Urology Coding Alert

However, despite CMS’ rosy outlook on its CY 2023 proposals, the CF decrease is cause for concern, experts warn. Industry leaders are already bemoaning the suggested cuts and calling for congressional input.

“The main takeaway is a 4.42 percent overall decrease in the Medicare conversion factor because of a combination of an expiring 3 percent pay bump to mitigate the impact of evaluation and management (E/M) coding changes, a zero percent payment update under the Medicare Children’s Health Insurance Program (CHIP) and Reauthorization Act, and a statutorily required budget neutrality adjustment,” explains Holland & Knight LLP in the law firm’s H&K Health Dose newsletter.

Observe Proposed 2023 CF Cut

To fully understand what’s going on with the CY 2023 CF changes, you have to look at last year’s changes, which were a byproduct of COVID and congressional input.

First: As part of the CY 2022 final rule, CMS reduced the CF from $34.89 to $33.59. The combination of the mandated annual budget neutrality requirements, which included a $1.30 decrease to the CF, and the expiration of the 3.75 percent increase under the Consolidated Appropriations Act, 2021, left most Medicare providers distraught.

Next: Then last December, Congress pushed through, and President Biden signed into law the Protecting Medicare and American Farmers from Sequester Cuts Act. The legislation offered Medicare providers a break with a 3 percent increase to the 2022 CF since many were reeling from COVID fallout.

Now: CMS proposes to cut the CF by $1.53 for CY 2023, reducing the rate from $34.61 to $33.08, the MPFS proposed rule suggests. “This conversion factor accounts for the statutorily required update to the conversion factor for CY 2023 of 0 percent, the expiration of the 3 percent increase in PFS payments for CY 2022 as required by the Protecting Medicare and American Farmers From Sequester Cuts Act, and the statutorily required budget neutrality adjustment to account for changes in Relative Value Units,” CMS explains in a fact sheet on the proposals.

Understand How CF Impacts Medicare Pay

CMS uses a resource-based relative value scale (RBRVS) to determine how much practitioners are to be paid for the services they provide. In that capacity, the MPFS establishes different values for codes depending on the setting/site (facility or non-facility) in which the provider performs the service or procedure. For some services, the total relative value units (RVUs) for a given procedure are the same in a facility or a non-facility setting. In other situations, however, the two totals may differ.

How it works: The facility and non-facility total RVUs are the sum of three component RVUs:

• Physician work RVUs (to cover the cost of the provider’s work);
• Practice expense RVUs (to cover the cost of supplies, equipment, etc.); and
• Malpractice expense RVUs (to cover the cost of professional liability expenses).

Physician work RVUs and malpractice expense RVUs are the same, regardless of the setting (facility or non-facility). Practice expense RVUs may vary by site of service, which accounts for the difference in facility and non-facility RVU totals for a given code.

Medicare fees also vary geographically; thus, each component RVU is multiplied by its own geographic practice cost index (GPCI) for the payment locality in which the service is rendered before the components are summed and multiplied by the dollar conversion factor that translates RVUs into fees.

Non-facility calculations: Understanding how non-facility RVUs are calculated is important, too. To get that amount, add together the physician work RVUs, the non-facility practice expense RVUs, and the malpractice RVUs for the total non-facility RVUs for a given code.

Learn What Industry Insiders Think of the CF Cut

With the CF decrease expected to hit physicians hard in 2023, the AMA is already advocating for legislators to get involved.

“It is immediately apparent that the rule not only fails to account for inflation in practice costs and COVID-related challenges to practice sustainability, but also includes a significant and damaging across-the-board reduction in payment rates,” cautions AMA President Jack Resnek, Jr., MD, in a release on the proposed rule. “Such a move would create long-term financial instability in the Medicare physician payment system and threaten patient access to Medicare-participating physicians. We will be working with Congress to prevent this harmful outcome.”

AUA stance: The American Urological Association (AUA) agrees that the changes will be harmful to physician practices. “The AUA has joined the Clinical Labor Coalition’s statement to Congress calling attention to the proposed significant cuts in physician reimbursement and their disproportionate impact on community-based office settings providing specialty care, such as urology, in the 2023 Medicare Physician Fee Schedule (MPFS) Proposed Rule. The reimbursement cuts are further exacerbated by a 4.5% reduction in the Medicare conversion factor, which is the basis for calculating Medicare payments. The second year of CMS’ implementation of the clinical labor pricing update, which was finalized in the CY2022 MPFS rule, impacts reimbursement as well. These cuts will disrupt patient access to care, particularly in community-based settings where critical care is provided to underserved populations,” the AUA states in a Policy and Advocacy Brief on its website (https://community.auanet.org/blogs/policy-brief/2022/07/26/ aua-reviews-proposed-2023-fee-schedule-urges-congr).

Resource: Review the CY 2023 MPFS proposals at https://public-inspection.federalregister.gov/2022-14562.pdf.