CMS Final Rule Reduces Physician Reimbursement Again 

06 Nov, 2023 F.J. Thomas


Sarasota, FL ( – Despite strong complaints from the American Medical Association (AMA) about a 26 percent decrease in physician reimbursement from 2001 to 2023, it appears those complaints have fallen on deaf ears. 

On Nov. 2, Centers for Medicare & Medicaid Services (CMS) announced their final policy changes that include drastic reimbursement reductions for the coming year. 

During the pandemic, CMS waived the 2 percent sequestration reduction put into place originally in 2013. That 2 percent sequestration adjustment resumed after the pandemic, with full implementation in 2023. Under the CMS final rule just announced, physicians are set to take an additional 3.4 percent reduction next year, on top of the existing 2 percent decrease already in place. This reduction takes place at the same the Medicare Economic Index (MEI), which is partly based on physician operating costs, has seen the highest increase in history at 4.6 percent, previously at a 3.8 percent increase. 

Due to legislative requirements, overall payments under the current physician fee schedule must be reduced by 1.25 percent for next year. As means to accomplish that reduction, CMS has reduced the conversion factor from the current $33.89 down to $32.74. According to a history of Conversion Factors used in calculation of physician reimbursement, this represents the lowest rate since 1998.

One of the changes that CMS is making in the final rule is the use of add on code G2211 to be used for    evaluation and management codes. G2211 allows for an additional payment only in certain situations. CMS had previously considered the use of the add on code in 2021 as way to level out reimbursement. However, the impact was less than CMS had originally estimated and delayed the implementation until next year. 

Another change included in the final rule is that CMS is revising their definition of “substantive portion” of a split (or shared) visit so that it will be in line with Current Procedural Terminology (CPT) guidelines. “Substantive portion” will mean more than half of the total time, or more than half of the total medical decision making involved in seeing a patient. 

The same day as the CMS news release, the President of the AMA, Jesse M. Ehrenfeld, M.D., M.P.H., issued a formal statement.  Overall, Ehrenfeld believes the rule is a “recipe for financial instability” stating, “Physicians routinely have faced cuts in the last two decades. Yet, there is nothing routine about the past few years. Physicians have faced the COVID pandemic and subsequent burnout. They have seen the costs soar for running a medical practice, while Medicare payment updates have offered too little relief.

“There is widespread acknowledgement that access to care is being threatened. The declining revenues in the face of steep cost increases disproportionately affect small, independent, and rural physician practices, as well as those treating low-income or other historically minoritized or marginalized patient communities.”

In a somewhat ironic move, in the CMS Final Rule for facilities, ambulatory surgery centers (ASCs) will receive a 3.1 percent payment increase. The new rule will affect around 6,000 ASCs and around 3,500 hospitals. Additionally CMS has added 11 new procedures that can be performed at an ASC. 

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    About The Author

    • F.J. Thomas

      F.J. Thomas has worked in healthcare business for more than fifteen years in Tennessee. Her experience as a contract appeals analyst has given her an intimate grasp of the inner workings of both the provider and insurance world. Knowing first hand that the industry is constantly changing, she strives to find resources and information you can use.

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