The Centers for Medicare and Medicaid Services (CMS) recently released the final rule and payment policies for next year. Due to budget neutrality rules, the 2024 physician fee schedule includes a 3.4% payment cut that will take effect unless Congress acts to stop the cut.

In the final fee schedule, the 2024 Medicare conversion factor was decreased from $33.8872 to $32.7375, with a corresponding reduction in anesthesia rates. Noridian—California’s Medicare contractor—has updated its 2024 Medicare Physician Fee Schedule to reflect these changes.

While there were also several draft legislative proposals circulating in Congress that would have resulted in substantial Medicare geographic payment cuts, the California Medical Association (CMA) was successful in stopping these proposals.

Initial highlights from the final rule include:

• Appropriate Use Criteria (AUC) Mandate Program: CMS finalized its proposal to pause implementation efforts of the AUC program, rescind current regulations and cease educational and operational testing. The agency says it will continue seeking a way to implement the program. Any new process will be proposed in future rulemaking.
• Split/Shared Billing Changes: CMS finalized a change in its definition of "substantive portion" to match that of the revised CPT E/M definition which is "more than half of the total time spent by the physician and NPP performing the split (or shared) visit, or a substantive part of the medical decision making (MDM) as defined by CPT." This effectively nullifies the prior, postponed policy that would have eliminated MDM as a deciding factor.
• G2211 Office/Outpatient E/M Visit Complexity Add-On HCPCS Code: CMS finalized its proposal to make this code "active" effective Jan. 1, 2024. Despite ACC's and others’ comments that the code was vaguely defined and the estimated utilization was too high, no changes were made to the utilization assumptions. This drives a portion of the budget neutrality conversion factor reduction.
• Updated Code Values for New/Revised Services: Final work RVUs and practice expense inputs are included in the rule that will determine payment rates in 2024 in various addenda tables. An updated calculator tool will be available soon.
• Telehealth Home Address Enrollment: Through CY 2024, CMS will continue to permit a distant site practitioner to use their currently enrolled practice location instead of their home address when providing telehealth services from their home. They will also consider this issue further for future rulemaking.
• QPP, MIPS, MVP, MSSP: The MIPS performance threshold is updated – leaving it at 75 points rather than increasing to 82 points – and the rule further refines MVPs and continues policies to align MSSP with MIPS.

CMA continues to urge Congress to stop the 3.4% cut and take action to provide financial stability for physician practices. Physician payment has already declined by 26% over the last two decades. With an expected 4.6% rise in health care inflation this year, the net impact on physician payments will be an 8% decrease in 2024, which will be devastating for physician practices and patient access to care in California.