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2023 Changes to the Physician Fee Schedule … Starting Now!

Happy 2023 to all my bloggies out there!! Over the New Year’s celebration, thousands gathered in a wet NYC to watch the ball drop. There was a shooting in Mobile, AL, killing one person and injuring 9. About 40 people died in Buffalo over the holidays due to severe cold weather. And a man named Jay Withey rescued 24 people in Buffalo during the blizzard. My friend got COVID and gave it to her mom. I took my 98-year-old grandma out for sushi and played pickleball with my mom and daughter.

Why the word vomit?

Well, it’s a New Year and a new start. I am choosing to have a positive attitude for 2023. Yes, you get audited. Yes, the government blows. Sometimes you do not get rainbows and applesauce every day. But the hard times give you strength. It’s the challenging times that teach you to appreciate the good. I have decided to think about life as school. You may not want to go, but it’s required. Attendance is required.

On the syllabus for today, should you choose to participate, is the 2023 Physicians Fee Schedule (“PFS”). On November 01, 2022, the Centers for Medicare & Medicaid Services (“CMS”) issued a final rule that includes updates and policy changes for Medicare payments under the PFS, and other Medicare Part B issues, effective on or after January 1, 2023. Well, guess what, folks? It is January 2, 2023.

For most services furnished in a physician’s office, Medicare makes payment to physicians and other professionals at a single rate based on the full range of resources involved in furnishing the service. In contrast, PFS rates paid to physicians and other billing practitioners in facility settings, such as a hospital outpatient department (“HOPD”) or an ambulatory surgical center (“ASC”), reflect only the portion of the resources typically incurred by the practitioner in the course of furnishing the service.

Conversion factor

There was a 3% supplemental increase to PFS payments in 2022. That increase expires in 2023. The final 2023 PFS conversion factor is $33.06, a decrease of $1.55 to 2022 PFS conversion factor of $34.61.

What is a conversion factor (“CF”)? It is a convoluted equation that sets Medicare rates that differs depending on whether the health care service is rendered within a facility or out. CF is set by statute.

Evaluation and Management (“E/M”) Visits

For 2023, there are 25 codes that are going away. Here are the codes that are being deleted.

  • Hospital observation services codes 99217—99220, 99224–99226
  • Consultation codes 99241, 99251
  • Nursing facility service 99318
  • Domiciliary, rest home (eg, boarding home), or custodial care services, 99324—99328, 99334-99337, 99339, 99340
  • Home or resident services code 99343
  • Prolonged services codes 99354—99357

There is also a new Section entitled “initial and subsequent services,” which applies to hospital inpatient, observation care and nursing facility codes. It applies to both new and established patient visits. The AMA says,

“For the purpose of distinguishing between initial or subsequent visits, professional services are those face-to-face services rendered by physicians and other qualified health care professionals who may report evaluation and management services. An initial service is when the patient has not received any professional services from the physician or other qualified health care professional or another physician or other qualified health care professional of the exact same specialty and subspecialty who belongs to the same group practice, during the inpatient, observation, or nursing facility admission and stay.”

Admission and Discharge on the Same Day

Lastly, at least for this blog, codes 99234-99236, which are used for hospital inpatient or observation care and include the admission and discharge on the same day. The patient must be in the facility for greater than 8 hours. See the below table for reference:

These are just a few of the PFS 2023 changes. Stay tuned for new Medicare and Medicaid news on this blog by me, Knicole Emanuel.