So, what is the Medicare conversion factor?

Join us July 20th for "Optimizing Value-Based Care Contracts" Register Here

The Conversion Factor or CF is a national dollar multiplier used to “convert” the geographically adjusted Relative Value Unit or RVU to determine the Medicare-allowed payment amount for a particular physician service.

So basically, the Conversion Factor released in the Physician Fee Schedule provides guidance on whether payments for physician services will go up or down.

On January 5, 2023, the Centers for Medicare & Medicaid Services (CMS) announced an updated CY 2023 physician conversion factor (CF) of $33.8872.

This change reflects a 2.5% positive adjustment from the initial CY 2023 physician CF of $33.0607 announced in the CY 2023 Medicare Physician Fee Schedule (PFS) Final Rule. That initial physician CF represented a 4.47% cut from the CY 2022 CF of $34.6062, whereas the updated physician CF is a 2.08% cut.

Qualifying Advanced Payment Model (APM) Conversion Factor

Qualifying APM Participants (QPs) receive even higher benefits:

• Exclusion from MIPS reporting
• Exclusion from MIPS payment adjustments
• For?performance years 2017 – 2022, a 5 percent APM Incentive Payment
• For?performance year 2023, a 3.5 percent APM Incentive Payment
• For?performance years 2024 and beyond, an increased physician fee schedule update based on the QP conversion factor

After the 2023 performance year/2025 payment year, the APM Incentive Payment will end. Instead, beginning for the 2024 performance year/2026 payment year, QPs will receive a higher Medicare Physician Fee Schedule (PFS) update (“qualifying APM conversion factor”) than non-QPs. QPs will continue to be excluded from MIPS reporting and payment adjustments for the applicable year.

• The QP will continue to be excluded from MIPS and associated payment adjustments.
• For?payment years 2026 and beyond, payment rates under the Medicare PFS for services furnished by the eligible clinician will be updated by the 0.75 percent qualifying?APM conversion factor.?

In order to participate in the 0.75 conversion factor your network or organization must be an Advanced APM which means participating in Medicare's eligible risk-based value-based care programs.

Revenue for value-based care organizations is set to grow based on the fee schedule projections, but also with strategic value-based care contracting opportunities.

Now is the time to review current incentive arrangements and set guidelines for future incentive-based proposals. Join us July 20th for "Optimizing Value-Based Care Contracts" Register Here

Kris Gates, [email protected]