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End of Year Federal Budget Bill for 2023 Contains Many Provisions That Will Affect Providers

Here's what you need to know for the new year.

January 2023

By Brian Herdman, Director

The U.S. Congress’ new tradition of last-minute spending bills before the end of the calendar year puts many in healthcare at ease. Most of the Medicare and Medicaid related provisions are a benefit for providers, though some may have expected more than what the Consolidated Appropriations Act of 2023 ultimately contained when it was signed before Christmas.

  • Scheduled PAYGO cuts that would have reduced Medicare payments by 4% are averted until 2025. Providers will still need to endure the effects of sequestration, but at least Medicare revenues will not be further cut.
  • After a few years of last-minute increases to the Medicare Physician Fee Schedule to make up for the budget neutrality decrease due to higher RVUs for office Evaluation and Management services, Congress limited the “fix” for physician payments for 2023 and 2024. As a result, physician reimbursement will decrease about 2.1% in 2023 (compared to 2022) and further decrease about 1.25% in 2024 relative to 2023.
  • State Medicaid plans are now required to begin the pandemic-delayed eligibility redeterminations by April 1, 2023.
  • Telehealth provisions have been formalized through the end of 2024, previously it had only been 151 days beyond the end of the PHE. Provisions in the Omnibus Bill formalize the definition of telehealth to include audio-only services. CMS will also be required to study the effect of telehealth on outcomes and access via medical record review.
  • Mental health services will see more flexibilities, such as the inclusion of marriage and family therapists for mental health counseling and the addition of psychiatric residents in future years. Expanding definitions of partial hospitalization will aide rural health centers and FQHCs. CMS will also be required to propose an update to the Inpatient Psychiatric Prospective Payment System.
  • Miscellaneous extensions to Low Volume and Medicare Dependent hospital status, Acute Hospital at Home waiver, and other services are extended into future years.

For further information please reach out to Brian Herdman at [email protected] or 609-918-0990.

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