Medicare Physician Fee Schedule 2023 Proposed Rule Summary

Sarah Hohman, Deputy Director of Government Affairs


On July 7th, the Centers for Medicare and Medicaid Services (CMS) issued the CY 2023 Medicare Physician Fee Schedule Proposed Rule. This year’s 2,066-page rule includes a few Rural Health Clinic (RHC) specific policy proposals as well as other provisions with implications for the RHC community. If these policies are finalized this November, they would go into effect January 1, 2023, unless otherwise noted.


Of note, CMS provides further detail on the setting of clinic-specific upper payment limits for grandfathered RHCs and adds additional care management CPT codes to be covered under G0511. The MPFS also contains a proposal for rebasing the Medicare Economic Index (MEI).


The National Association of Rural Health Clinics (NARHC) will be providing comments to CMS in the coming months, you are welcome to offer feedback to NARHC (contact info below) or submit your own comments directly to CMS here by September 6, 2022.


RHC Payment Methodology


As you are likely aware, the Consolidated Appropriations Act of 2021 contained significant reforms to the way RHCs are reimbursed by Medicare. This legislation, also known as the RHC payment modernization policy, resulted in an increase to the statutory payment cap for independent RHCs of $13 per year until reaching $190 in 2028. Additionally, all previously uncapped RHCs are “grandfathered-in” at their clinic specific upper payment rate based on each clinic’s 2020 rates.


The 2022 Medicare Physician Fee Schedule (MPFS) finalized last November operationalized many aspects of this policy including the use of final cost settled rates instead of interim rates, change of ownership implications, and allowed for consolidated cost report filing, so long as the RHCs fell within the same national statutory payment limit (i.e. grandfathered and non-grandfathered clinics cannot file consolidated cost reports).


NARHC was appreciative of the ways that CMS recognized and incorporated our various insight on these provisions, directly citing our comments throughout the final rule. Certain clarifications related to the clinic-specific upper payment limits remained necessary however, and can be found in the CY 2023 MPFS summarized below.


Previous rules had not addressed whether cost reports must span a full 12 consecutive month period, or if payment limits could be determined based on a shortened cost report period. In this rule, CMS proposes the following:


For provider-based RHCs that had an all-inclusive rate (AIR) established for services furnished in 2020:

MACs should use the cost report ending in 2020 that reports costs for 12 consecutive months. If the RHC does not have a 12-consecutive month cost report ending in 2020, the MACs should use the next most-recent final settled cost report that reports cost for 12 consecutive months….”


If a 12-consecutive month cost report ending in 2020 is not available, the next available 12-consecutive month cost report that “reports costs for RHC services furnished in 2020, (for example, a cost reporting period October 1, 2020, through September 30, 2021) should be used by the MAC in the rate-setting process.


For provider-based RHCs that did not have an AIR established for services furnished in 2020:

“MACs use the cost report ending in 2021 that reports costs for 12 consecutive months. If the RHC does not have a 12-consecutive month cost report ending in 2021, the MACs should use the next most-recent final settled cost report that reports cost for 12 consecutive months.”


Additionally for this subset of RHCs, the 2021 MEI percentage increase update is not applied as their upper payment limit, established based on 2021 services rendered, not 2020 services rendered, already incorporates the MEI update.


NARHC intends to comment in support of this proposal to use 12-consecutive months of cost report data as opposed to combining cost report data over multiple years to equal 12-consective months in order to establish the most accurate payment limit base moving forward.


New Care Management Codes Billable in RHCs


Since 2016, RHCs have been able to bill for Chronic Care Management (CCM) services and over the last several years, the services eligible for reimbursement have expanded.


During CY 2022, RHCs bill HCPCS code G0511 for any of the services described by codes 99484, 99487, 99490, 99491, 99424, and 99426. G0511 pays a consolidated fee schedule amount, $79.25 in 2022, which is the average of the Physician Fee Schedule (PFS) rate for these CCM and principal care management (PCM) services furnished by a physician or other qualified health care professional.


In this proposed rule, CMS proposed new care management codes for Chronic Pain Management (CPM) and General Behavioral Health Integration (GBHI) that can be reimbursed in RHCs and FQHCs, also by using the general care management code G0511. These codes can be billed alone or in addition to the AIR payment.


General Behavioral Health Integration
As clinical psychologists (CPs) and clinical social workers (CSWs) are statutorily authorized to be providers in the RHC setting, CMS proposes that when these practitioners provide services described by GBHI1, the RHC can bill G0511 beginning January 1, 2023. GBHI1 is described as:

“Care management services for behavioral health conditions, at least 20 minutes of clinical psychologist or clinical social worker time, per calendar month, with the following required elements: initial assessment or follow-up monitoring, including the use of applicable validated rating scales; behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes; facilitating and coordinating treatment such as psychotherapy, coordination with and/or referral to physicians and practitioners who are authorized by Medicare law to prescribe medications and furnish E/M services, counseling and/or psychiatric consultation; and continuity of care with a designated member of the care team.”


Chronic Pain Management
CMS proposed two new HCPCS codes to describe the services available under Chronic Pain Management (CPM).

“(1) HCPCS codes GYYY1: Chronic pain management and treatment, monthly bundle including, diagnosis; assessment and monitoring; administration of a validated pain rating scale or tool; the development, implementation, revision, and maintenance of a person-centered care plan that includes strengths, goals, clinical needs, and desired outcomes; overall treatment management; facilitation and coordination of any necessary behavioral health treatment; medication management; pain and health literacy counseling; any necessary chronic pain related crisis care; and ongoing communication and care coordination between relevant practitioners furnishing care, e.g. physical therapy and occupational therapy, and community based care, as appropriate. Required face-to-face visit at least 30 minutes provided by a physician or other qualified health professional; first 30 minutes personally provided by physician or other qualified health care professional, per calendar month. (When using GYYY1, 30 minutes must be met or exceeded.)


and (2) HCPCS code GYYY2: Each additional 15 minutes of chronic pain management and treatment by a physician or other qualified health care professional, per calendar month).”


NARHC appreciates the ways in which CMS continues to expand upon the care management services billable within RHCs. GYYY1 however, which serves as the placeholder code until the development of a CPM code, appears to meet the definition of an RHC encounter and therefore we believe should be billed as an RHC visit and reimbursed at the RHC’s All-Inclusive Rate (AIR). It is concerning that a service which clearly meets the definition of an encounter is being considered by CMS as a care management code, and we will include this discrepancy in our comments.


CMS does not propose any change to the average used to calculate the reimbursement rate of G0511 as they see the addition of these codes to already be covered by the 6 codes that establish the average payment rate, however this will be updated beginning January 1, 2023, as it typically is annually.


Medicare Economic Index (MEI) Rebasing


While not specific to RHCs, the MPFS also proposed a rebasing of the Medicare Economic Index (MEI) for CY 2023. This update would use a new methodology with base year expenses from 2017 as opposed to the current 2006-based MEI. CMS explains that this will be more reflective of current market conditions and make it more attainable to update the MEI on a regular basis.


CMS has utilized the MEI for various purposes since 1975 and is intended to reflect the weighted-average annual price change for physicians’ own time and their practice expense plus an adjustment for the change in economy-wide productivity. Over the last several decades, the MEI has been rebased several times and certain formulas that at one time used the MEI in their calculations, such as the PFS conversion factor, no longer utilize this measure. The setting of RHC payment limits remains one use of the MEI still in effect today.


While the formulas itself are quite complicated, CMS explains that the proposal to rebase and revise the MEI will use publicly available data sources and be more representative of “all types of physician practice ownership.”


Ultimately, the percent change of the proposed 2017-based MEI for CY 2023 is an increase of 3.8 percent, while the 2006-based MEI would result in a 3.7 percent increase. While NARHC is appreciative of the efforts by CMS to acknowledge the issues with the outdated formula, we recognize that this increase remains significantly behind the high inflation rates that are impacting providers today. NARHC will work with policymakers to ensure MEI is more appropriately representative of medical inflation.




The proposed rule implements the various telehealth provisions established in the Consolidated Appropriations Act of 2022, or the “omnibus” bill and makes necessary technical changes in the regulation for the following:

  • The temporary Public Health Emergency (PHE) medical telehealth flexibilities including reimbursement through G2025, removal of originating and geographic site requirements, and audio-only provision of services are extended for 151-days post PHE. We still await legislative action to make all Medicare telehealth services permanent.
  • The in-person requirement for mental health visits furnished via telehealth, which can now be permanently offered by RHCs, is also waived for 151-days post PHE.

Other NARHC Comments


Unfortunately, CMS did not use this rulemaking opportunity to provide clarity on a variety of topics that impact RHCs including aspects of telehealth policy such as what services should be billed G2025 versus behavioral health services now reimbursed under the RHC’s AIR. Additionally, CMS did not clarify previous questions regarding the in-person requirements associated with mental health care provided via telehealth that will be in effect once the PHE (plus 151-days) has expired.


Additionally, we were hopeful that CMS would permit RHCs to bill for Remote Patient Monitoring (RPM) services in this rulemaking. While NARHC is also pursuing legislative opportunities to make this possible, we will also comment our interest in this being done through rulemaking.


More broadly, we continue to lack policy clarity in key guidance documents that have significant impacts on RHCs, including but not limited to Medicare Benefit Policy Manual Chapter 13 and State Operations Manual Appendix G. For example, Chapter 13 still includes old RHC payment methodology and CMS has yet to issue guidance regarding the Census Bureau no longer classifying “urbanized” areas. In totality, we have a significant number of policies that remain vague and are in need of more guidance and detail from CMS.

NARHC was hopeful that CMS would do more to address many of these critical issues in this proposed rule and will continue to escalate these comments and concerns with CMS.

Original article 07/08/2022:


Yesterday, CMS released the CY 2023 Medicare Physician Fee Schedule.


Key provisions for Rural Health Clinics begin on page 515 and include the addition of new care management CPT codes covered under G0511 and further details regarding the setting of grandfathered, clinic-specific, upper payment limits. The MPFS also contains a proposal for rebasing the Medicare Economic Index (MEI).


NARHC is currently completing a full analysis of the MPFS and will update this article with a breakdown of the key RHC provisions soon. CMS will accept comments until September 7, 2022.


Additionally, the Health Resources and Services Administration (HRSA) issued the following notice on July 7, 2022 regarding HPSAs in Proposed for Withdrawal status intended to be withdrawn on July 1, 2022:

“Given the COVID-19 pandemic's impact on the health workforce and health care service delivery, HRSA is providing a longer transition time for jurisdictions and facilities to prepare for potential change of HPSA designations. HPSA designations that are currently proposed for withdrawal will remain in this status until they are re-evaluated in preparation for the publication of the 2023 HPSA Federal Register Notice. If these HPSAs do not meet the requirements for designation at the time of the publication of the July 2023 HPSA Federal Register Notice next year, they will be withdrawn. This additional time will allow jurisdictions to re-evaluate their HPSAs against the designation criteria, and plan for potential changes in staffing.”


We encourage you to stay up to date on key RHC news on and contact Sarah Hohman, NARHC Director of Government Affairs,, or Nathan Baugh, NARHC Executive Director, with any questions or concerns.