Medicare payment reduction for 2023 smaller than originally announced

Physicians will take a pay cut from Medicare in 2023, but not as deep a cut as originally announced. The Centers for Medicare & Medicaid Services had announced last fall that the conversion factor (the amount Medicare pays per relative value unit under its physician fee schedule) would fall from $34.6062 in 2022 to $33.0607 in 2023 — a reduction of 4.5%. But the federal funding package President Biden signed Dec. 29 increased the 2023 conversion factor to $33.8872 — a reduction of only 2% compared to last year.

The budget bill also allows physicians to continue offering telehealth to Medicare beneficiaries — including by phone — through the end of 2024, and invests in mental health through primary care. The full legislative text can be found here. For more Medicare payment changes in 2023, see this FPM article.

— Kent Moore, AAFP Senior Strategist for Physician Payment

Posted on Jan. 10, 2023