Medicare’s CY 2023 Physician Fee Schedule Telehealth Update: What You Need to Know

The Medicare telehealth update for the physician fee schedule during 2023 is set to bring significant changes to the healthcare industry. Medicare telehealth services have become increasingly popular in recent years, and the COVID-19 pandemic has only accelerated the adoption of telehealth services. The Centers for Medicare and Medicaid Services (CMS) recognizes the importance of telehealth services and has made several changes to the physician fee schedule to reflect this.

This past November 2022, the Centers for Medicare & Medicaid Services (CMS) issued their calendar year 2023 Medicare Physician Fee Schedule Final Rule, which took effect January 1, 2023. CMS’s Final Rule included important updates regarding billing and reimbursement for services provided via telehealth and provided practitioners with some guidance on navigating the transition away from the flexibilities afforded during the COVID-19 Public Health Emergency (PHE).

CMS’s Physician Fee Schedule Changes

One of the significant changes to the physician fee schedule for 2023 is the expansion of telehealth services. CMS has added more than 60 services to the Medicare telehealth list, including several that were previously restricted to in-person visits. This expansion allows healthcare providers to offer a broader range of services via telehealth, providing patients with more options for remote care.

Additionally, CMS has made changes to the reimbursement rates for telehealth services. In previous years, telehealth services were reimbursed at lower rates than in-person visits. However, CMS has now increased the reimbursement rates for many telehealth services to be on par with in-person visits. This change is a significant step forward for telehealth adoption, as it provides more financial incentives for healthcare providers to offer telehealth services.

Furthermore, CMS has introduced a new category of telehealth services, called “store-and-forward” services. These services allow healthcare providers to share patient data and images with specialists for review and consultation. Store-and-forward services can improve patient care by providing timely access to specialists, without the need for patients to travel to different locations for appointments.

CMS has also made changes to the telehealth-originating site requirements. The originating site is the location where the patient is receiving telehealth services, and CMS previously limited the eligible originating sites. However, CMS has now expanded the eligible originating sites to include a patient’s home, which was previously restricted to only a few specific scenarios. This change allows patients to receive telehealth services from the comfort of their own homes, which can improve access to care, particularly for those with mobility issues or living in rural areas.

Finally, CMS has made changes to the audio-only telehealth services. In previous years, audio-only services were only reimbursed for certain circumstances, such as when patients did not have access to video-capable devices or when they lived in areas with limited internet access. However, CMS has now expanded the use of audio-only services to include certain behavioral health and counseling services. This change can improve access to care for patients who may not have access to video-capable devices or who prefer audio-only communication.

Below are the details of changes Medicare has made to the Telehealth Services.

Services to be added to the Medicare Telehealth Services List

In reviewing new telehealth services which are included on the list of Medicare-covered codes, CMS assigns each requested addition to one of three categories.

• Category 1 services are those like professional consultations, office visits, and office psychiatry services already on the approved telehealth list.
• Category 2 services, which are not like services already on the approved telehealth list, are considered by CMS to determine whether there is an indication of clinical benefit to patients when the service is provided via telehealth.
• Category 3, created during the PHE to evaluate codes added on a temporary basis that would help continued access to medically necessary services during the pandemic, but for which there is not enough evidence to assess the services for permanent addition under Category 1 or Category 2 criteria.

In the Final Rule, CMS made the following changes with respect to the approved Medicare Telehealth Services List:

Additions/Approvals:

• Adds, on a Category 1 basis, certain prolonged observation codes (HCPCS codes G0316-G0318), determined to be sufficiently like already-approved prolonged service codes and to certain psychiatric diagnosis codes.
• Adds new chronic pain management (CPM) services (HCPCS codes G3002 and G3003) to the list, also on a Category 1 basis, with the condition that an in-person visit of at least 30 minutes is furnished the first time HCPCS code G3002 is billed.
• Approves, on a Category 3 basis, several services including certain therapy, neurotransmitter pulse generator, emotional/behavior assessment, and psychological or neuropsychological testing and evaluation codes.
• CMS explains it has not received sufficient evidence to support the Category 2 addition of specific therapy codes (CPT codes 97537, 97763, 90901, and 98960-98962) because they involve direct observation of and/or physical contact with beneficiaries but believes that approving these codes on a Category 3 basis through the end of calendar year 2023 will allow time to gather additional information to potentially support their permanent addition.

Declines:

• Declines to add GI tract imaging, continuous glucose monitoring and certain neurotransmitter pulse generator/transmitter services to the Medicare Telehealth Services List on a Category 3 basis.
• Declines to add telephone E/M visit codes to the Medicare Telehealth Services List on a Category 3 basis.
• NOTE: CMS interprets the special payment rules for telehealth under the Social Security Act to require that, for a service to be reimbursable under the Medicare Physician Fee Schedule when rendered remotely, it must be “analogous” to and “essentially a substitute for” in-person services. Although telephone E/M services were approved for payment during the PHE on a temporary basis, CMS reiterates in the Final Rule that audio-only services are generally not analogous to in-person services and therefore will not be separately covered on the Medicare Telehealth Services List after the 151-day extension period following the PHE (and will revert to “bundled” status). CMS will continue to cover audio-only communications for mental health services under certain circumstances.

Clarifications:

• Clarifies that in the event the 151-day period after the PHE ends on a date that is later than December 31, 2023, services added on a Category 3 basis would remain on the Medicare Telehealth Services List until the end of such 151-day period, even if later than December 31, 2023.

Aligning Reimbursement with Federal Budget Legislation

The Consolidated Appropriations Act (CAA) codified the extension, for 151 days following the end of the PHE, of certain flexibilities applied to telehealth reimbursement during the PHE. CMS confirms its intention to implement these changes until 152 days following the end of the PHE, which include the following:

• Allowing telehealth to be furnished in any geographic area and from any originating site in the U.S. where the beneficiary is located at the time of the telehealth service, including the individual’s home.
• Providing that no payment of an originating site facility fee may be made to any “new” approved originating sites during the PHE.
• Delaying the requirement for an in-person visit with a physician or other qualified practitioner within six months prior to mental health services furnished by telehealth.
• NOTE:  In response to some concerns about the administrative burdens of adjusting to meet the in-person visit requirement amidst the uncertainty of the end date of the PHE, as well as the potential impact on patients with complex mental health conditions, CMS stated that it does not interpret the statute as applying this in-person visit requirement for beneficiaries who began receiving mental health services via telehealth during the PHE or in the 151 days following the end of the PHE. Instead, the requirement for an in-person visit within six months prior to the initiation of mental health services via telehealth will apply to beneficiaries who begin receiving services after the 151-day period ends.
• Expanding the definition of eligible telehealth practitioners to include qualified occupational therapists, physical therapists, speech-language pathologists, and audiologists.
• Continuing payment for Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) providing telehealth services and delaying the in-person visit requirements for mental health visits furnished by RHCs and FQHCs until 152 days after the end of the PHE.

Use of Modifiers for Medical Telehealth Services Following the End of the PHE

At the beginning of the PHE, CMS instructed practitioners to use an in-person place of service (POS) code (i.e., the code that would have been used had the service been provided in-person) and created an interim CPT telehealth modifier (modifier “95”) to be used for the duration of the PHE. CMS also maintained the facility payment rate for services billed using POS code “02.”

To allow for payment stability in a post-PHE period, CMS instructs providers in the Final Rule to continue, through the latter of the end of CY 2023 or the end of the calendar year in which the PHE ends, to bill telehealth claims with modifier “95” and the place of service indicator that would be used for an in-person visit.

CMS also states that beginning January 1, 2023, CPT modifier “93” must be used for eligible mental health services provided using audio-only technology. All providers must also append the Medicare modifier “FQ” for allowable audio-only Medicare telehealth services. Providers may choose one where both “FQ” and “93” modifiers are appropriate and accurate.

Direct Supervision

In March 2020, CMS waived certain requirements to permit “direct supervision” during the PHE to include virtual presence using real-time audio/video technology. In the Final Rule, CMS states it expects virtual direct supervision will be sufficient through the end of 2023 but that it will not continue to permit virtual direct supervision outside the calendar year in which the PHE ends. While those concerned with this change expressed support for allowing virtual direct supervision outside the circumstances of the PHE, CMS concluded that it needs more time to gather data and evidence before deciding whether to allow virtual direct supervision permanently.

Remote Therapy Monitoring

The Final Rule also includes changes affecting billing and payment for remote therapeutic monitoring (RTM).

Following its establishment of a new set of codes providing reimbursement for RTM in the calendar year 2022 Medicare Physician Fee Schedule, CMS heard from many stakeholders expressing concern about the need to increase beneficiary access to RTM and reduce the burden on providers created by the requirement for direct supervision of personnel performing associated clinical labor tasks. CMS also cites confusion among providers about the role of nonphysician practitioners in these services.

In response, for CY 2023, CMS proposed the creation of new G-codes to allow certain RTM functions to be provided by nonphysician practitioners, and to value clinical labor activities that may be furnished by auxiliary personnel under “general” supervision. However, in the Final Rule, CMS declines to finalize these codes, primarily citing continued confusion among providers about the coding and payment structure for RTM. Instead, CMS preserves its current payment policy for RTM with modifications; importantly, CMS clarifies that RTM services may be furnished under general supervision. Although CMS indicates that it will consider future rulemaking code revisions for RTM, including codes that may require fewer than 16 days of data collection for RTM devices, the 16-day requirement remains in effect for codes 98975, 98976, and 98977 for CY 2023.

Final Thoughts on CMS’s Telehealth Update

In conclusion, the Medicare telehealth update for the physician fee schedule during 2023 brings significant changes to the healthcare industry. The expansion of telehealth services, increased reimbursement rates, and expanded originating site requirements can improve access to care and provide patients with more options for remote care. Additionally, the introduction of store-and-forward services and expanded use of audio-only services can further enhance patient care. These changes reflect the increasing importance of telehealth services in the healthcare industry and can help improve patient outcomes while reducing costs.

Author: Daniel Quance, Account Manager, Corazon, Inc.