Yesterday, the Centers for Medicare and Medicaid Services (CMS) proposed its calendar year (CY) 2023 updates to the Medicare Physician Fee Schedule (PFS) (proposed rule; fact sheet on Shared Savings Program proposals; fact sheet on Quality Payment Program proposals; press release). This annual proposed rule would revise payment policies under the Medicare physician fee schedule and make other policy changes to payments under Medicare Part D — to be applied to services furnished beginning January 1, 2023, if finalized. Additionally, this rule proposes updates to the Quality Payment Program (QPP) in an effort to increase clinician participation through the Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) and encourage participation in Advanced Alternative Payment Models (APMs), among others.  

This major proposed rule proposes to update the CY 2023 PFS conversion factor to $33.08, a decrease of $1.53 from the CY 2022 PFS conversion factor of $34.61. Additionally, the proposed rule would extend certain Medicare telehealth flexibilities adopted during the public health emergency (PHE) for 151 days after its expiration. Notably, if finalized, this proposed rule would expand access to substance use disorder (SUD) treatment by allowing Medicare to cover opioid use disorder (OUD) services furnished by opioid treatment programs (OTP) and by utilizing telehealth services and mobile components to reach underserved areas. In light of the Biden administration and Congress’ focus on mental health care over the course of the past year, CMS is proposing to expand access to mental health services by allowing Medicare to directly reimburse certain practitioners including, but not limited to, marriage and family therapists, licensed professional counselors, certified peer recovery specialists, and addiction counselors.  

CMS is proposing to make several updates and changes to reverse recent downward growth in the Medicare Shared Savings Program and encourage more participation in accountable care organizations (ACO). This proposed rule would allow for advanced payments for certain low-volume ACOs, provide smaller ACOs more time to shift to downside risk, and update its benchmark methodology to reduce biased regional expenditure calculations to advance health equity in the program. The proposed rule also includes a few notable policy changes related to payment for services provided by rural health clinics (RHC) and Federally Qualified Health Centers (FQHC). 

Key policies changes outlined in the proposed Medicare PFS include: 

Conversion Factor — The proposed CY 2023 PFS conversion factor is $33.08, a decrease of $1.53 from the CY 2022 PFS conversion factor of $34.61. The CY 2023 proposed conversion factor is a result of: (1) the statutorily required budget neutrality adjustment; and (2) the expiration of a three percent increase in physician payments in 2022, implemented by the Protecting Medicare and American Farmers from Sequester Cuts Act. 

Telehealth Services — In this proposed rule, CMS is proposing to implement provisions of section 1834(m) of the Social Security Act — including the amendments made by the Consolidated Appropriations Act (CAA), 2021 — and provisions of the CAA, 2022 that extend certain Medicare telehealth flexibilities adopted during the PHE for 151 days after the end of the PHE.  

Reimbursement for “Incident to” Physicians’ Services for Behavioral Health Providers — Under current regulations, there is no separate Medicare benefit category for services provided by licensed professional counselors (LPCs) and licensed marriage and family therapists (LMFTs). Therefore, Medicare payment for such services can only be made indirectly when an LPC or LMFT performs services as auxiliary personnel incident to, the services, and under direct supervision, of the billing physician or other practitioner. Under this proposed rule, CMS is proposing to permit LPCs or LMFTs to perform behavioral health services under general supervision of a physician or non-physician practitioner (NPP) when such services are provided incident to the services of a physician or NPP. Notably, the physician supervising the services is not required to be the same physician who is treating the patient more broadly. Furthermore, these practitioners can provide services without a doctor or nurse practitioner physically onsite, making it easier for rural and underserved communities to access services. 

Requirements for Manufacturers of Certain Single-dose Container or Single-use Package Drugs — The Infrastructure Investment and Jobs (IIJ) Act required manufacturers to provide CMS with a refund for certain discarded amounts of a refundable single-dose container or single-use package drug. CMS is proposing, as required by the IIJ Act, to implement provisions surrounding: (1) the definition of drugs subject to refunds and exclusions; (2) how discarded amounts of drugs are determined; (3) the frequency of notification by CMS to manufacturers of refunds; (4) the required frequency of payments to CMS; (5) refund calculation methodology; (6) enforcement mechanisms; and (7) a process for dispute resolutions. CMS, in the proposed rule, notes that it welcomes public comment on the specifics of the aforementioned proposals.  

ESRD Payments — The proposed rule notes that current guidance describing specimen drawings for ESRD patients is no longer applicable and would be removed from the manual. This payment is made through the ESRD bundled payment to the ESRD facility. 

Medicare Shared Savings Program Requirements — In the accompanying fact sheet, CMS notes that several of the proposals put forth in yesterday’s proposed rule seek to reverse recent trends as well as advance equity within the Shared Saving Program. The rule proposes the following changes: 

Medicare Provider and Supplier Enrollment Changes — Under authority granted to CMS by the ACA, section. 424.518 outlines levels of screening by which CMS and its MACs review initial applications, revalidation applications, and applications to add a practice location, in which the categories and requirements are based on level of risk of fraud, waste, and abuse posed by a certain provider or supplier. CMS is proposing to add to section 424.518 language to require the reporting of any new owner via a change of information or other enrollment transaction. This proposal would also clarify that the provider and suppliers are subject to high-risk screening if they are submitting a change of ownership application or an application to report a new owner. Additionally, in order to clarify the extent of such adjustments to the screening levels, CMS is proposing to add language specifying that any adjustment made will apply to all other enrolled and prospective providers and suppliers with the same legal business name or tax identification number as the originally screened provider or supplier which triggered a screening level increase. Lastly, due to several cases of abuse and fraud in SNFs, CMS is proposing to move all SNFs from the "limited” level of categorical screening to the highest screening level.  

Updates and RFIs on QPP Incentives — In this proposed rule, CMS is continuing to move the QPP forward to focus on measurement efforts, refine how clinicians would be able to participate in a more meaningful way through the MIPS MVPs, and encourage participation in APMs.  

Conditions of Payment for DMEPOS Suppliers — CMS is proposing several changes to OIG definitions and authorities. Specifically, CMS is proposing to include managing organizations —as well as officers and directors of providers and suppliers — under CMS’s jurisdiction to deny or revoke providers’ or suppliers’ enrollment if the entity is furnishing services that are being paid for by a federal health care program. The agency also proposes to expand its authority to deny or revoke enrollment if a provider has a felony conviction (within the last 10 years) to include managing organizations, officers, and directors. For the sake of consistency, CMS is also proposing to add managing organizations, officers, and directors to the existing policy that program revocations and denials can be reversed if the provider or supplier terminates its contract and submits proof within 30 days of doing so. The agency is also proposing to clarify that CMS can bar participation from DMEPOS programs if the supplier or provider is barred from other state or federal health programs, if all appeals are exhausted or if the window for filing an appeal has expired. Additionally, CMS is proposing to add new provisions to its risk designation categories, including a change of ownership application, clarification of the scope of adverse actions conducted by a provider or supplier, and automatically categorizing initially enrolling SNFs into the high-level risk category. Regarding DMEPOS supply standards, CMS is proposing to add a new condition of payment requiring all suppliers to be in compliance with conditions of payment, which notably include that the supplier must comply with all state and federal licensure requirements.  

Furnishment of Certain Diagnostic Tests Without a Physician Order by Audiologists — Although some stakeholders have argued that removing the treating physician or practitioner order requirement for audiology hearing and balance assessment services would increase access, CMS decided against proposing such a measure, citing patient safety concerns as reasoning. Instead, CMS opted for a more narrowly tailored proposal that would remove the order requirement under certain circumstances for certain audiology services furnished personally by an audiologist for non-acute hearing conditions. By providing a narrow exception for non-acute hearing conditions, CMS hopes to increase access while ensuring that beneficiaries are still evaluated clinically for any serious medical conditions.  

RHCs and FQHCs — The proposed rule includes a few policy changes related to payment for services provided by RHCs and FQHCs. 

Medicare Part B Payment for Preventive Vaccine Administration Services — In the CY 2022 PFS final rule, CMS decoupled payment for vaccine administration services from the PFS crosswalk and finalized flat payment rates for influenza, pneumococcal, HBV, and COVID-19 vaccines. However, CMS inadvertently neglected to address a geographic adjustment policy for these payment rates. Resultantly, CMS is proposing to adjust payments by the Geographic Adjustment Factor (GAF) for each fee schedule area in order to reflect each area’s cost of administering vaccines. CMS is also considering applying geographic practice cost indices (GPCI) to adjust for geographic variation in the direct costs of providing services and the indirect costs of maintaining a clinical practice. Finally, CMS proposes to account for any changes in cost by updating the flat payment amounts based on the annual increase to the Medicare Economic Index (MEI). 

Payment for Monoclonal Antibodies for Treatment or Prevention of COVID-19 — CMS is proposing to continue to pay for COVID-19 monoclonal antibody products used for the treatment (or post-exposure) of COVID-19 under the Part B vaccine benefit through the end of the calendar year in which the emergency use authorization (EUA) declaration for drugs and biological products ends. CMS notes that the agency intends to maintain the payment rate for administering a COVID-19 monoclonal antibody product used for treatment of COVID-19 in a healthcare setting described in the CMS COVID-19 Monoclonal Toolkit. Effective January 1 of the year following the year in which the EUA declaration ends, CMS is proposing that it will pay physicians and other suppliers of COVID-19 monoclonal antibody products using rates similar to what they are paid for administering other complex biological products. In the rule, CMS is also clarifying the agency’s policy that coverage and payment under the Part B vaccine benefit for monoclonal antibody products includes those used for pre-exposure prophylaxis for prevention of COVID-19.  

Non-Face-to-Face Services/ RTM Services — CMS elected to postpone developing a generic remote therapeutic monitoring (RTM) device code and is instead seeking comments related to existing RTM devices that meet the “reasonable and necessary” definition, including: (1) types of data collected; (2) how the data solves specific health conditions; (3) associated costs; (4) length of episode of care; and (5) number of potential beneficiaries.  

Evaluation/Management (E/M) Visits — CMS is proposing to adopt the revised CPT E/M Guidelines for Other E/M visits with the exception of prolonged services. These revised guidelines were developed jointly with the American Medical Association (AMA). Additionally, the proposed rule would adopt the general (Current Procedural Terminology) framework for Other E/M visits, such that practitioner time or medical decision-making (MDM) would be used to select the E/M visit level. This includes the listing of qualifying activities by the physician or NPP that count toward the time spent when time is used required to select the visit level. However, because CMS has interpreted this rule for O/O E/M visits — when time is used to select visit level — CMS is not proposing to adopt the general CPT rule that allows a billable unit of time to be considered as having been attained when the midpoint is passed. Additionally, CMS does not interpret the CPT E/M Guidelines as adopting this general CPT rule.