Update: On July 13, 2023, CMS released the proposed 2024 Medicare Physician Fee Schedule. Based on this release, the anticipated implementation of the billing provider for split/shared visit based on time-only has been delayed to December 31, 2024.
With the 2023 Medicare Physician Fee Schedule (MPFS) Final Rule, the Centers for Medicare & Medicaid Services (CMS) finalized a one-year delay of the time requirement for split/shared visit billing.[1] In brief, the time requirement will cause split/shared services to be billed by the provider [i.e., physician or advanced practice provider (APP)] who spends a substantive portion of the total time (>50%) performing the split/shared visit. In contrast, currently and until the one-year delay ends on December 31, 2023, providers will continue to have a choice of using either the history, physical exam, medical decision-making (MDM), or more than half of the total practitioner time (>50%) to define the substantive portion of the visit.
While organizations and providers continue to wrangle with these billing changes, the potential unintended impact on provider workflow, the documentation requirements of the change, and the impact to provider compensation related to unit-based compensation models [e.g., work relative value unit (wRVU) models] could be significant.
Providers should be proactive in analyzing compensation plans to prepare for the changes in 2024. Following are three key considerations surrounding the impact time-based billing may place on provider compensation structures.
- Changes in attribution of wRVUs between providers should be anticipated and may impact provider compensation as compared to historical compensation levels. Time-based billing may change who “gets credit” for the wRVU between the physician and APP. For providers in a wRVU-based compensation structure, the number of wRVUs attributed to each provider may change, as the APP could spend more of the total substantive time with the patient than the physician. If this occurs, the split/shared visit must be billed under the APP’s provider identification number. Additionally, from a workflow perspective and when clinically appropriate, physicians could choose to yield these split/shared visits to APPs, so they can focus on more acute and/or complex problems. In each case, wRVU-based compensation might unexpectedly increase or decrease accordingly for each provider, due to the new split/shared billing requirement.
- Modification in the wRVU values of hospital inpatient Current Procedural Terminology (CPT)[2] codes may compound the impact of split/shared visit changes. The 2023 MPFS modified the hospital inpatient CPT code wRVU values, and 2024 could bring additional wRVU changes. Depending on the workflows in a provider’s inpatient setting (e.g., initial hospital care is provided more often by a physician rather than an APP), the number of wRVUs will change not only because of the split/shared billing rule changes but also because of the wRVU value changes. These changes could then impact compensation for those providers in a wRVU-based compensation model. The following table provides a high-level overview of the wRVU valuation changes in 2023
- Application of current benchmark data could have fundamental differences for a period while the split/shared visit transition occurs. Any assessment of provider compensation plans and comparison to benchmark survey data will need to consider that compensation benchmark surveys are at least one year behind, and adjustments might need to be made in their application for the new split/shared billing regulations. Specifically, these adjustments might need to occur until 2025 when benchmark surveys based on 2024 reported data are released. At that time, the impact of these changes to provider wRVUs (and other related elements) will be more apparent.
Due to differences among organizations in the provider staffing complement, patient workflows, payer mix, and patient acuity, among others, it is difficult to estimate a “rule of thumb” impact to provider compensation related to these split/shared billing changes. Any compensation plan design modifications will require planful communication with affected providers as well as compensation plan adjustments and/or employment agreement amendments and time to address questions or issues that may arise. The best course of action is to begin analysis now and plan proactively for the rule changes slated to go into effect January 1, 2024.
If you would like assistance with physician compensation or fair market value or any matter involving valuation, compliance, or strategy and integration, one of our executive contacts would be happy to assist. You may email them below or call (800) 270-9629.
[1] Critical care changes for split/shared billing were not delayed (i.e., critical care is using time-based billing in calendar year 2023). https://www.cms.gov/medicare/medicare-fee-for-service-payment/physicianfeesched
[2] Current Procedural Terminology (CPT® or CPT), a registered trademark of the American Medical Association (AMA)
