The Centers for Medicare and Medicaid Services (CMS) uses the Medicare Physician Fee Schedule (MPFS) to reimburse physician services. The MPFS is funded by Part B and is composed of resource costs associated with physician work, practice expense and professional liability insurance.
Under the MPFS, each of these three elements is assigned a Relative Value Unit (RVU) for each Current Procedural Terminology (CPT®) code. These RVUs are then adjusted based on the Geographical Practice Cost Index associated with various geographic areas for different medical costs and wage differentials. The conversion factor is the national dollar amount that is multiplied by the total geographically adjusted RVU to determine the Medicare-allowed payment amount for a particular physician service.
Despite a year-long effort by the ACR and the house of organized medicine, it appears Congress will not address looming Medicare conversion factor cuts before the end of this calendar year. As such, the CMS-finalized -3.37% conversion factor reduction will likely go into effect beginning January 1, 2024. We will continue to work with the entire provider community to pressure Congress to mitigate these planned cuts and expect the House and Senate will address this issue when the Congress debates the next government-wide funding Continuing Resolution (CR) that expires on January 19, 2024. We anticipate that once Congress finally votes on this payment issue, claims will be adjusted retroactive to January 1, 2024. Please stay tuned to updates on this highly fluid Congressional situation.