Physician Fee Schedule Policy Changes: Lookup Medicare PFS Proposed Rule
The Medicare physician fee schedule dictates how services rendered by healthcare providers are compensated under the Medicare program for their services.
Centers for Medicare and Medicaid regularly update the physician fee schedule to align with technological changes and concurrent transformations within the healthcare industry.
Some exciting transformations are awaiting the healthcare landscape in the upcoming year and at the forefront lies the 2024 Medicare physicians fee schedule proposed rule.
Similar to the CY 2023 physician fee schedule, the 2024 physician fee schedule proposed rule is aimed at fostering a more equitable healthcare system. Effective implementation of the proposed policy changes will elevate the level of patient care.
Let’s uncover the basics of PFS and what the physician fee schedule final rule 2023 addresses.
Understanding PFS Basics
The world of healthcare finance is filled with intricacies, and the physician fee schedule is one of its cornerstones that every provider must understand thoroughly.
Simply put, a physician fee schedule is defined as a list of fees assigned to different services and procedures healthcare professionals render to patients. These lists are used by insurance providers and Medicare to reimburse physicians and other healthcare providers.
Physicians provide services in various healthcare settings, including hospitals, physicians’ offices, hospices, outpatient dialysis facilities, and clinical laboratories. PFS ensures that the payment rates remain consistent across all healthcare settings.
On the other hand, some payers also use the MPFS (Medicare Physician Fee Schedule) as a reference for reimbursing doctors. The MPFS is an annual rule that specifically outlines and updates reimbursement rates for services doctors render to Medicare beneficiaries.
According to the medicare physician’s fee schedule, procedures are assigned relative value by factoring in relevant practice expenses, liability insurance, and the physician’s work. This value is then multiplied by a conversion factor to derive payment rates.
To account for any regional variations in the cost of operating a practice, further adjustment to the derived value can be made using GPCI (geographic practice code index).
For an accurate reflection of the costs associated with a physician’s work and the technical resources utilized to perform a procedure or service, the professional and technical components of a service can be segregated.
For instance, the professional component of a service indicates activities such as evaluation of a patient, diagnosis, etc, and this component is billed by the assigned physician.
On the other hand, the technical component of a service signifies the use of facilities and equipment to perform technical aspects of a service such as a laboratory test or imaging. Technical components are typically billed by suppliers such as dialysis facilities, radiology centers, and ambulatory surgical centers.
Role of PFS In Medical Billing
The physician fee schedule holds great significance in the world of medical and physician billing, influencing how procedures and services are translated into proper codes, billed by suppliers and practitioners, and reimbursed by payers.
PFS provides a standardized framework for medical services’ reimbursement, contributing to billing transparency. This transparency allows payers to assess the validity of billed charges and for practitioners to comprehend reimbursement rates across different healthcare settings and different types of services.
PFS Payment Rates
The physician fee schedule is typically updated annually, and specific payment rates in PFS can vary depending on various factors, including updates made by CMS, geographical location of practice, and the types of services rendered.
However, there is a standard formula used to determine payment for a service, which is:
Work RVU (relative value units) x Work GPCI (geographic price cost index) + PE (practice expense) RVU x PE GPCI + MP (malpractice) RVU x MP GPCI = Total RVU x CF (conversion factor) = Payment.
Providers can use the medicare physician fee schedule lookup tool to get further insights on billing, coding, and payment rates.
Medicare Physician Fee Schedule Proposed Rule 2024
Here is what you should know about the 2024 medicare physician fee schedule final rule.
- Compared to the conversion rate of $33.58 in the CMS physician fee schedule 2022 and $33.06 in the 2023 medicare physician fee schedule final rule, the final CY 2024 PFS conversion factor was reduced by 1.15% to $32.74.
- In the CY 2024 proposed physician fee schedule, the overall rates will be subject to a reduction of 1.25%.
- CMS has also finalized reimbursement for providers who train other caregivers to assist patients diagnosed with specific illnesses. Payments will be provided as a part of the patient’s individualized treatment plan.
- Effective January 1st, 2024, an additional payment for the new add=on HCPCS code G2211 will be introduced.
- CMS has also finalized the definition for the phrase “substantive portion” used specifically for split/shared E/M visits. The substantive portion now signifies a key element of medical decision-making and more than half of the total time the physician or non-physician practitioner spends performing the split/shared E/M visit.
- On a temporary basis, health and well-being coaching services are being added to the Medicare Telehealth Services list for CY 2024.
- The implementation of the Appropriate Use Criteria (AUC) program has been temporarily put on hold by CMS.
- The 2024 PFS final rule also implements notable changes to the Medicare Shared Savings Program (MSSP).
What is the difference between FFS and PFS?
FFS (fee-for-service) is more of a traditional payment model where providers are reimbursed for each service they render. On the other hand, PFS is a component of FFS in which payment rates are based on relative values.
What are the definitions for facility and non-facility for the physician fee schedule?
Facility and non-facility both refer to different payment settings. For instance, a non-facility rate is used for services rendered in non-facility settings like a physician’s office, and facility rates are used for services rendered in hospitals and other healthcare facilities.