Important Coding, and Medicare Payment Updates for 2023

medicare coding guidelines March 29, 2023

The American Academy of Family Physicians (AAFP) has initiated an educational process for members concerning the 2023 coding changes to E/M services in hospitals, nursing homes, and other settings, which took effect last January 1, 2023. Moreover, this topic will likely be covered in future updates and resources, so keep an eye out for them.

Refer to this PDF file for an overview of these coding changes.

Medicare Changes for 2023 

The most significant updates to Medicare for 2023 will be codes, payments, and policies. You can check them out below:

Access the Medicare Payment Systems Updates for 2023

The 2023 Inpatient Evaluation and Management (E/M) Changes

In 2023, the American Medical Association (AMA) revised its inpatient e/m codes to align with its office and outpatient coding guidelines. Meanwhile, the documents of patient history and physician exam will no longer affect the level of service. Choose the level of service based solely on the medical decision-making process or the physician’s time spent on the encounter. These changes apply to hospitals, nursing homes, and patients’ residences.

The following codes have been revised in hospital settings:

  • Initial hospital inpatient or observation care (CPT codes 99221 – 99223) (note the codes for initial observation care [note that CPT codes 99224 -99226] have been deleted);
  • Subsequent hospital inpatient or observation care (CPT codes 99221 – 99233) (note CPT codes 99218 – 99220 have been deleted);
  • hospital inpatient or observation care services (including admission and discharge, CPT codes 99234 – 99236);
  • Hospital inpatient discharge services (CPT codes 99238 and 99239) (note CPT 99217 has been deleted); and
  • Emergency department services (CPT codes 99281 – 99285).

Regarding CPT coding, “nursing facility” includes skilled nursing facilities, treatment centers for mental health, and facilities for immediate care. Updates to these settings include:

  • initial nursing facility care (CPT 99304 – 99306);
  • Subsequent nursing facility care (CPT 99307 – 99310) (note that code 99218 has been deleted this year);
  • nursing facility discharge services (CPT 99315 and 99316);
  • Domiciliary, rest home or custodial care services, new patient (CPT 99341 – 99345) (note that codes 99324 – 99324 have been deleted); and
  • Domiciliary, rest home, or custodial care services, established patient (CPT 99347 – 99350) (note that codes 99334 – 99347 have been deleted).

Overall, the 2021 Evaluation and Management guidelines now apply to outpatients (CPT 99241 – 99245) and inpatients (CPT 99251 – 99255) consultations. It is noteworthy that Medicare has not provided reimbursement for consultations in recent years; however, some other payers do.

Note: All these codes are copyright by the American Medical Association.

The Payment Updates for Medicare in 2023

The Centers for Medicare & Medicaid Services (CMS) has declared that beginning January 1, separate coding and payment for chronic pain management services will be implemented, with nonphysician practitioners, such as physician assistants and nurse practitioners, eligible to provide this care. Accordingly, new HCPCS codes have been created to report chronic pain management and treatment, which includes holistic chronic pain care services. Among them are also assessing and monitoring, administering a tool or scale for measuring pain that is validated, developing, implementing, revising, and/or maintaining a treatment plan that focuses on the strengths, goals, clinical needs, and desired outcomes of the person.

Moreover, the CMS has dramatically expanded the scope of services available via telehealth during the COVID-19 public health emergency, with several of these services remaining available either temporarily or permanently through 2023. Such services may include:

  • Emotional/behavioral assessment
  • Psychological, and 
  • Neuropsychological testing
  • Evaluation services 
  • Audio-only services

The use of telehealth services for chronic care management and prolonged care will remain permanent for some time to come.

The Changes in Medicare Alternative Payment Program 2023

As a family physician, it is essential to be aware of the upcoming changes to Medicare’s Quality Payment Program (QPP) and Medicare Shared Savings Program (MSSP) for the 2023 period. In QPP’s Merit-based Incentive Payment System (MIPS), the MIPS Value Pathways will be a new reporting option. Twelve MVPs are available for clinicians to report, two of which will focus on primary care: promoting wellness and optimizing chronic disease management. The 2023 MIPS performance threshold will remain at 75 points, with eligible clinicians receiving payment increases or reductions of up to 9% on their Medicare Part B claims. Thus, this year won’t have an exceptional performance threshold.

These are the changes to the Medicare Shared Savings Program (MSSP):

  • New program entrants without performance-based risk experience may obtain Advance Investment Payments.
  • There will be a one-time payment of $250,000 followed by eight quarterly payments. In this case, the number of beneficiaries assigned to the Accountable Care Organization (ACO) serves as the basis.
  • During the term of the current agreement, CMS will recoup the payments from shared savings earned by the ACO.
  • The CMS will allow ACOs with no experience in performance-based risk to remain in the Basic track level A throughout the five-year agreement period. All participants will have the option of taking the Enhanced track.

The CMS is working to modernize the Medicare payment system by connecting payment updates to physician activities that promote improved quality of care, decrease healthcare costs, and participate in alternative payment models. With that, you can refer to AMA’s resources and tools to help physicians better respond to the changes in the physician fee schedule and Quality Payment Program (QPP). 

The 2023 Medicare Physician Fee Schedule Final Rule

The Centers for Medicare & Medicaid Services (CMS) recently issued the finalized 2023 Medicare Physician Fee Schedule (MPFS) on November 1. They outline these various significant changes 

  • Since the supplemental 3% increase in fee schedule payments had expired, the conversion factor decreased from $34.6062 to $33.0607.
  • There were changes in telehealth flexibilities similar to those in the Consolidated Appropriations Act of 2022. As part of this, specific telehealth flexibilities will continue for 151 days after the COVID-19 Public Health Emergency ends, which is currently scheduled to end on January 11, 2023. However, there may be further extensions.
  • The CMS made several updates to coding, work RVUs, practice expense RVUs, and the Quality Payment Program and Medicare Shared Savings Program.

Read more on Medicare updates.

Keep Up With the Latest

Overall, the Medicare updates released recently will have a significant effect on patients and healthcare providers. Some critical updates providers should be aware of are the reduction in the fee schedule conversion factor and the changes to telehealth flexibilities. 

Additionally, the modifications to the Quality Payment Program and the Medicare Shared Savings Program require providers to stay knowledgeable and adapt to changing healthcare conditions. Thus, staying on top of Medicare updates and regulations is key to ensuring financial sustainability while providing quality care to patients.

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