2023 Medicare Physician Fee Schedule Final Rule

The conversion factor (CF) is the multiplier Medicare assigns to determine the Medicare allowed dollar amount for each of the services Medicare reimburses for under the Physician Fee Schedule. The conversion factor is adjusted yearly, to maintain budget neutrality within the Fee for Service system.

CMS finalized a conversion factor of $33.06, representing a decrease of $1.55 from CY2022 in the MPFS final rule. This was largely due to the expiration of supplemental funds added to the fee schedule last year by Congress. AOTA actively advocated with Congress to provide some additional relief to offset the impact of the conversion factor to Medicare payments for 2023.

In early January, following passage of the Consolidated Appropriations Act of 2023, CMS announced an updated conversion factor for CY 2023 of $33.8872, reducing the finalized cut to therapy payments to 2% instead of the anticipated 4.42%.

CMS confirmed continuation of the 15% payment differential for occupational therapy services provided in whole or in part by an occupational therapy assistant (OTA) in this final rule. AOTA continues to strongly advocate against this policy and is actively working with members of Congress to enact legislation that would help mitigate the negative impact to occupational therapy practices. AOTA and a coalition of health care provider groups have worked to ensure passage of the Stabilizing Medicare Access to Rehabilitation and Therapy Act, or SMART Act (H.R. 5536), which proposes changes to supervision or rural area exemptions to lessen the impact of the policy.

The KX modifier is utilized to identify occupational therapy services that have gone over the yearly therapy threshold for physical therapy (PT), occupational therapy (OT), and speech-language pathology (SLP) services, but continuation of skilled intervention is medically necessary.

• For 2023, the KX modifier threshold has been increased by 3.8%, to $2,230 for PT/SLP services combined, and $2,230 for OT services.

This threshold is not a therapy cap, but rather just a point at which the KX modifier must be appended to the claim, indicating that medical records support the ongoing medical necessity for continued skilled intervention.

In addition to the therapy threshold for the KX modifier, CMS also utilizes a threshold for identifying claims that may be reviewed to ensure that documentation supports the continuation of services beyond the therapy threshold, and to confirm that the KX modifier has been appropriately applied to the claim.

• The targeted review threshold for 2023 continues at $3,000.

When OT services (or PT and SLP services combined) reach or exceed $3,000 for the year, those claims may be selected for audit by CMS' contractor, depending on a set of factors.

CMS updated the list of telehealth therapy codes that would be included on a Category 3 temporary basis through the end of 2023. While AOTA advocated to have therapy codes included on a permanent basis, CMS indicated that there was not enough evidence available yet to support inclusion of therapy codes on a Category 1 permanent basis at this time. Inclusion of therapy codes on the Category 3 list through the end of 2023 allows more time for data on patient outcomes to be gathered in support of permanent inclusion in a future rulemaking year.

In addition to the therapy codes already identified for use through the end of 2023, a few therapy codes were scheduled to be removed from the telehealth list at the end of the public health emergency (PHE).

• CMS finalized their proposal to add the following additional therapy CPT codes, commonly used by therapy practitioners, to the Medicare Telehealth Services List on a Category 3 basis through the end of CY 2023:
  • 90901, Biofeedback training by any modality
  • 97150, Group therapy
  • 97530, Therapeutic activities
  • 97537, Community work re-integration training
  • 97542, Wheelchair management
  • 97763, Orthotic/prosthetic management and training

These codes will be added to other OT codes on the Medicare Telehealth Services List for use through 2023 by telehealth providers. Despite the addition of these therapy codes, occupational therapy practitioners are only telehealth providers as part of the PHE flexibility. While AOTA advocacy enabled an extension of OT practitioner access to telehealth service provision for up to 151 days following the end of the PHE, occupational therapy practitioners will no longer be able to bill for telehealth services following the expiration of that extension period.

AOTA is working tirelessly with Congress in support of the Expanded Telehealth Access Act, which would make telehealth a permanent part of OT services under Medicare; as well as continuing to work diligently with CMS to increase the list of available telehealth services available on a permanent basis should OT practitioners become approved telehealth providers outside of the PHE.

As part of the proposed rule, CMS announced plans to add new codes for remote therapeutic monitoring (RTM) services, to separate physician and non-physician providers from other qualified health care professionals. AOTA argued that the RTM codes are still very new; replacing these codes at this time would create delays in access to services, possible gaps in care, and undue practitioner confusion and burden. We are pleased that CMS acknowledged these concerns and announced in their final rule that they would maintain the current RTM codes for CY2023.

• For CY2023, RTM codes will continue to be captured under CPT codes 98980 and 98981.

CMS also noted in this final rule that any RTM service may be furnished under our general supervision requirement. AOTA is seeking additional clarification from CMS regarding which practitioners can provide RTM services under general supervision.

CMS finalized new HCPCS codes for chronic pain management and treatment services (CPM) for CY 2023. AOTA asked for clarification from CMS on which types of practitioners could utilize these new HCPCs codes, advocating that OT practitioners have the prerequisite knowledge and skills to provide chronic pain management and treatment. CMS identified in this final rule that practitioners must be able to provide all services listed in the definition of these new codes in order to bill, including the ability to prescribe any necessary pain medications that might benefit the patient. Thus, OT practitioners will be unable to directly bill these new HCPC codes for chronic pain care management services.

While OT practitioners will not be able to utilize these new codes directly, CMS did highlight the value of physician coordination with OT practitioners, specifically identifying occupational therapy as a service that physicians should coordinate with when managing chronic pain in their patients. AOTA will continue to seek opportunities to further OT’s role in managing both chronic and acute pain in the future.

Accountable Care Organizations (ACOs) are groups of physicians, hospitals, and other health care providers who come together voluntarily to give coordinated high-quality care to their Medicare patients with the goal of ensuring patients get the right care at the right time, with decreased medical errors and duplication. In this final rule, CMS addressed the use of advance investment payments (AIPs) to address care to underserved beneficiaries with ACOs. CMS specifically focused on increasing organizational capacity to identify and address SDOH and connect individuals with culturally and linguistically tailored accessible health care services, supports, and information. CMS provided clarification on types of spending allowable for these investment payments, including using funding to increase staffing to address social determinants of health through actions such as:

• Developing or securing transportation services
• Housing-related services to address housing insecurity or homelessness
• Home or environmental modifications to support a healthy lifestyle
• Services to support personal safety
• Services to reduce social isolation
• Services to help patients cope with or address financial strain or poverty
• Developing patient caregiver supports.

AOTA has advocated over the years for inclusion of occupational therapy within the Shared Savings Program, but to date the program has primarily focused on physician and hospital groups. CMS’ recent focus on social determinants of health, however, creates potential new opportunities for occupational therapy involvement in the future. AOTA is conducting analysis of potential ACO opportunities for OT and will share more information when available.

CMS finalized several proposed updates to the Merit-based Incentive Payment System (MIPS) in the CY2023 MPFS final rule. Among the finalized policies, CMS re-affirmed their plan to shift to MIPS Value Pathways (MVPs) in an upcoming MIPS performance year; added 3 new quality measures to the OT measure set which focuses on screening and assessing social drivers of health, urinary incontinence, and rheumatoid arthritis; revised several existing quality measures to make occupational therapy evaluation visits applicable encounters; and confirmed continued reweighting of the cost and interoperability categories for OT practitioners for performance year 2023.

AOTA is working on a more in-depth article on the updates to the MIPS program noted in the CY2023 MPFS final rule; be on the lookout for more information in the coming weeks.