What You Need to Know about CMS’s 2023 Proposed Medicare Physician Payment Rule

On July 7, the Centers for Medicare & Medicaid Services (CMS) released the 2023 version of its annual regulation proposing new payment policies and quality programs for Medicare physicians and other providers. The heavily anticipated rule is a whopping 2,066 pages long and includes numerous provisions that will impact physician groups next year. 

Given the length and complexity of the rule, it requires a detailed reading and analysis to fully understand the impacts to any individual physician group or healthcare organization. However, for those who have better things to do this summer than read 2,000-plus pages of CMS rules, here is my quick guide for What You Need to Know about CMS’s 2023 Proposed Medicare Physician Payment Rule:

• 2023 Medicare fee-for-service payment rates. The rule proposes a 2023 Physician Fee Schedule (PFS) conversion factor of $33.08, a decrease of $1.53 (4.4%) from the 2022 PFS conversion factor of $34.61. This decrease largely reflects the expiration of the 3% payment increase for 2022 that was included in a December 2021 law to mitigate a cut that was scheduled to take effect on January 1, 2022. As a result of the Evaluation and Management (E/M) relative value unit decreases that were included in the 2021 E/M documentation and payment system overhaul, absent an act of Congress, every year the Medicare conversion factor will face this roughly 4% payment cut. 2023 Medicare payment rates could also be negatively impacted by sequestration issues and will be adjusted according to 2021 performance in the Merit-based Incentive Payment System (MIPS).
• Medicare telehealth services policy changes. Medicare’s current relaxed regulatory requirements and enhanced reimbursement policies for telehealth services are tied to HHS’s COVID-19 public health emergency (PHE) declaration, which must be extended every 90 days and was recently extended from July 15 until October 13. Reflecting legislation that passed in March 2022, this rule proposes to extend several of these key policies until 151 days (five months) following the conclusion of the PHE. During the five-month period, patient geographic and physical location waivers will still apply, Federally Qualified Health Centers (FQHCs) will still be able to offer telehealth services, audio-only (telephone) visits will still be covered, and payment parity between in-person and virtual visits will continue.
• Merit-based Incentive Payment System (MIPS). In 2023, the MIPS performance category weights will be: 30% for quality; 30% for cost; 15% for improvement activities; and 25% for promoting interoperability. While CMS did not propose major revisions to the reporting requirements for any of the four categories, it did propose impactful revisions for promoting interoperability. CMS also proposed to maintain the 2023 scoring threshold at the same level as 2022: 75 points. As prescribed by the MACRA law, CMS will not apply an exceptional performance threshold in 2023 (or distribute the corresponding $500 million in incentive payments) because 2022 is the final year it applies. Under MIPS, eligible clinicians will receive positive or negative payment adjustments of up to 9% in 2025 based on 2023 performance.
• MIPS Value Pathways (MVPs). In 2018, CMS first proposed the MVPs participation framework as a way to align the reporting of existing MIPS measures across the quality, cost, and improvement activities categories for different specialties or conditions. Last year, CMS established 2023 as the start of the transition to MVPs. In this year’s rule, CMS maintained that timeline while also proposing 5 new MVPs and revising the 7 previously established MVPs. CMS also proposed details regarding MVP “subgroups,” which multispecialty groups will eventually be required to form in order to report MVPs. Last year, CMS floated the idea of completing the transition from traditional MIPS to mandatory MVPs before the 2028 performance period. In this rule, CMS confirmed that it has yet to finalize a date to complete this transition. In effect, this means that MVPs will remain voluntary until at least 2029.
• Medicare Shared Savings ACO Program (MSSP). The rule proposes several key changes to Medicare’s largest Accountable Care Organization (ACO) program, the MSSP. Among the changes, starting with the 2024 performance year, CMS would: provide advance shared savings payments to smaller ACOs that serve underserved populations; allow ACOs to have more time before taking on downside risk; and use a revised financial cost benchmark methodology. Starting with the 2023 performance year, CMS would: change the “all-or-nothing” approach to determining an ACO’s eligibility for shared savings based on quality performance and implement a health equity bonus adjustment of up to 10 bonus points to an ACO’s quality performance category score. Several of these proposed changes were made in direct response to industry feedback and to encourage continued program participation. As such, most industry stakeholders applauded the proposals.
• 2023 transition to the 2015 Edition Cures Update certified EHR*. In its 2021 PFS final rule, CMS established that after December 31, 2022, healthcare providers participating in federal programs that require the use of certified EHR technology would be required to use only certified technology updated to the 2015 Edition Cures Update for an EHR reporting or performance period in calendar year 2023. For the past several years, some industry stakeholders have lobbied CMS to delay this transition beyond 2023. In this rule, CMS again confirmed that it would not be making any changes to this timeline. CMS also reconfirmed that many healthcare providers (including those in MIPS) would only need to demonstrate the use of a Cures Update certified EHR for the final 90-days of 2023 as opposed to the full year.

It is important to note that this is a proposed rule open for public comment, not a final rule. Similar to last year, physician trade and advocacy associations are already lobbying Congress to reverse the proposed reduction in the conversion factor. Other policies, including the proposed ACO changes, have been welcomed by most physician groups. 

Following the close of the public comment period, CMS will issue a final rule in October or November ahead of a January 1, 2023, implementation date for the rule’s policies. 

*In March 2022, NextGen Healthcare announced that its NextGen® Enterprise EHR achieved the Office of the National Coordinator for Health Information Technology (ONC-Health IT) 2015 Edition Cures Update Health IT certification via Drummond Group LLC, an Authorized Certification Body (ACB). This made NextGen Healthcare the first EHR developer to certify a complete EHR solution to the 2015 Edition Cures Update criteria. To learn more about NextGen Healthcare Enterprise EHR’s 2015 Edition Cures Update certification, please see here.