CMS’s 2024 Final Rule Reduces Conversion Factor by 3.37%

The Centers for Medicare and Medicaid Services (“CMS”) recently issued the Final Rule announcing the 2024 policy changes for Medicare, including Part B issues and payments under the Physician Fee Schedule (“MPFS”), many of which take effect in January. According to the CMS Fact Sheet, “the calendar year (CY) 2024 PFS final rule is one of several final rules that reflect a broader Administration-wide strategy to create a more equitable health care system that results in better access to care, quality, affordability, and innovation.”

Under the rule, the amount CMS pays for physician services per relative value unit, i.e., the conversion factor (“CF”), will be reduced by 3.37% from $33.8872 in 2023 to $32.7442. The anesthesia CF will decrease by 3.27% from $21.1249 to $20.4349. These cuts continue CMS’s broad revamp to coding and payment policies that healthcare providers have deeply felt since 2020.

Under the Final Rule, CMS also implements evaluation and management (E/M) add-on code G2211. This code is reported in addition to a 99201-99215 E/M code when a patient with a chronic condition is seen in the office/outpatient setting. The add-on code provides additional compensation for the time and intensity involved in providing care to complex patients. It is intended for use by primary care physicians and cognitive specialists. The code has been assigned a work relative value unit (wRVU) of 0.33.

This change to the 2024 MPFS will likely have a significant impact on provider compensation and productivity benchmarks. At the organization level, the extent of the impact will be determined by various factors, including the blend of services provided, payer mix, and structure of reimbursement contracts.

BuckheadFMV offers consulting services to help healthcare organizations find answers to questions regarding fair market value and commercial reasonableness. To determine the impact of the 2024 MFPS changes, it will be important to:

1. Understand budget exposure to these changes at the physician and organizational levels.

2. Consider the new wRVUs while reviewing contracts, payment rates, and policies to ascertain any adjustments that may be required.

3. Identify potential areas of risk for fair market value and commercial reasonableness compliance.

Contact us with questions about fair market value physician compensation in light of the 2024 MPFS.