The Centers for Medicare and Medicaid Services (CMS) released the 2024 Medicare Physician Fee Schedule Proposed Rule (MPFS) on July 13. The proposed rule details changes to Medicare physician and non-physician provider reimbursement including calculation of the conversion factor and CMS generated specialty level impact tables.
There is often a great deal of confusion around the impact tables and conversion factor changes, as CMS calculations are often complex and difficult to decipher. American College of Radiology® (ACR®) staff worked with ACR Commission on Economics member Richard Heller, MD, FACR, to clarify some of the specific issues the College has identified in the 2024 MPFS proposed rule. However, as stated above, the rule is not final until published as such, and impact numbers are subject to change. In addition, each individual practice will experience unique impacts depending on case mix and services offered.
In the 2024 MPFS proposed rule, there are three big issues impacting change in reimbursement. First, CMS is statutorily required to apply budget neutrality requirements within the MPFS, which means that any payment increase must be offset by a corresponding payment decrease. Most recently, radiologists and other specialists have been on the losing end of the budget neutrality application, as CMS has focused on increasing pay to primary care.
Unfortunately, the 2024 proposed MPFS rule is no different, due in part to proposed implementation of G2211, a CMS-generated complex care add-on code to be billed primarily with office and outpatient evaluation and management (E/M) codes. As a result of ACR-led coalition advocacy efforts, this code, initially proposed in 2019 for 2021 implementation, was paused by Congress for three years beginning in 2021. That pause will expire at the end of 2023, and CMS is proposing to move forward with implementation in 2024. In the proposed rule, CMS estimates that the implementation of G2211 is responsible for roughly 90% of the budget neutrality impact.
Secondly, since 2020, the ACR-led coalition has successfully lobbied Congress to add additional dollars to the conversion factor to blunt the impact of budget neutrality changes, including from the revaluation of outpatient E/M codes which was implemented in 2021. In December 2022, Congress passed the Consolidated Appropriations Act of 2023, which added an additional 2.5% to the MPFS conversion factor for 2023 and an additional 1.25% to the MFPS conversion factor for 2024. The difference between the 2023 conversion factor increase and the 2024 conversion factor increase is responsible for a -1.25% reduction to the conversion factor for 2024.
Lastly, changes in relative value units (RVUs), which are based on RVU updates relative to other specialties, are also factors in determining specialty level impacts. These changes happen every year and are based on recommendations by the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC). In the 2024 MPFS proposed rule, these changes are responsible for roughly 10% of the budget neutrality impact.
The proposed 2024 conversion factor is approximately 3.4% below the 2023 conversion factor: 2% of that reduction is based on budget neutrality changes, including the implementation of G2211 and RVU changes, and an additional 1.25% is based on the difference in between the 2023 congressional adjustment and the 2024 congressional adjustment.
In the proposed rule specialty level impact table, radiology is estimated to take a -3% reduction. This reduction is based on changes to the RVU calculations and changes relative to other specialties. The impact table does include changes that are related to budget neutrality but does not include changes to the conversion factor resulting from congressional action. Although they are reflected in the conversion factor calculation, neither the expiration of the 2023 2.5% conversion factor adjustment nor the additional 1.25% conversion factor adjustment for 2024 are included in the specialty level impact table.
For this reason, when determining the overall specialty level impact for radiology, the 3% (specialty level impact table) and 3.4% (difference between 2023 conversion factor and proposed 2024 conversion factor) cannot simply be added to presume radiology is facing a 6.4% reduction. Adding the percentages double counts the budget neutrality reduction that is already reflected in the specialty level impact table. The ACR estimates that without further congressional action, the reduction to diagnostic radiology will be approximately 4%, although as stated previously, the cut to any specific practice will vary based on types and volumes of codes billed.