Industry Reacts to CMS 2024 PFS Proposed Rule

On July 13, 2023, the Centers for Medicare & Medicaid Services (CMS) issued its annual proposed rule that announces and solicits public comments on proposed policy changes for Medicare payments under the Physician Fee Schedule (PFS), and other Medicare Part B issues, effective on or after January 1, 2024. The calendar year (CY) 2024 PFS proposed rule is one of several proposed rules that reflect a broader Administration-wide strategy to create a more equitable health care system that results in better access to care, quality, affordability, and innovation.

So what are the first thoughts from our industry? Most organizations have released public statements and most will be submitting comments. There will be a 60-day public comment period on this proposed rule. CMS encourages all interested members of the public, including ACOs, providers, suppliers, and Medicare beneficiaries to submit comments so that CMS can consider them as we develop the final rule. The 60-day comment period closes on September 11, 2023. Comments can be submitted at: (in commenting please refer to file code CMS-1784-P).

Here is what we rounded up on initial thoughts.


Statement attributed to Clif Gaus, Sc.D., President and CEO of the National Association of ACOs

The Centers for Medicare & Medicaid Services (CMS) showed its commitment to supporting value-based care and growing participation in accountable care organizations (ACOs) in this proposed rule. It addresses several issues that NAACOS has been advocating for, including improvements in quality reporting, more fair benchmarking policies, a smooth transition to a new risk adjustment model, keeping advanced payments for new ACOs who transition to risk, helping ACOs who serve high-cost beneficiaries and others.

NAACOS thanks CMS for its continued leadership on this issue and its willingness to address the barriers standing in the way of clinicians and health systems who want to provide higher quality, more cost effective, coordinated care for patients.


Statement from Anders Gilberg, Senior Vice President, Government Affairs, Medical Group Management Association

The proposed 2024 Medicare Physician Fee Schedule (PFS) raises significant concerns for medical groups related to its 3.4% reduction to the conversion factor, which further increases the gap between physician practice expenses and Medicare reimbursement rates. Medicare already largely fails to cover the cost of furnishing care to beneficiaries, and the proposed cut to the 2024 conversion factor compounds the problem. Implementation of a new add-on code (G2211) for complex patients highlights CMS’ flawed approach to addressing inadequate Medicare payments for primary care services using a budget neutral methodology. Congress must reexamine existing law to provide an annual physician payment update commensurate with inflation and do away with Medicare’s ‘robbing Peter to pay Paul’ budget neutrality requirements to provide much-needed financial stability for medical practices.

American Physical Therapy Association

Comment from President Roger Herr, PT, MPA

APTA’s preliminary analysis of the rule demonstrates how critical it is for Congress to intervene and find a long-term solution for the systemic problems in the fee schedule. Of note, Year 2024 will be the fourth consecutive year that Medicare has reduced payment for physical therapists and most other health care providers. And, it is during these same years that providers have braved the COVID-19 pandemic, experienced workforce shortages, transitioned to telehealth, and faced countless other challenges — these providers deserve to be paid fairly for their services. Fair pay will lead to greater access to services where they are threatened most, in rural and underserved communities.


AMGA called on Congress to prevent proposed cuts to the Medicare conversion factor from hindering the ability of multispecialty medical groups and integrated systems of care to provide high-quality care to their patients. The Centers for Medicare & Medicaid Services (CMS) proposed a cut in the Medicare conversion factor that, if left unaddressed, would exacerbate the financial pressures facing AMGA members, as Medicare physician payments already are not keeping up with the increasing cost of delivering healthcare.

“AMGA members cannot absorb this proposed payment cut,” said AMGA President and CEO Jerry Penso, MD, MBA. “Their expenses are continuing to increase, and Congress needs to act to ensure Medicare’s reimbursement reflects the cost of delivering high-quality care to patients. We’re concerned AMGA members may be forced to make tough decisions on staffing and the services they can offer to their communities if proposed cuts are left unaddressed.”


Statement attributable to Jesse M. Ehrenfeld, M.D., M.P.H., President, American Medical Association

“The proposed Medicare physician payment schedule released today is a critical reminder that patients and physicians desperately need Congress to develop a permanent solution that addresses the financial instability and threatens access to care.

“The payment schedule estimates the Medicare Economic Index (MEI) increase at 4.5 percent, the highest this century and on top of last year’s 3.8 percent. MEI is the government measure of inflation in medical practice costs.

“In the face of these growing costs of running a medical practice, physicians have faced the COVID pandemic and increased inflation. Not only have Medicare payments failed to respond, but physicians saw a 2% payment reduction for 2023, creating an additional challenge at a perilous moment. For 2024, the new rule indicates there will be another downward adjustment of 3.36 percent.

ATA and ATA Action

The American Telemedicine Association (ATA) and ATA Action issued the following statement:

We are encouraged to see that the proposed policy changes in the Physician Fee Schedule continue to reflect the Biden Administration’s strong support of telehealth and clearly indicate CMS’ continued interest in providing access to telehealth services for Medicare beneficiaries, acknowledging that both audiovisual and audio-only telehealth services ‘have enabled individuals in rural and underserved areas to have improved access to care,’” said Kyle Zebley, senior vice president, public policy, the ATA, and executive director, ATA Action. “At first glance, the proposed policies would extend many of the telehealth flexibilities enacted during the public health emergency until the end of 2024, aligning with the policies extended in the omnibus by Congress at the end of 2022.

Connected Health Initiative

CHI Statement

The Connected Health Initiative (CHI) thanks the Centers for Medicare & Medicaid Services (CMS) for its continued leadership in providing high-quality, cost-effective care for Americans, and for its release of the draft 2024 Medicare Physician Fee Schedule (PFS). While we continue reviewing proposed changes to this crucial program, we are appreciative of CMS’ ongoing commitment to responsibly advancing its support for using digital health to improve beneficiary outcomes while reducing program costs.