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CMS Issues CY 2024 Medicare Physician Fee Schedule Proposed Rule

Virgil Dickson
July 18, 2023

On July 13, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2024 Medicare Physician Fee Schedule (PFS) proposed rule. The proposed rule includes changes to payment policies, quality reporting, and value-based payment programs.

CMS proposes to adjust the conversion factor, which is used to determine physician payment rates for specific services, to $32.75 — a decrease of $1.14 compared with CY 2023. The PFS proposed rule includes other provisions important to essential hospitals related to expanding access to telehealth services for Medicare beneficiaries and targeting social determinants of health (SDOH).


Medicare reimburses practitioners under the PFS for a list of telehealth services updated through annual rulemaking. CMS proposes to add permanent payment for SDOH risk assessments and to reimburse temporarily for health and well-being coaching services. The agency also proposes to change its process for evaluating requests from the public to add services to the telehealth services list.

CMS outlines its plans to implement telehealth provisions of the Consolidated Appropriations Act, 2023. This includes proposals to extend certain flexible telehealth policies through Dec. 31, 2024, including:

  • Expanding the types of originating sites where a beneficiary can be when receiving a telehealth service, including the beneficiary’s home. CMS proposes that practitioners providing services to beneficiaries in their homes receive payment at the higher non-facility PFS rate beginning in CY 2024.
  • Including qualified physical therapists, occupational therapists, and speech-language pathologists as eligible telehealth practitioners. This will allow these practitioners to furnish and bill for telehealth services during this time.
  • Delaying requirements for an in-person visit prior to initiating mental health telehealth visits.
  • Allowing coverage and payment of certain telehealth services furnished via an audio-only communications system, including allowing opioid use disorder treatment programs to bill for periodic assessments provided through audio-only telecommunications technology, where permitted by other applicable laws and regulations.

During the COVID-19 public health emergency (PHE), CMS changed the definition of direct supervision to allow virtual presence through two-way, audio/video technology instead of requiring physical presence, which facilitated the provision of telehealth services by clinicians. CMS is concerned that immediately reverting to the pre-PHE definition of direct supervision after 2023 could present a barrier to access for many services.

Therefore, CMS proposes to continue allowing direct supervision through virtual presence via real-time audio/video technology through the end of 2024. CMS also seeks comments on potentially extending virtual direct supervision beyond 2024, including for which types of services or staff virtual supervision would be appropriate and potential program integrity concerns.

CMS also proposes to allow teaching physicians to oversee services provided by residents using audio/video real-time communications technology at all residency training locations through the end of 2024.

Appropriate Use Criteria for Advanced Diagnostic Imaging

CMS proposes to halt implementation of the Appropriate Use Criteria (AUC) for Advanced Diagnostic Imaging Program and to rescind the AUC program regulations. Pursuant to the Protecting Access to Medicare Act, CMS previously finalized a policy requiring practitioners to use a clinical decision support mechanism to consult AUC when ordering applicable imaging services. CMS postponed the penalty phase of the AUC program multiple times, allowing practitioners to operate under an educational and operations testing period since 2020. Due to challenges with successfully implementing the program’s requirements, CMS proposes to pause the program indefinitely while it reevaluates its feasibility.

Quality Programs

MIPS Value Pathways (MVPs)

CMS proposes five new MVPs for the 2024 performance period, focusing on the following topics:

  • Focusing on Women’s Health.
  • Quality Care for the Treatment of Ear, Nose, and Throat Disorders.
  • Prevention and Treatment of Infectious Disorders Including Hepatitis C and HIV.
  • Quality Care in Mental Health and Substance Use Disorders.
  • Rehabilitative Support for Musculoskeletal Care.

CMS proposes to revise previously finalized MVPs, including consolidating the Promoting Wellness and Optimizing Chronic Disease Management MVPs into a single primary care MVP.

Traditional MIPS Program

For the quality performance category, CMS proposes adding 14 new quality measures for the 2024 performance period. This includes one composite measure and seven high priority measures.

CMS also proposes to:

  • Make no changes to the 75 percent data completeness threshold for 2024.
  • Require Spanish translation of the Consumer Assessment of Healthcare Providers and Systems for MIPS survey.
  • Modify how ICD-10 coding updates are assessed.
  • Calculate cost improvement scoring at the category level instead of measure level.

Medicare Shared Savings Program (MSSP)

CMS proposes to expand the window for patient assignment in the MSSP, which would assign beneficiaries prospectively to an accountable care organization (ACO). This change could lead to more ACOs meeting the minimum size requirements, potentially resulting in larger assigned populations and lower minimum savings rates for ACOs under certain risk models.

In addition, CMS proposes:

  • Modifying quality performance scoring to account for social risk factors such as dual eligibility, disability, and residential area deprivation. This aims to assess ACO quality performance in a socially equitable way.
  • Eventually requiring ACOs to screen beneficiaries for SDOH needs and include SDOH data in their electronic health records. This would facilitate care coordination and linkage to services.
  • Requiring health equity initiatives in the MSSP, such as data collection, SDOH screening tools, closed-loop referrals to community services, and partnerships with community organizations, which would allow ACOs to use MSSP incentive payments for these initiatives.

Advance Investment Payments

CMS proposes to refine the advance investment payment (AIP) policies for ACOs entering agreement periods on Jan. 1, 2024, to allow ACOs receiving AIPs to advance to two-sided risk models sooner and recoup AIPs from shared savings payments instead of directly from the ACO.

Medicare Clinical Quality Measures

CMS proposes to establish Medicare Clinical Quality Measures (CQMs) as a new collection type for reporting quality measures under the Alternative Payment Model Performance Pathway. This would help ACOs transition to digital measurement by initially focusing on their Medicare patients.

Align with Merit-based Incentive Payment System Certified Electronic Health Record Technology Requirements

CMS proposes to align Shared Savings Program Certified Electronic Health Record Technology (CEHRT) requirements with MIPS by removing the current CEHRT thresholds and requiring all participating clinicians to report the MIPS Promoting Interoperability performance category measures.

Health Equity Adjustment

CMS proposes to make more beneficiaries eligible for the health equity adjustment by calculating dual eligibility for Medicare and Medicaid, as well as enrollment in the Medicare Part D Low Income Subsidy, based on partial year enrollment.

Risk Adjustment

CMS proposes applying the same CMS Hierarchical Condition Category risk adjustment model used for the performance year to all benchmark years starting in 2024.

Regional Adjustment

CMS proposes changes to further mitigate the effect of negative regional adjustments to benchmark updates.

Beneficiary Assignment

CMS proposes adding a new step to the assignment methodology to better account for beneficiaries receiving primary care from nurse practitioners, physician assistants, and clinical nurse specialists.

Social Determinants of Health

CMS proposes several policies related to SDOH.

Medicare Annual Wellness Visits

The Annual Wellness Visit (AWV) under Medicare Part B is a comprehensive preventive visit for eligible beneficiaries. CMS proposes to add to the AWV an optional SDOH Risk Assessment, which aims to enhance patient-centered care, identify social risks earlier, and respond to resulting health needs proactively through care planning and coordination.

The proposed SDOH Risk Assessment involves administering a standardized, evidence-based, and culturally and linguistically appropriate SDOH risk assessment tool that considers the patient’s educational, developmental, and health literacy level. It would be separately payable with no cost sharing for beneficiaries when performed as part of the AWV.

This proposal builds on the CMS initiative to establish a stand-alone payment code for SDOH Risk Assessment in conjunction with an evaluation and management (E/M) visit.

New HCPCS G-code for SDOH Data Collection

CMS proposes to establish a new HCPCS code, GXXX5, that would allow practitioners to bill Medicare for administering a standardized SDOH screening tool during certain E/M visits.

The full proposed descriptor for GXXX5 is: “Administration of a standardized, evidence-based Social Determinants of Health Risk Assessment tool, 5-15 minutes.” CMS proposes that GXXX5 would be billable when at least five minutes is spent administering a structured, evidence-based SDOH screening tool as part of an E/M visit.

CMS believes this code will improve consistent screening and documentation of SDOH data in the medical record. This data then can inform patient diagnoses, care planning, and coordination.

CMS identified seven SDOH domains that screening tools can address:

  1. Economic stability.
  2. Education
  3. Health care access and quality.
  4. Neighborhood and environment.
  5. Food
  6. Community and social context.
  7. Social relationships.

The code would be reportable only with E/M visits and could not be billed if the screening time is already included in the time and work of the E/M code. CMS proposes a work RVU of 0.33 for GXXX5 based on a direct crosswalk to CPT code 96160 (Administration of patient-focused health risk assessment instrument), which has the same time values.

Behavioral Health Services

CMS proposes policies related to behavioral health services, including:

  • Providing Medicare Part B coverage and payment for services of marriage and family therapists (MFTs) and mental health counselors (MHCs) and allowing addiction counselors to enroll in Medicare as MHCs.
  • Adding payment codes for psychotherapy for crisis services provided in an applicable site of service.
  • Allowing MFTs, MHCs, clinical social workers, and clinical psychologists to bill for certain health behavior assessment and intervention services.
  • Increasing payment for timed behavioral health services over a four-year transition period.

Payment for Vaccine Administration

CMS previously finalized a policy to provide additional payment for the administration of the COVID-19 vaccine in a beneficiary’s home. CMS now proposes to provide additional payment for the administration of three other preventive vaccines that are covered by Part B — the pneumococcal, influenza, and hepatitis B vaccines — when they are provided in the beneficiary’s home.

Request for Information

CMS included a request for information (RFI) in the CY 2024 PFS proposed rule on potential strategies to improve SDOH data collection. This RFI stems from longstanding concerns that the current methodology for determining practice expense relative value units under the PFS does not adequately account for SDOH factors.

Contact Director of Policy Rob Nelb, MPH, at or 202.585.0127 with questions.

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