CMS Releases CY 2024 Physician Fee Schedule Final Rule - McDermott+Consulting

CMS Releases CY 2024 Physician Fee Schedule Final Rule

On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2024 Revisions to Payment Policies Under the Physician Fee Schedule (PFS) and Other Revisions to Medicare Part B [CMS-1784-F] Final Rule, which includes policies related to Medicare physician payment and the Quality Payment Program (QPP). Physicians and other clinicians once again face large cuts—more than 3.37% for CY 2024, a slightly larger cut than was outlined in the proposed rule. The finalized conversion factor (CF) update is primarily based on three factors: a statutory 0% update scheduled for the PFS in CY 2024, a negative 2.18% budget neutrality adjustment due to final PFS policies and a funding patch passed by Congress at the end of CY 2022 through the Consolidated Appropriations Act, 2023 (CAA, 2023), which partially mitigated a cut to the CY 2023 CF and offset part of the reduction to the CY 2024 CF.


While Congress has provided temporary partial fixes to physician payment in the last several years, the relief from the CAA, 2023, does not offset all the cuts in this rule. Lawmakers are considering legislative options, but it remains unclear whether relief will be provided before the start of 2024. Beyond the cut to the CF, CMS finalized significant policies related to telehealth services, updates to the Medicare Shared Savings Program (MSSP), initiatives promoting coverage and payment for additional services, and other changes to further develop physician quality initiatives.

  • The final regulation is available here.
  • The press release is available here.
  • The fact sheet on payment policies is available here.
  • The QPP factsheet is available here.
  • The MSSP factsheet is available here.

Key Takeaways

  • CF Reduction: CMS finalized a 2024 CF of $32.7442, representing a 3.37% reduction from the 2023 physician CF of $33.8872, and a 2024 anesthesia CF of $20.4349, representing a 3.27% reduction from the 2023 anesthesia CF of $21.1249.
  • Add-on Code for Complexity: The final rule implements a new add-on code for complexity, G2211, which was previously finalized but delayed by Congress until 2024.
  • Telehealth: While no new codes were permanently added to the Medicare Telehealth Services List, CMS finalized a new process for adding, removing or otherwise changing codes on the list and created differential payment based on the place of service.
  • Merit-Based Incentive Payment System (MIPS): MCMS maintained the MIPS performance threshold at 75 points, backing away from its initial proposal to make the program more challenging in 2024 by raising the threshold to 82 points.
  • Appropriate Use Criteria (AUC) Program: The final rule permanently sunsets the AUC program
  • MSSP: The final rule implements changes to the MSSP, including to the financial benchmarking methodology and assignment methodology.
  • Advancing health equity: CMS finalized new codes and payment methods for social determinants of health risk assessments, community health integration, principal illness navigation and caregiver training services.

For more information, please contact: Jeffrey Davis, Leigh Feldman, Deborah Godes, Kayla Holgash, Rachel Hollander, Lauren Knizner, Marie Knoll, Kristen O’Brien, Rachel Stauffer, Devin Stone or Emily R. Curran (McDermott Will & Emery—Associate).