Impact of CMS Final Rule on Hospital Operating Payment Rates

Are you feeling confident about the new CMS Medicare Physician Fee Schedule? This lengthy document highlights several key provisions your healthcare revenue cycle team should be aware of to remain in compliance. Here are some key points you’ll want to keep in mind.

In November 2022, the Centers for Medicare and Medicaid Services (CMS) published the  2023 Medicare Physician Fee Schedule (MPFS) final rule, increasing hospital operating payment rates — among other provisions. Overall, the rule is aimed at advancing health equity and improving access to care in rural communities. Here’s an overview of the final rule and its implications for revenue cycle management going forward.

Overview: Medicare Physician Fee Schedule final rule

The MPFS final rule, which went into effect in January 2023, includes a reduction to the fee schedule conversion factor. The MPFS provides a list of the fees Medicare uses to reimburse physicians, ambulance services, laboratory services, and more.
The changes to the conversion factor resulted in an increase of 4.3% in hospital operating payment rates, due primarily to increasing hospital worker compensation rates. Despite this being the largest increase in 25 years, the American Hospital Association calls it “insufficient given the cost pressures hospitals face from labor, supplies, equipment, drugs and other expenses.”

Additional provisions of the final rule

Some of the key provisions offered in the 2023 MPFS include:

  • Policies for Rural Emergency Hospitals (REH) to ensure access to high-quality health services for people with Medicare in rural or underserved areas.
  • Guidelines for evaluation and management of split or shared visits, including which professional should bill for a shared visit by defining the “substantive portion” of the service as more than half of the total time. 
  • Expanded payments for additional telehealth services, at least through the end of the pandemic.
  • Payment for certain behavioral health services conducted in a patient’s home via communications technology.
  • Annual updates to the payment amount for preventive vaccine administration services based on the increase in the Medicare Economic Index. 
  • Pricing for methadone used to help opium addiction.
  • Statements encouraging hospitals to implement practices that reduce maternal morbidity and mortality.

You can read the entire CMS final rule here.

Ramifications for revenue cycle management

In addition to increased healthcare compensation rates, there are new codes and coding guidance that billers and coders will need to learn and use. Here are a few to become familiar with:

  • New descriptor times (where relevant)
  • New guidelines for levels of medical decision making
  • Choice of medical decision making or time to select code level, where applicable
  • Requirement for a medically appropriate history and exam to determine code level.

Is your organization current with the new provisions and coding changes? There are numerous details to remember and changes to learn, but with the help of a trusted, experienced RCM company like TruBridge, you can ensure you remain compliant and able to optimize your revenue cycle with ease. To learn how we can help you and your team, visit or give us a call at 877-543-3635.