LUGPA Policy Brief: 2024 Medicare Physician Fee Schedule Payment Cuts

Nov. 13, 2023 

The Centers for Medicare and Medicaid Services (CMS) recently finalized their final rule enacting a conversion factor payment cut to the physician provider payment schedule, effective January 1, 2024. The reduction in conversion factor aligns closely with the initial proposal made during the summer, and it will significantly impact payments to providers across the United States for services performed for Medicare patients.

Medicare Payment Cuts

Released by CMS on November 2nd, the 2024 Medicare Physician Fee Schedule final rule includes a 3.34 percent decrease in the fee schedule's conversion factor, which is part of the fee schedule calculation. This decrease in the conversion factor means physicians will receive lower reimbursements for certain Medicare Services.

Medicare will extend several telehealth provisions for physicians in a move almost universally supported by stakeholders, including patient groups, providers, and bipartisan legislators. These provisions will enable healthcare providers to continue offering virtual care services to patients, which is critical given the ongoing COVID-19 pandemic.

Moreover, Medicare will comply with the recent Supreme Court decision invalidating the payment reductions that CMS promulgated for 340B-acquired drugs between 2018-2022 by through lump-sum payments to affected hospitals. The lump-sum payments are equal to the difference between what the hospital would've been paid and what they were actually paid during the relevant years. Due to the requirement for budget neutrality, CMS also finalized payment cuts, which will be phased-in over 16 years, to procedures performed in the outpatient hospital setting to offset the lump-sum payments to 340B hospitals.

LUGPA and a growing coalition of provider groups are lobbying Congress to revise the current physician payment system to address this scenario of “robbing Peter to pay Paul.”

HCPCS Code G2211

To complete robbing Peter to pay Paul: beginning January 1, 2024, CMS finalized the implementation of a separate add-on payment for Healthcare Common Procedure Coding System (HCPCS) code G2211. This add-on code will better recognize the resource costs associated with evaluation and management visits for certain types of care.  As explained by CMS, the G2211 ‘cognitive code’ intends to acknowledge the work involved when clinicians are the continuing focal point for all needed services or are part of ongoing care related to a patient's single, serious, or complex condition. LUGPA practices have the opportunity to utilize this code because of the urologic specialty’s continued treatment of ongoing serious and or complex conditions.

In the rule, CMS provided greater detail on how clinicians can utilize the code, as requested by commenters, and has indicated their intent to provide educational materials to guide the proper utilization of this new code.  Its usage is expected to enhance complex patient care coordination and management. The G2211 code may NOT be billed in conjunction with a visit in which a modifier 25 is used to bill for a separate and identifiable service at the same time as the E/M service. LUGPA will develop further guidance for practices related to the G2211 and recommends that each practice discuss this code with its billing teams.

The Medicare payment cuts to the PFS represent a stark challenge to independent practices, amplified by the COVID rebound, workforce shortages, and staggering inflation in staffing and input costs.  LUGPA and its member urologists monitor these developments closely and collaborate with policymakers to address concerns, secure fair reimbursement, and ensure the sustainability of their practices, the US healthcare system, and patient access to care.