The Centers for Medicare and Medicaid Services (CMS) updates its reimbursement rules and rates for medical services each year. This report highlights the most relevant changes in the 2024 update and the potential impact on workers compensation (WC) medical costs.
Medical cost trends continue to be top of mind for industry stakeholders, and each year NCCI monitors changes in CMS reimbursement rules and rates that impact WC medical costs.
The impacts of these changes on WC medical costs vary by state. The medical service categories covered by medical fee schedules, the extent to which each fee schedule incorporates the CMS rules and rates, and the distribution of medical costs all influence how each state is impacted.
This report highlights the 2024 changes to CMS fee schedules for the following service categories:
- Physician—Physician costs account for about 40% of countrywide WC medical expenditures. At
AIS 2024, we shared that physician costs for states with fee schedules in place typically grow at a slower rate. See the slide from
State of the Line:
- Facility—Facility costs also account for about 40% of countrywide WC medical expenditures and facility base rates saw moderate increases in line with prior years.
- Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS)—The share of costs that DMEPOS represents varies by state, ranging between 4% and 13% of WC medical costs.
Key Findings
- Effective January 1, 2024, CMS initially published the physician conversion factor of 32.7442, which was a 3.4% decrease from 2023.
- Subsequently, Congress passed the Consolidated Appropriations Act, 2024, which included a temporary payment increase of 1.7%, effective March 9, 2024.
- This change increased the conversion factor to 33.2875, a 1.8% decrease from 2023, from March 9 through the end of 2024.
- CMS added a new code to the physician fee schedule in 2024.
- This code, G2211, is an evaluation and management add-on code. We’ll monitor how commonly physicians utilize the code in WC.
- Facility base rates saw moderate increases in the 2% to 3% range.
- The 2.6% increase to the CMS DMEPOS update factor in 2024 is significantly lower than the increases seen in 2022 and 2023 of 5.1% and 8.7%, respectively.
Like 2023, the factors published by CMS continue to not be a source for significant upward pressure on workers compensation medical costs.
For more research findings, check out the
complete report.
Connect with the authors if you have questions or to gain additional insights.
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