A first look at the Medicare CY 2023 Physician Fee Schedule Proposed Rule

Topping the list of significant updates and policy changes are efforts by the Centers for Medicare and Medicaid Services (CMS) to increase provider participation in accountable care organizations (ACOs) and expand beneficiary access to behavioral health services.

CMS has released its annual proposed rulemaking with payment and policy changes to the Medicare Physician Fee Schedule (PFS) for calendar year (CY) 2023. Reflecting the agency's priorities to advance equity and accessibility through value-based care, the PFS proposed rule specifically aims to increase ACO participation in underserved communities and improve access to behavioral healthcare. Also contained within the 2,066 page-rule are payment updates and policy changes concerning telehealth services, Evaluation and Management visits, the Medicare enrollment and screening process, the administration of preventative vaccines and monoclonal antibodies, modifications to the Quality Payment Program and updates to the PFS conversion factor, among many others.

Providers should carefully evaluate the far-reaching proposals set forth in the PFS proposed rule, and consider submitting comments to ensure their voices are heard as CMS contemplates making these proposals final. The PFS proposed rule is slated for publication in the Federal Register on July 29, 2022. Based upon this publication date, the comment period closes on September 6, 2022.

Key highlights outlined in the PFS proposed rule include the following:

Medicare Shared Savings

According to CMS, the proposed changes to the Medicare Shared Savings Program (MSSP) are designed to advance CMS's overall value-based care strategy of program growth, alignment and equity. The proposed changes also represent CMS's attempt to reverse certain trends in the MSSP that CMS has observed over the last several years, including the leveling of the number of Medicare beneficiaries assigned to ACOs, an increase in underrepresented higher spending populations and inequitable access to ACOs by certain patient populations. As such, CMS's proposed changes to the MSSP are intended to, among other things, advance equity within the MSSP by increasing the participation of healthcare providers in ACOs within rural, minority and other underserved communities. To that end, Norton Rose Fulbright has prepared this analysis of the key Shared Savings proposals in the CY 2023 PFS proposed rule.

Behavioral health services

The PFS proposed rule is intended to address behavioral health needs in rural and underserved areas in different ways. First, the proposed rule would ease the supervision requirement to allow marriage and family therapists, licensed professional counselors, addiction counselors and others to provide behavioral health services without a doctor or nurse practitioner physically on site (so long as they have general access to them).

Second, with respect to the opioid epidemic, the proposed rule would allow Opioid Treatment Programs to provide services through mobile units without obtaining a separate registration. The rule would also increase payment rates to Opioid Treatment Programs and allow initiation of buprenorphine for treatment of opioid use disorder over telehealth, rather than in person. Both of these measures would allow programs to better reach rural populations and homeless individuals.

The proposed rule is also designed to advance CMS's goal of integrated care by paying psychologists and social workers to help manage behavioral health needs as part of a primary care team (in addition to providing services on their own). It also proposes to strengthen coordinated care through ACOs through advanced shared savings payments to new, smaller ACOs to hire behavioral health practitioners.

The road to both fully closing gaps in behavioral health coverage in rural areas and full integration of behavioral health with physical health is long. Providers should consider whether the proposed rule goes far enough at this time to meaningfully impact these long neglected gaps.

Telehealth services

The PFS proposed rule provides that certain telehealth flexibilities will remain on the Medicare Telehealth Services List for 151 days following the expiration of the public health emergency (PHE) pursuant to the Consolidated Appropriations Act, 2022 (CAA). This would include payment for telehealth services furnished by rural health centers (RHCs) and federally qualified health centers (FQHCs) under the payment methodology established for the PHE and allowing telehealth services to be furnished in any geographic area and in any originating site (including the beneficiary's home) as well as on an audio-only basis for behavioral health, counseling and educational services. CMS further proposes to add several services to the Medicare Telehealth Services List on a temporary basis through the end of 2023, "some of which we had not previously added to the Medicare Telehealth List during the PHE, but will be added on a sub-regulatory basis…" The CAA delays the in-person visit requirements for behavioral health visits furnished by RHCs and FQHCs via telecommunications technology until 152 days after the end of the PHE.

Evaluation and management (E/M) visits

CMS proposes to delay the split (or shared) visits policy based on the amount of time spent by the billing clinician until January 1, 2024. As a result, the substantive portion of an E/M visit may be met by any of the following elements through the end of 2023: (1) history, (2) performing a physical exam, (3) making a medical decision and or (4) spending time (more than half of the total time spent by the practitioner who bills the visit). CMS would also adopt "most" of the changes in coding and documentation developed jointly with the American Medical Association under the revised CPT E/M Guidelines for Other E/M visits, effective January 1, 2023, and says it will maintain the current E/M billing policies while the agency considers "potential revisions that might be necessary in a future rulemaking."

This is a welcome aspect of the proposed rules, as it prevents further reductions in reimbursement for providers who are still recovering from the coronavirus pandemic changes in patient care, supply chain shortages and overall stress in financials.

Conversion factor

The proposed rule reduces the PFS conversion factor to US$33.08 in CY 2023, which reflects a decrease of from the CY 2022 PFS conversion factor of US$34.61. In calculating the conversion factor for CY 2023, CMS included a zero percent statutory update factor, the expiration of a three percent increase implemented in CY 2022 under the Protecting Medicare and American Farmers from Sequester Cuts Act, and a statutorily required budget neutrality adjustment.

This reduction will place providers in a more financially precarious position post-pandemic.

Medicare enrollment and screening provisions

CMS proposes to use its authority under 42 CFR § 424.518 to require the reporting of any new owner (regardless of ownership percentage) via a change of information or other enrollment transaction (such as a full or partial certified supplier ownership change) and clarifies that providers and suppliers will be subject to "high-risk screening" if they are submitting a change in ownership application or an application to report a new owner. Such changes would apply to "all other enrolled and prospective providers and suppliers that have the same legal business name (LBN) and tax identification (TIN) number as the provider or supplier…"

This change can further complicate transactions in which multiple owners are involved if there is no specific limit on ownership percentage. This is an important consideration and change for healthcare transactions involving private equity, international transactions and other multi-owner ventures as it could extend the timing that is needed to move these transactions to fruition.

Administration of preventive vaccine and monoclonal antibodies

The proposed rule includes a geographic adjustment policy to reflect the cost of administering preventive vaccines (influenza, pneumococcal and hepatitis B) in each of the PFS fee schedule geographic regions for CY 2023 and subsequent years. This is a reflection of the focus on vaccine promotion and public health post-pandemic and is a welcome addition.

The payment amount would be updated annually based on the increase in the measure of inflation and the locality where the preventive vaccine is administered using the geographic adjustment factor. CMS proposes to align the payment rate for the administration of the COVID-19 vaccine with the other Part B preventive vaccines effective January 1 of the year following the year in which the PHE ends. Additional payment for at-home COVID-19 vaccinations would also continue for CY 2023. Finally, CMS clarifies that the policies finalized in the CY 2022 PFS final rule with respect to the administration of the COVID-19 vaccine and monoclonal antibody products will continue until the emergency use authorization (EUA) declaration for such drugs and biological products is terminated.

Modifications to the Quality Payment Program

Under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the Quality Payment Program (QPP) provides clinicians with two participation tracks based on their practice size, specialty, location or patient population: (1) the Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs), and (2) the Advanced Alternative Payment Models (APMs). Key highlights from the proposed QPP provisions include the following:

MVPs

For the CY 2023 reporting period, CMS adds five new MIPS MVPs (Advancing Cancer Care, Optimal Care for Kidney Health, Optimal Care for Neurological Conditions, Supportive Care for Cognitive-Based Neurological Conditions and Promoting Wellness), and modifies the seven MVPs established by the CY 2022 PFS final rule. With respect to subgroup reporting, CMS proposes options for reporting subgroup participation and provides that subgroup reporting will be voluntary for the CY 2023, 2024 and 2025 performance periods/2025, 2026 and 2027 MIPS payment years.

APM entities

CMS proposes several changes to scoring and requirements under the promoting interoperability performance category and introduces a voluntary reporting option for APM Entities to report the promoting interoperability performance category at the APM Entity level beginning with the 2023 performance period. The agency also proposes to increase the data completeness criteria threshold from 70 percent to 75 percent for the CY 2024 and 2025 performance periods/2026 and 2027 MIPS payment years and to establish a set of 195 quality measures. CMS further proposes to expand the definition of "high priority measure" to include health equity quality measures. Notably, for the 2023 performance period/2025 MIPS payment year, a facility-based MIPS-eligible clinician would be eligible to receive the complex patient bonus, even if they do not submit data for at least one MIPS performance category, according to the PFS proposed rule.

Finally, the PFS proposed rule provides for a number of requests for information and stakeholder input with regard to the future of the QPP.

Special thanks to Senior Health Care Analyst Kathleen P. Rubinstein (Houston) for her assistance in the preparation of this content.