On November 1, 2022, the Centers for Medicare & Medicaid Services (CMS) released a final rule for the Calendar Year 2023 Medicare Physician Fee Schedule (PFS), which includes updates and policy changes related to Medicare payments under the (PFS) and Quality Payment Program (QPP), effective on or after January 1, 2023.  

Finalized policies include a significant reduction to the PFS Conversion Factor, a reduction to the Anesthesia Conversion Factor and updates to the Merit-based Incentive payment System (MIPS).

• PFS Conversion Factor is $33.06 for CY 2023, reduced from $34.61 in CY 2022, a reduction of 4.47%. This decrease reflects the expiration of the temporary 3% statutory payment increase; a 0.00% conversion factor update; and a budget-neutrality adjustment. 
• The 2023 Anesthesia Conversion Factor is $20.6097, reduced from $21.56 in CY 2022, a decrease of -4.47%.
• The split/shared E/M visits policy permitting clinicians to bill split/shared visits based on one of three components (history, exam, or medical decision making) or time has been extended until 2024;
• Implementation of provisions of the Consolidated Appropriations Act, 2022 that extend certain Medicare telehealth flexibilities for an additional 151 days after the end of the COVID-19 public health emergency (PHE), allowing telehealth services to be furnished in the patient’s home and allowing certain services to be provided via audio-only telecommunications.
• The MIPS performance threshold remains the same at 75 points, Eligible Providers receiving less than 75 points will incur a payment penalty on a linear sliding scale up to 9% with those scoring under 18.75 points will receive an automatic -9% adjustment.

In addition, physicians and other healthcare professionals are facing the recent reinstatement of a 2% sequestration cut plus a 4% PAYGO cut that is part of the American Rescue Plan.

Unless Congress takes action, all physician practices will face significant Medicare payments cuts next year. 

Additional information about the final rule is available in the PFS Fact Sheet and the QPP Fact Sheet.