The Centers for Medicare and Medicaid Services (CMS) updates the Physician Fee Schedule (PFS) every year and publishes the same the preceding November. Keeping with the routine, the Physician Fee Schedule final rules have been updated and published for 2023 last week.
There was a lot of speculation about the conversion factor getting reduced compared to last year, and the CMS finally reached a consensus and published the final list of changes to look at.
If you are a medical practitioner, a medical billing and coding company, an RCM service provider, or anyone in the healthcare industry, you need to be paying close attention to the PFS and the changes.
The Physician Fee Schedule final rules were released on November 1, 2022, and these rules will be applicable from January 1, 2023.
The PFS lets payers (insurance providers and patients) know the right payment to be made for physicians’ services, depending on the type of service and the place of service. Therefore, a physician’s final payment, for the same service rendered could change over the years, thanks to changes in the PFS.
One of the important components of PFS is the conversion factor. This is calculated as a multiplier of the Relative Value Unit (RVU) of the actual fees paid for a service or a procedure. Logically, the higher the conversion factor, the higher would be the physician’s part of payment.
PFS was created, so there was some basis on which physicians charge their patients and payers. The changes are based on budget-neutralized adjustments, so that, at the end of the year, Medicare and Medicaid services don’t end up with humungous spending.
According to Physician Fee Schedule final rules, the conversion factor has gone down in 2023 when compared to 2022. The conversion rate for next year will be $33.06. It is to be noted that this figure was $34.61 in 2022.
Apart from reducing the conversion factor, the fee schedule has also changed to accommodate extensive behavioral health services.
The rules will now accommodate a wide range of behavioral health service providers who offer their services under the general guidance of a medical practitioner.
After 2023, clinical psychologists and licensed clinical social workers are all eligible to get paid under PFS. Such experts will also be able to create monthly payment schedules and offer long-term treatment solutions for chronic cases.
The Physician Fee Schedule will also include dental coverage when opted for before organ transplants and other major services. Before this, dental services like tooth extraction were only included as a part of cancer care.
For cardiologists, CMS estimates that the rule will decrease payments by 1% compared with 2022 because of updates to work, practice expense, and malpractice relative value units (RVUs). This estimate is based on the entire cardiology profession and can vary widely depending on the mix of services provided in a practice.
Finally, another important addition to these rules is the inclusion of mobile opioid treatments. Such opioid treatments can also be offered out of vans or mobile units. The only condition would be that they adhere to Drug Enforcement Administration and Substance Abuse and Mental Health Services Administration guidance.
The Physician Fee Schedule 2023 has also made considerable changes to Accountable Care Organizations (ACOs). ACO quality scores are to be adjusted, and this will be based on health equity performances.
Certain ACOs, depending on their revenues and performance, may be allowed to stay on one side of the finance chart, which may benefit them in the long run. Some ACOs may also be eligible for advance payments based on health equity performances. The changes made to the Shared Savings Program seem to be something this group is looking forward to for 2023.
Multiple physician groups have started voicing out their disappointment at the 2023 Physician Fee Schedule final rules. According to such groups, this conversion factor cut will add more financial pressure on the physicians, pit medical practitioners against one another, and intensify competition.
These groups also mention that this cut was going to be on top of the 4% PAYGO sequestration and may lead to a further decline of revenues in group practices where the federal spending is beyond a stipulated value.
The physicians and healthcare providers are worried that this change may lead to financial instability and prevent physicians from offering the best treatment to people in need. We will need to wait and see how this affects the financial scenario in reality.
There are a lot of positives in the Physician Fee Schedule final rules of 2023 for patients.
The major point to discuss here is its impact on behavioral health. A considerable portion of the population hesitates to take help from behavioral health experts because the services may not be covered, and the out-of-pocket charges may be quite expensive.
However, many of the physical problems these days are manifested from behavioral issues, and unless the latter is addressed, the former will not be. The 2023 PFS rules may help provide holistic healthcare service to patients, as it includes behavioral health, mental health, and physical health solutions.
Pain care has always been a sensitive term to tread on when it comes to insurance inclusions. Increased payment rates for opioid-based treatments will now help improve access to pain care.
CMS will also cover extended telehealth service, even after the Public Health Emergency has ended and this is something patients can definitely look forward to.
How has your RCM service provider planned to handle the new Physician Fee Schedule rules? There are a lot of small changes to the regulations that may, in total, change the way your billers and coders need to think and act.
Most of the payers will not have updated the new fee schedule in their systems until March 2023. They will pay in the existing 2022 rates and later will process a lot of recoupments/refunds. This may be the right time to get the help of professionals who can take over the challenging task of wading through the new Physician Fee Schedule and ensuring the changes don’t affect your revenues generated or your services rendered.
Quintessence Business Solutions and Services could be your perfect partner to take over the entire RCM process flow. Our tools are designed to target the new changes precisely and tweak your system, so you can continue billing the payers without major hiccups.
We understand that backend challenges can affect the quality of treatment offered to patients at the end of the day. The Physician Fee Schedule changes can cause a dip in your revenues if you don’t work on it right and make the necessary changes. Get in touch with us to know how best to handle the new change and move forward with minimal distractions.
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