2024 Medicare Physician Fee Schedule Final Rule

AADA Advocacy Results in 2024 Conversion Factor Increase

As a result of continued advocacy by the American Academy of Dermatology Association, President Biden signed the Consolidated Appropriations Act, 2024 on March 9, which included a 2.93% update to the 2024 Medicate Physician Fee Schedule (MPFS) Conversion Factor for dates of service March 9 through Dec. 31, 2024.

CMS implemented the new legislation by adjusting the 2023 conversion factor of $33.07 by 2.93% and the budget neutrality adjustment for a 2024 conversion factor of $33.2875. This is a prospective change, so claims submitted for dates of service between March 9, 2024 and Dec. 31, 2024 will include the new conversion factor of $33.2875. Claims submitted for dates of service from Jan. 1, 2024 through March 8, 2024 will still be subject to the $32.7442 conversion factor.

CMS finalizes payment changes for 2024

On Nov. 2, 2023, CMS released the 2024 Medicare Physician Fee Schedule (MPFS) Final Rule with significant changes to fee-for-service payments and MIPS. CMS revised the 2024 Medicare conversion factor to $32.7442, reflecting a 3.37% decrease from 2023. CMS estimates a 1.0% reduction in dermatology payments. However, it failed to include in the specialty estimate the adjustments made by the Consolidated Appropriations Act, 2023, which provided a 2.5% positive increase to the conversion factor for calendar year 2023 and only a 1.25% increase for 2024. Consequently, dermatologists may face a larger cut than CMS projects. The actual impact may vary based on individual practice mix. To better understand the impact on your practice, access our impact tables of updated dermatology codes and Relative Value Units (RVUs) for nearly 400 dermatology codes.

Advocacy wins

As a result of the AADA’s advocacy, the final rule included several significant wins. First the MIPS performance threshold for 2024 will be maintained at 75 points, rather than the proposed 82 points. This is a crucial win, because 50% of physicians were projected to face penalties under the higher threshold. Maintaining the performance threshold at 75 points reduces the number of physicians predicted to incur penalties to 22%.

Additionally, AADA’s advocacy led CMS to continue to allow physicians to use their practice location instead of their home address when providing telehealth services from home. As a reminder, a COVID-19 emergency waiver permitted physicians to provide telehealth services from their homes without disclosing their home addresses on their Medicare enrollment, while still billing from their existing enrolled locations, but this was scheduled to expire on Jan. 1, 2024. The AADA was concerned with the public display of home addresses because it jeopardizes the privacy and safety of physicians and healthcare workers, especially as it relates to their personal lives and families.

In another win for the AADA, CMS did not finalize an increase to the data completeness threshold for the 2027 performance year/2029 payment year.

Other finalized MPFS policies

Evaluation and Management (E/M) add-on code G2211

Unfortunately, CMS finalized the E/M complexity add-on code G2211. According to CMS estimates, the G2211 code is responsible for about 90% of the budget neutrality reduction to the conversion factor. Also, dermatologists often cannot use the G2211 code because CMS does not allow billing it alongside modifier 25. The AADA and 40 other medical specialties urged Congress to act before the code goes into effect on Jan. 1, 2024. Without congressional intervention, many physician specialties and non-physician clinicians will face cuts in reimbursement.

Alleviating the cuts for 2024 and securing a long-term solution to the Medicare payment crisis is the AADA’s top advocacy priority. Urge Congress to back H.R. 2474 for inflation-based increases in 2024 and beyond by contacting your representatives now. 

Medicare Economic Index and AMA Physician Practice Information Survey

CMS finalized its policy, as proposed, to continue to delay implementation of the 2017-based Medicare Economic Index (MEI) cost weights for RVUs due to the pending completion of the AMA’s Physician Practice Information (PPI) Survey. As a reminder, the AMA is conducting the PPI Survey to collect data on physician practice expenses. The goal of the survey is to better understand the costs faced by today’s physician practices to support physician payment. The survey was last conducted in 2007 and 2008 and is reflective of 2006 data. The AMA contracted with Mathematica, an independent research company, to conduct the study. The AMA says that it plans to share survey data with CMS in 2025 and policy changes would be reflected in the 2026 MPFS rulemaking process.

Telemedicine

CMS finalized many of its proposed policies. First, the agency will implement provisions from the Consolidated Appropriations Act, 2023, including:

• Temporary expansion of the scope of telehealth originating sites for services furnished via telehealth to include any site in the United States where the beneficiary is located at the time of the telehealth service, including an individual’s home;

• Expansion of the definition of telehealth practitioners to include qualified occupational therapists, qualified physical therapists, qualified speech-language pathologists, and qualified audiologists;

• Continued payment for telehealth services furnished by Rural Health Centers (RHC) and Federal Qualified Health (FQHC) Centers using the methodology established for those telehealth services during the public health emergency;

• Delaying the requirement for an in-person visit with the physician or practitioner within 6 months prior to initiating mental health telehealth services, and again at subsequent intervals as the Secretary determines appropriate, as well as similar requirements for RHCs and FQHCs;

• Continued coverage and payment of telehealth services included on the Medicare Telehealth Services List (as of March 15, 2020) until Dec. 31, 2024.

Additionally, starting in 2024, telehealth services provided to beneficiaries in their homes will be compensated at the non-facility rate, aligning with the telehealth-related flexibilities extended through the Consolidated Appropriations Act, 2023.

CMS finalized maintaining the definition of direct supervision to allow the presence and immediate availability of the supervising practitioner through real-time audio and video interactive telecommunications until Dec. 31, 2024. This extension aims to align the policy timeframe with other PHE-related telehealth policies extended under the Consolidated Appropriations Act, 2023.

MIPS measures

Against the AADA’s urging, CMS finalized removing the topped-out MIPS Measure 138: Melanoma Coordination of Care. Additionally, CMS finalized removing the MIPS Measure 402: Tobacco Use and Help with Quitting Among Adolescents because it believes the measure is duplicative to measure Q226: Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention.

For more information, please review:

• The CMS 2024 MPFS fact sheet

• The 2024 QPP fact sheet (PDF) for information on MIPS

• The full 2024 MPFS Final Rule (PDF)

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