A Small Bright Spot in the 2024 Medicare Physician Fee Schedule

The Centers for Medicare & Medicaid Services (CMS) released the 2024 Medicare Physician Fee Schedule final rule in November. While the conversion factor for reimbursement decreased to $32.74 (down $1.15 from 2023), there was a notable add-on code that may benefit physicians. CMS activated G2211, an add-on code to recognize complexity in office encounters. This is not a new code, but it is now unbundled and separately payable.

The full description of the G2211 code is as follows:

Visit complexity inherent to evaluation and management associated with medical care services that serve as the continuing focal point for all needed health care services and/or with medical care services that are part of ongoing care related to a patient’s single, serious condition or a complex condition. (Add-on code, list separately in addition to office/outpatient evaluation and management visit, new or established)

The current usage guidelines¹ designate that the code be used with office visit codes 99202-99215. It is not restricted to higher levels, such as levels four and five, and can be used with any code in the code set. Additionally, the guidelines state that the code must meet the following requirements:

• Pertains to diagnoses that require “ongoing care”
• Pertains to diagnoses of a “single, serious condition, or complex condition”
• Should never be used with a simple, time-limited problem (i.e., should be a chronic condition)
• Cannot be billed alongside a procedure with the office encounter (i.e., not allowed with modifier -25)
• Is not restricted to any specialty but is expected to be used with diagnoses that have “consistency and continuity over time”
• Applicable if the provider is managing “total patient care” for a “single, serious condition or complex condition”

Documentation Requirements

There were no documentation requirements mentioned in the final rule. However, it is clear that CMS will be analyzing the longitudinal relationship between the provider and patient, which implies ongoing care and subsequent visits. CMS will likely institute a claims review to validate the relationship and chronology. However, thorough documentation of the assessment and plan is recommended, which clearly shows the management of that particular diagnosis provided during the visit.

By utilizing terms like continuity, consistency over time, and longitudinal care, CMS clearly intends for code G2211 to recognize the additional work inherent in building long-term relationships with patients, either as a primary care provider or as a specialist managing chronic complex or serious conditions. Picking apart the guidelines, we see few bright lines for usage. The definition of chronic condition can be vague, but we refer readers to the CMS list of chronic conditions². A “serious or complex condition” is not defined, but at a minimum we can assume it is one that jeopardizes the life, limb, organ, or functional status of the patient. CMS states that examples of conditions that do not meet the “serious or complex” threshold are mole removal, treatment of a simple virus, seasonal allergies, and initial treatment of gastroesophageal reflux disease or fracture.

The lack of comorbidities, or the lack of a treatment plan for comorbidities, might be a general guide as to when G2211 is not appropriate.

Financially, Medicare prices this code at $16.04 before any geographic adjustments. Medicare Advantage plans are supposed to adhere to CMS guidelines, but this can be carrier-specific. Commercial payers have complete discretion to recognize or ignore this code. G2211 has a total relative value unit (RVU) of 0.49, including a work component of 0.33 RVUs. Depending on the number of applicable office encounters, the total impact could be sizable.

CMS estimates that up to 54% of E/M encounters will use code G2211, but the impact by specialty will vary significantly. Specialties that are largely clinic-based will have more opportunities than proceduralists. Medical specialties in which providers inherently establish long-term relationships with patients, such as primary care or specialties that deal with chronic conditions, are more likely to use the new code than specialties that deal primarily with acute conditions.

For some practices, revenue reduction from the 2024 conversion factor (CF) could be balanced by the use of G2211. Consider the combined impact of the CF and the add-on code for these specialties:

• Internal medicine is projected to see a reimbursement reduction of 1.82% in 2024 due to the decrease in the CF. However, if only half of office encounters qualify for G2211, the net impact could be an overall increase of 2.66%.
• A heavily procedural specialty such as cardiac surgery is projected to see a reduction of 3.45% from the CF. While they may have some encounters where G2211 is appropriate, there are simply not enough. Even assuming half of all office encounters qualify, the net impact is a 1.96% overall decrease.
• In the middle are specialties with a mix of procedures and clinic visits. A pain management physician will see a decline of 2.31% from the CF but could recoup that amount if G2211 is used on slightly over 25% of office visits. Similarly, a dermatologist will lose 2.66% from the CF and would need nearly 75% of office encounters to qualify for the complex visit add-on to be back to neutral.

As this is uncharted territory, we can expect clarifications from Medicare to clear up the uncertainty. It is also likely they will use claims audits to confirm a longitudinal relationship with the patient.

Overall, the activation of G2211 is beneficial because it recognizes the time and mental processing required to manage patients with complex, serious, and/or chronic conditions. Even though the CF is decreasing due to budget neutrality, this development helps office-based specialists maintain and perhaps improve their Medicare collections. While proceduralists may be out of luck, it is worth noting that the ambulatory surgery centers’ payment rate is increasing 3.1%, which is the same as hospital outpatient departments.

Whether you need help assessing the impact of the CMS 2024 Medicare Physician Fee Schedule, reducing your practice costs, or enhancing your practice revenues, contact KSM’s healthcare consulting team or complete this form.

¹MLN Matters, MM13272, https://www.cms.gov/files/document/mm13272-edits-prevent-payment-g2211-office/outpatient-evaluation-and-management-visit-and-modifier.pdf

²CMS chronic conditions (at a minimum) are atrial fibrillation, autism, cancer, chronic kidney disease, chronic obstructive pulmonary disease, depression, diabetes, drug/substance abuse, HIV, heart failure, hepatitis, hyperlipidemia, hypertension, ischemic heart disease, osteoporosis, psychosis, stroke.