CMS Releases 2023 Medicare Payment Final Rules

On November 11, the Centers for Medicare and Medicaid Services (CMS) issued final rules for the 2023 Medicare Physician Fee Schedule (PFS), Quality Payment Program (QPP), and Hospital Outpatient Prospective Payment System (HOPPS).  These policies are set to go into effect on or after January 1, 2023. Here are the highlights:

CY 2023 Medicare Physician Fee Schedule

Payment Policy Changes

The finalized CY 2023 PFS conversion factor is $33.06, a decrease of $1.55 from the CY 2022 PFS conversion factor of $34.61. This conversion factor accounts for the statutorily required update to the conversion factor for CY 2023 of 0%, the expiration of the 3% increase in PFS payments for CY 2022 as required by the Protecting Medicare and American Farmers from Sequester Cuts Act, and the statutorily required budget neutrality adjustment to account for changes in Relative Value Units. 

Changes in payment policy outlined in the final rule result in the overall average impact for the following specialties:

• Hematology/Oncology: -1%
• Radiation Oncology and Therapy Centers: -1%
• Urology: -1%
• Rheumatology: -2%
• Gastroenterology: -1%
• Diagnostic Testing Facility: 7%
• Independent Lab: 0%
• Ophthalmology: -1%
• General Surgery: -2%

Importantly, CMS notes this table does not capture the impact of the December 31, 2022 expiration of the 3.0% increase in PFS payments required by the Protecting Medicare and American Farmers from Sequester Cuts Act. Without additional Congressional action, the impacts above will be amplified by an additional 3.0% reduction. As expected, mitigation of the conversion factor will now turn to Congress.

Dental and Oral Health Services
Effective for CY 2023, CMS is finalizing its proposal to clarify and codify certain aspects of the current Medicare FFS payment policies for dental services when that service is an integral part of specific treatment of a beneficiary’s primary medical conditions, including extractions of teeth to prepare the jaw for radiation treatment of neoplastic disease. CMS is also finalizing payment for dental exams and necessary treatments prior to the treatment for head and neck cancers starting in CY 2024. CMS is also finalizing a process in CY 2023 to review and consider public recommendations for Medicare payment for dental service in other potentially analogous clinical scenarios.

Improving Access to Colon Cancer Screening
CMS is finalizing its proposal to expand the regulatory definition of colorectal screening tests to include a follow-on screening colonoscopy after a Medicare covered non-invasive stool-based CRC test returns a positive result; this means that cost sharing would be waived for most Medicare beneficiaries for both the initial stool-based test and the follow-on colonoscopy. Additionally, the agency is finalizing its proposal to reduce the minimum age payment and coverage limitation from 50 to 45 years for certain colorectal cancer screening tests, in line with the recommendation from the United States Preventive Services Task Force.

Vial Refund Policy
CMS is finalizing its proposal to implement Section 90004 of the Infrastructure Investment and Jobs Act, which requires 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 charges for the drug during a given calendar quarter. CMS is finalizing requirements for the use of the JW modifier, for reporting discarded amounts of drugs, and the JZ modifier, for attesting there were no discarded amounts. Providers will be required to report the JW modifier beginning January 1, 2023, and the JZ modifier no later than July 1, 2023 in all outpatient settings.

Telehealth Services
CMS is implementing the telehealth provisions in the Consolidated Appropriations Act of 2022, which extend certain flexibilities in place during the COVID-19 Public Health Emergency for 151 days after the PHE ends, allowing telehealth services to be furnished in any geographic area and any originating site setting, and allowing certain services to be furnished via audio-only telecommunications systems.

Clinical Laboratory Fee Schedule
CMS is finalizing certain conforming changes in accordance with the Protecting Medicare and American Farmers from Sequester Cuts Act, namely, that payment may not be reduced by more than 0% as compared to the amount established for CY 2021, and for CYs 2023 through 2025, payment may not be reduced by more than 15% as compared to the amount established for the preceding year.

CY 2023 Updates to the Quality Payment Program
MIPS Value Pathways
CMS is finalizing 5 new MVPs and revising the 7 previously finalized MVPs. The 5 newly finalized MVPs available to report beginning with the 2023 performance year are: Advancing Cancer Care, Optimal Care for Kidney Health, Optimal Care for Patients with Episodic Neurological Conditions, Supportive Care for Neurodegenerative Conditions, and Promoting Wellness. Subgroup reporting will be voluntary for the CY2023, 2024, and 2025 performance period/ 2025, 2026, and 2027 MIPS payment years; multispecialty groups that choose to report through an MVP will be required to participate as subgroups beginning with the CY 2026 performance period/ 2028 MIPS payment year.

APM Policies
CMS is finalizing its proposal to permanently establish the 8% Minimum Generally Applicable Nominal Risk standard for Advanced APMs, which is currently set to expire in 2024.

CY 2023 Hospital Outpatient Prospective Payment System

340B Drug Discount Program

For CY 2023, in light of the Supreme Court’s decision in American Hospital Association v. Becerra, CMS is finalizing a general payment rate of ASP plus 6% for drugs and biologicals acquired through the 340B Program. As required by statue, CMS is implementing a –3.09% reduction to the payment rates for non-drug services to achieve budget neutrality for the 340B drug payment rate change for CY 2023. CMS will address the remedy for 340B drug payments from 2018-2022 in future rulemaking prior to the CY 2024 OPPS/ASC proposed rule. CMS also notes that claims for 340B-acquired drugs paid after the district court’s September 28, 2022 ruling are paid at the default rate (generally ASP plus 6%).

To view the CMS fact sheet on the PFS final rule, CLICK HERE.

To view the CMS fact sheet on the QPP final rule, CLICK HERE.

To view the PFS/ QPP final rule in its entirety, CLICK HERE.

To view the CMS factsheet on the HOPPS final rule, CLICK HERE.

To view the HOPPS final rule in its entirety, CLICK HERE.