management Services
As part of the ongoing updates to coding guidelines for E/M services, the American Medical Association’s (AMA) CPT Editorial Panel approved revised coding and updated guidelines for Other (hospital inpatient, hospital observation, emergency department, nursing facility, home or residence services, and cognitive impairment assessment) E/M visits. Effective January 1, 2023, CMS will adopt most of AMA’s changes, including:

  • New descriptor times (where relevant)
  • Revised interpretive guidelines for levels of medical decision making
  • Choice of medical decision making or time to select code level (with several exceptions)
  • Eliminated use of history and exam to determine code level

CMS is finalizing its proposal to create Medicare-specific coding for the payment of Other E/M prolonged services, similar to what it adopted for CY 2021 for the payment of Office/Outpatient prolonged services.

Visit ASCO Practice Central for 2023 E/M coding and billing resources.

Telehealth
CMS finalized its proposals extend certain Medicare telehealth flexibilities adopted during the COVID-19 public health emergency (PHE) for 151 following the expiration of the PHE. The PHE was recently renewed through January 11, 2023. Flexibilities include allowing telehealth services to be furnished in any geographic area and in any originating site setting (including the beneficiary’s home) and allowing telehealth visits to be audio-only.

Colorectal cancer screening
CMS will reduce the minimum age requirement for certain colorectal cancer screening tests to 45 years. It will also cover one follow-on screening colonoscopy after a Medicare covered, non-invasive, stool-based colorectal cancer screening test returns a positive result. No beneficiary co-pays will be required for these tests.

Quality Payment Program
Merit-Based Incentive Payment System (MIPS) Performance Threshold
CMS will set the MIPS performance threshold at 75 points for 2023. The 2022 performance year (2024 payment year) is the final year that clinicians are eligible to earn either a 5% Advanced Alternative Payment Model (APM) incentive payment or a MIPS exceptional performance bonus.

MIPS Value Pathways
CMS has finalized five new MIPS Value Pathways (MVPs), including an oncology-specific MVP, that will be available for the 2023 performance year:

  1. Advancing Cancer Care
  2. Optimal Care for Kidney Health
  3. Optimal Care for Patients with Episodic Neurological Conditions
  4. Supportive Care for Neurodegenerative Conditions
  5. Promoting Wellness

For the 2023, 2024, and 2025 performance years, individual clinicians, single specialty groups, multispecialty groups, subgroups, and APM Entities may participate in MVPs. Subgroup reporting will be voluntary for the 2023, 2024, and 2025 performance years; however, beginning in 2026, multispecialty groups will be required to form subgroups to participate in MVPs.

Hospital Outpatient Payments
Payments for 340B Drugs
In November 2017, the Centers for Medicare & Medicaid Services (CMS) finalized a controversial policy for 2018 that dramatically reduced the reimbursement rate for separately payable drugs in the 340B Drug Pricing Program to Average Sales Price (ASP) minus 22.5%. In June 2022, however, the Supreme Court ruled that the Department of Health and Human Services (HHS) may not vary reimbursement rates for drugs and biologicals among groups of hospitals without conducting a survey of hospital acquisition costs. In September 2022, following a United States District Court ruling, CMS reinstated a reimbursement rate of ASP plus 6% percent for 340B drugs, which was the rate prior to January 1, 2018.

As indicated in the proposed rule, CMS finalized a reimbursement rate ASP + 6% for 340B drugs in 2023. To maintain budget neutrality within OPPS, all non-drug services for 2023 will receive a minus 3.09% payment cut. The agency will address how it will account for the reduced 340B drug payments made between January 2018 and September 2022 through rulemaking before the release of the 2024 OPPS proposed rule in July 2023.

Prior Authorization
CMS continues to advance its Prior Authorization program in Medicare; however, new additions to the list of items or services requiring prior authorization are not directly related to cancer care. For example, CMS is adding facet joint interventions as a category of services that requires hospital outpatient departments to receive prior authorization beginning July 1, 2023.

For more detailed analyses in the coming days, please visit ASCO in Action.

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