What’s in the Medicare Physician Fee Schedule proposed rule?

Jonathan Rubenstein, MD

On July 7, 2022, the Centers for Medicare & Medicaid Services (CMS) released the calendar year 2023 Medicare Physician Fee Schedule (MPFS) proposed rule. This outlines the proposed updates for payment and policy starting January 1, 2023. As always, there is a comment period, after which CMS must respond and react to each comment received.

Mark Painter

What follows are some of the most notable areas of interest to urologist and urology practices.

Conversion factor: The conversion factor for 2023 is set to decrease by approximately 4.4% from $34.6026 to $33.0775. The decrease is due to the expiration of a 1-year 3% increase that was enacted by law last year coupled with a mandated 0% increase.

Clinical labor update: CMS is changing the update process for clinical labor included in the calculation of the practice expense component within the MPFS. We are currently in the second year of this change. Medicare has indicated that it is continuing to examine the process it is using to increase the transparency and consistency of this update moving forward.

Medicare is updating the malpractice component of the fee schedule as well. Urology is projected to face a 1% decrease in Medicare payments related to these changes. The impact to group practices and the individual physicians, however, varies based on practice type and mix of patients and services provided to those patients. Note: The impact of relative value unit (RVU) changes is independent of the conversion factor change noted above.

Global surgical services: Of particular interest to specialists such as urologists, CMS is seeking comment on “improving” payment for the global surgical package and seeking comment on strategies that will make global surgical payment “fair and equitable.”

Evaluation and management (E/M) services revisions for hospital inpatient and observation services and outpatient consultation services: CMS is proposing to adopt nearly all the revisions for Current Procedural Terminology (CPT) codes used to report E/M visits, including inpatient and observation hospital services. The changes include revisions to the documentation guidelines and to the descriptors, which will mirror the revisions previously made to the Office or Other Outpatient E/M services in 2021. Inpatient E/M code level may be chosen based on time or medical decision-making; like office and other outpatient codes, documentation for patient history and exam sections needs to be medically appropriate but is no longer used to determine code level. In addition to hospital inpatient and observation services, the update will include emergency department, nursing facility, home or residence services, and cognitive impairment assessment services. (Outpatient and inpatient consultation services will also be updated, although these services are not recognized by Medicare.) As part of the expansion of these guidelines, there will no longer be unique codes for inpatient and observation unit codes, but rather, the observation codes will be eliminated and the descriptor for the previous inpatient hospital codes will now describe hospital or observation services (initial, subsequent, discharge, and admit/discharge).

RVU changes: There will be a number of small adjustments to RVUs in urology only, but the codes listed in Table 1¹ and Table 2¹ will see changes greater than 5% up or down for 2023.

New and updated urology CPT codes: CPT codes 50080 and 50081 are undergoing a description change that has resulted in the changes noted in Table 1. Code 558XX is a new CPT code for laparoscopic simple prostatectomy, which has affected the value of the other prostatectomy codes listed in Table 1.

Split/shared services: CMS has proposed to delay until 2024 the change requiring split/shared services policy to be determined solely by the qualified health professional (QHP) spending the most time with the patient on the date of service. Current CMS rules allow that the QHP documenting the most substantive portion of a visit, history, physical exam, or medical decision-making or determined by more than half the total time spent with the patient on the date of service is allowed to bill for the service. For 2023 and recommended for 2022, we would recommend the QHP documenting the most substantive portion of medical decision-making or documented as having spent the most time dedicated to the visit should be the billing QHP.

Telehealth: The secretary of the US Department of Health and Human Services (HHS) signed an extension to the COVID-19 public health emergency (PHE) allowing for continued use of telehealth and telephone visits regardless of patient location until October 13, 2022. By law, a PHE can only be enacted for 90 days; the PHE for COVID-19 originally enacted on January 31, 2020, has been renewed each 90 days as it approached expiration. The HHS secretary has indicated his intention to provide 60-day notice before allowing the PHE to expire. Most expect the PHE to be extended again in October.

Updated Medicare Economic Index (MEI) for calendar year 2023: CMS is proposing to rebase and revise the MEI cost share weights for calendar year 2023 and is soliciting comment. The MEI measures the input price pressures of providing physician services. CMS is proposing a new methodology for estimating base year expenses that relies on publicly available data from the US Census Bureau’s North American Industry Classification System code 6211 Offices of Physicians to allow for the use of data that are “more reflective of current market conditions of physician ownership practices, rather than only reflecting costs for self-employed physicians, and will allow for the MEI to be updated on a more regular basis.” Using the new MEI cost weights to set MPFS rates would not change overall spending on MPFS services but would likely result in significant changes to payments among MPFS services. In consideration of its ongoing efforts to update to MPFS payment rates with more predictability and transparency, and in the interest in ensuring payment stability, CMS is proposing not to use the proposed updated MEI cost share weights to set MPFS payment rates for calendar year 2023. However, CMS is soliciting comments on the potential use of the proposed updated MEI cost share weights to calibrate payment rates and update the Geographic Practice Cost Index under the MPFS in the future.

Requiring manufacturers of certain single-dose container or single-use package drugs to provide refunds with respect to discarded amounts: Section 90004 of the Infrastructure Investment and Jobs Act amended section 1847A of the act, adding provisions that require manufacturers to provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use-package drug. The refund amount is the amount of discarded drug that exceeds an applicable percentage, which is required to be at least 10% of total allowed charges for the drug in a given calendar quarter. The proposals to implement section 90004 of the act include how discarded amounts of drugs are determined, a definition of which drugs are subject to refunds (and exclusions), when and how often CMS will notify manufacturers of refunds, when and how often payment of refunds from manufacturers to CMS is required, refund calculation methodology (including applicable percentages), a dispute resolution process, and enforcement provisions. Although this proposal does change reimbursement protocols for physicians or change reporting requirements for physicians, if adopted as proposed, it may affect some pharmaceutical companies and the packaging of certain drugs.

Reference

1. Proposed rule. Fed Regist. Published online July 29, 2022. https://bit.ly/3p0ZlAf