The Centers for Medicare and Medicaid Services (CMS) released the 2024 final rule for the Medicare Physician Fee Schedule on November 2, 2023. The final rule will be implemented on January 1, 2024. Following are key highlights.

2024 Physician Conversion Factor

CMS finalized a 2024 conversion factor (CF) of $32.7442, a 3.37% reduction from the 2023 physician CF of $33.8872. This CF reduction is in contrast to the Medicare Economic Index (MEI), which will increase by 4.6%. The negative update is based on three factors: a statutory 0% update scheduled for the physician fee schedule PFS in 2024, a negative 2.18% budget neutrality adjustment, and a funding patch passed by Congress at the end of 2022. That bipartisan legislation partially mitigated the CF cut by providing a 2.5% increase for the 2023 CF, but only a 1.25% increase to offset part of the reduction to the CY 2024 CF. Separate from the PFS CF, legislation in 2023 also waived the Pay-As-You-Go Act (PAYGO) 4% reduction for two years (2023 and 2024). CMS estimates that almost 90% of the negative budget neutrality adjustment is due to the new add-on code for complexity, addressed below.

Add-On Code for Complexity

The final rule implements a new CPT add-on code for complexity, G2211, which was previously finalized, but delayed by Congress until 2024. The code can be reported with office and outpatient evaluation and management (E/M) codes to reflect care provided to highly complex patients. The goal of the code is to increase reimbursement for primary care specialties. CMS assumes that the add-on code will be appended to 38% of applicable claims initially, increasing to over 50% when fully adopted in a few years.

Specific Code Valuations

Total Disc Arthroplasty (CPT® codes 22857 and 22860)

In September 2021, the CPT Editorial Panel revised code 22857 Total disc arthroplasty (artificial disc), anterior approach, including discectomy to prepare interspace (other than for decompression); single interspace, lumbar and created Category I code 22860 to describe Total disc arthroplasty (artificial disc), anterior approach, including discectomy to prepare interspace (other than for decompression); second interspace, lumbar (List separately in addition to code for primary procedure) to replace Category III code 0163T, which described the same add on procedure.

CMS has finalized a work RVU of 6.88 for code 22860 along with a work of RVU of 27.13 for code 22857 and PE inputs as recommended by the RVS Update Committee (RUC).

Dorsal SI Fusion (CPT Code 27278)

CMS has finalized the RUC-recommended work RVU of 7.86 and the direct PE inputs for new code 27278 for dorsal SI fusion. Additionally, they note that the code would benefit from additional review at the RUC as a service with a new technology supply item, as well as a procedure with site of service issues. They indicate that they will review any new recommendations received in the future.

Vertebral Body Tethering

In the proposed rule, CMS proposed to accept the RUC-recommended work values and PE inputs for vertebral body tethering codes 22836-22838 and have finalized this recommendation in the final rule.

Potentially Misvalued Codes

In the proposed rule, CMS noted that CPT code 27279 (Arthrodesis, sacroiliac joint, percutaneous or minimally invasive (indirect visualization), with image guidance, includes obtaining bone graft when performed, and placement of transfixing device) was nominated as potentially misvalued due to the absence of separate direct PE inputs for this 90-day global code when performed in the non-facility setting. CMS indicated concerns about whether this procedure can be safely and effectively provided in the non-facility setting and requested comment. NASS commented that it shares CMS’ concerns that it is not safe to perform this procedure in a non-facility setting as it requires incision and collection of bone for grafting by drilling down through the ilium to the SI joint as well as placement of titanium implants across the sacroiliac joint.

The nominator of this code as potentially misvalued suggested that the procedure has a low risk profile similar to kyphoplasty (CPT codes 22513-22515), which is currently provided in the non-facility setting. NASS strongly disagreed with this comparison as SI joint arthrodesis is a more invasive and complex procedure than kyphoplasty.

In the final rule, CMS indicated that while they are not designating code 27279 as potentially misvalued for 2024, they encourage other parties including the RUC and third-party payors to review appropriate PE inputs for procedures that are evolving out of the inpatient setting and may be performed safely and efficaciously in outpatient settings.

Appropriate Use Criteria for Advanced Diagnostic Imaging Program

In the final rule, CMS finalizes a plan to permanently pause the Appropriate Use Criteria (AUC) for Advanced Diagnostic Imaging Program. Since its establishment under the 2014 Protecting Access to Medicare Act (PAMA), finalization and implementation of the AUC for Advanced Diagnostic Imaging program has been delayed. In the 2024 proposed rule, CMS proposed pausing the program’s implementation to reevaluate the program as the statutory implementation deadline has not been met and has finalized this proposal. Additionally, CMS noted that real-time claims-based reporting is an insurmountable hurdle preventing full implementation and optimization of the AUC program. Going forward, the expectation is that programs such as the Medicare Shared Savings Program (MSSP) will take a more global approach to improving quality of care, including advanced diagnostic imaging, rendering moot the need for the AUC program.