he 2023 Physician Fee Schedule updates include new billing codes and more ways to access care

Each year, the Centers for Medicare & Medicaid Services (CMS) releases several policy proposals and updates with many taking effect on January 1 of the new calendar year. At practices where revenue is directly tied to Medicare reimbursement, it’s important to understand how new rates and coding requirements evolve. While this year sees a number of changes across all specialties, we’ve spotlighted the updates that may be of particular interest to you.

Here, we’ll discuss a few key changes related to the Physician Fee Schedule (PFS) for 2023. For more on how ModMed® can help your practice streamline billing and coding, book a demo now.

2023 Physician Fee Schedule Conversion Factor

In November 2022, CMS released the Calendar Year (CY) 2023 Physician Fee Schedule (PFS) final rule. The rule originally reduced the conversion factor down by $1.55, from $34.61 to $33.06. However, following an adjustment by Congress in the Consolidated Appropriations Act 2023 (Public Law No. 117-328), which staved off certain Medicare cuts, CMS updated the CY 2023 conversion factor in January 2023 to $33.8872.

In its fact sheet, CMS explained that budget neutrality impacts the final rule. Budget neutrality refers to a fiscal policy, codified by US law, that requires the Medicare PFS to maintain a generally fixed budget. The 2023 conversion factor was also impacted by the expiration of the temporary 3% supplemental increase to PFS payments from 2022.

Split/Shared E/M Visit Policy Delay

CMS has delayed implementation of its change to the split or shared visits policy. The proposed rule was designed to determine which provider bills for a shared visit by redefining the “substantive portion” of the visit. This change is on hold until January 1, 2024, so that CMS may consider further feedback.

A split/shared evaluation and management (E/M) visit is one performed by a physician and non-physician practitioner (NPP), billing in the same specialty group, under the same tax identification. Patients usually attend this type of visit in a hospital facility or other group setting. In the nonfacility or office setting, the rules for “incident to” billing apply, but “incident to” billing is not available to services performed in a facility setting. Longstanding CMS policy has been that the physician may bill for split or shared visits in a facility if the physician performs a substantive portion of the encounter. For CY 2022, CMS finalized the definition of “substantive portion” as one of the following: history or exam or medical decision-making (MDM) or more than half of total time.  For CY 2023, the definition of “substantive portion” was intended to be limited to more than half of total time. However, many providers expressed concerns with this policy and requested that CMS also recognize MDM as the substantive portion. After consideration of this feedback, CMS is delaying implementation of the definitional change.

Historically, physicians performed the substantive part of visits. However, as healthcare evolves, a broader range of providers have more responsibility, and billing rules could change to reflect the industry shift.

For example, the American Association of Nurse Practitioners notes in a heat map that 27 states are a full-practice environment for nurse practitioners, meaning they can evaluate, diagnose, order and interpret tests, and initiate and manage treatments, including prescription management.

Potential changes to the way in which practices may bill for these nurses and other nonphysician providers could impact practice revenue, because physicians receive a higher reimbursement than other providers. For now, these changes are on hold, but providers in facility settings may wish to monitor CMS policymaking on this topic.

Telehealth Billing Place of Service

For physicians and their patients who have become accustomed to telehealth to provide or receive healthcare, Medicare will continue to reimburse physicians for calendar year 2023 using modifier 95. However, after the public health emergency, new billing requirements will apply.

Some telehealth regulations are directly tied to the COVID-19 public health emergency. At the onset of the pandemic, telehealth became a vital way for providers to care for patients in the absence of in-person visits. Before the public health emergency, more stringent rules applied for Medicare coverage of telehealth, including requiring patients to travel to a designated originating site. Under the public health emergency, physicians can bill Medicare for services provided even when patients are in their homes.

In the final rule, CMS stated that to facilitate payment stability after the public health emergency, Medicare will reimburse using the POS applicable if the service had been furnished in person “through the latter of the end of CY 2023 or the end of the calendar year in which the [public health emergency] ends.” As of this writing, the public health emergency officially extends through April 11, 2023. Therefore, the telehealth billing rules will apply through at least December 31, 2023.

New Chronic Pain Billing Codes

Two new Healthcare Common Procedure Coding System (HCPCS) codes are available for calendar year 2023. New codes G3002 and G3003 allow physicians and certain nonphysician providers to bill for chronic pain management:

  • G3002 allows billing for chronic pain management and treatment as a monthly bundle if at least 30 minutes of care has been provided when certain conditions are met.
  • G3003 allows billing for each additional 15 minutes of chronic pain management care provided. There is no limit to the number of times a physician uses this code, as long as care is medically necessary, but CMS will be monitoring use of this code going forward.

For calendar year 2023, certain specialties, like pain management or orthopedics, may find that these codes impact their practices by establishing reimbursement for comprehensive pain management, including by NPPs, and allowing practices to streamline billing for pain patients.

With the new codes, specialty-specific physicians can bill for time they spend monitoring patients, allowing them to focus on providing high-quality care that may result in better patient outcomes.

Physicians should also note that the new Physician Fee Schedule also lists updates to chronic care management, separate from chronic pain, which are for patients with two or more chronic conditions.

New Allowable Billing for Audiologists

Additional new CMS policy allows audiologists to bill directly for nonacute hearing assessments once every 12 months per beneficiary without an order from a physician or nonphysician provider. CMS advises in its fact sheet that the change requires several adjustments to its claims processing systems, so there may be a period of operationalization, but use of modifier AB for dates of service on and after January 1, 2023, is compliant with the new rule.

For otolaryngologists with audiology services at their clinics, this new rule may require shifts within your business, too. By streamlining required processes, audiology business units may be able to scale into new patient engagement efforts that allow a direct rapport with patients and enhanced availability of medically necessary services.

Skin Substitute Billing and Terminology

The 2023 Physician Fee Schedule still allows billing for skin substitutes. For physicians using skin substitutes in their practice, the allowance is an important one.

Initially, proposals sought to treat and pay for skin substitutes furnished in the office setting as “incident-to supplies” (billing them as part of a procedure). That would have meant that CMS would not pay separately for skin substitutes under a traditional Average Sales Price (ASP) + 6% payment methodology.

CMS concluded that it would be beneficial to provide interested parties additional opportunities to comment on the specific details of proposed changes in coding and payment for skin substitute products. Therefore, CMS will be hosting a town hall on this topic and will take into account public feedback in updated proposed policies to be issued in future rulemaking. Final changes are not anticipated to be effective until at least CY 2024.