Vitreoretinal surgeons and other physicians will see a significant reduction in Medicare reimbursement in 2023, while hospitals and ambulatory surgical centers (ASCs) will receive a slight increase in payment for surgical procedures, according to the Physician Fee Schedule (PFS) final rule issued November 1, 2022, by the Centers for Medicare and Medicaid Services (CMS).

Under CMS’s final rule, the conversion factor (CF) used to determine physician reimbursement will drop by 4.47% in 2023, from $34.61 to $33.06. The conversion factor, which federal law requires to be updated annually, is part of a complex formula used to determine how much Medicare will pay for medical procedures.

In a press release, CMS explained that the CF reduction is due to federal budget neutrality adjustments, as well as the expiration of a 3% supplemental increase to PFS payments for 2022 that was authorized by the Protecting Medicare and American Farmers from Sequester Cuts Act of 2021. When coupled with a 4% Medicare cut that is required under the 2010 Statutory Pay-As-You-Go (PAYGO) Act, physicians will face a nearly 8.5% Medicare cut beginning on January 1, 2023.

Physician advocacy groups have strenuously opposed the Medicare reduction, citing inflation of roughly 8% over the past 12 months and the effects of the “Great Resignation” which have forced many medical practices to pay more to retain and attract quality staff.
“The final rule comes amid surging medical inflation and staff retention challenges practices are experiencing across the country,” said George Williams, senior secretary for advocacy for the American Academy of Ophthalmology (AAO), in a statement. “As the value of Medicare physician payments continues to plummet on an inflation-adjusted basis, the cuts will further diminish the financial support which surgical practices around the country rely on at a time when they need it most.”

Consequently, AAO, the American Medical Association (AMA), the American College of Physicians, and other advocacy groups have encouraged Congress to pass two pieces of legislation that would alleviate the cuts—H.R. 8800, the Supporting Medicare Providers Act of 2022, and H.R. 3173/S. 3018, the Improving Seniors’ Timely Access to Care Act. The PAYGO Act requires changes to be approved by congress 15 days before the end of the legislative session, meaning that Congress would have to pass these bills by December 16, 2022, to reverse the Medicare reimbursement cuts.

The news from CMS was not all bad for retinal specialists, as the physician fee schedule final rule for 2023 will increase Medicare payment rates for retina procedures and other surgeries performed in an ASC by 3.8 percent. This increase is about 1.1% higher than the 2.7% CMS projected in its initial draft of the PFS rule, issued in July 2022. Medicare reimbursement for hospital procedures would also increase by 3.8% in 2023. These fee changes and other policies in the CMS final rule will affect over 3,400 hospitals and approximately 5,500 ASCs.
In issuing its final rule for 2023, CMS rejected a proposal that would have established facility payments for retina surgeries performed in physician offices, rather than in ASCs or hospitals. During a comment period prior to release of the final rule, numerous ophthalmic advocacy groups opposed the office-based surgery proposal, including AAO, the American Society of Cataract and Refractive Surgeons (ASCRS), the American Society of Retina Surgeons (ASRS), the Ophthalmic Outpatient Surgery Society (OOSS), and the Ambulatory Surgery Center Association (ASCA).

“CMS’s ruling [on office-based surgery] is a victory for patients,” said Jeffrey Whitman, MD, the chairman of government affairs for OOSS. “It reflects the concerns of OOSS and all the major ophthalmology organizations that cataract, retina, and glaucoma patients are vulnerable and should be treated in an appropriately regulated environment like the ASC or HOPD. Our patients are typically older and present with multiple comorbidities. Virtually all ASCs are Medicare-certified, state-licensed and accredited, and meet rigorous standards for infection control, facilities and environment and equipment, life safety, quality of care, and anesthesia, to name a few. Regulation of [in-office] surgical facilities at the state level is non-existent at worst and inadequate and inconsistent at best.  CMS’s ruling reflects the view that, to ensure patient health and safety, any facility that is conducting sterile intraocular procedures should be required to meet the same standards as those required for Medicare certification.”