The Biden administration has been busy this fall releasing a range of regulations affecting patients, providers, and other stakeholders. Some of these regulations are annual rulemaking, like those governing physician, hospital outpatient, and end-stage renal disease (ESRD) services, while others represent the administration’s attempt to develop new regulatory frameworks, like the Food and Drug Administration’s (FDA) proposed rule on laboratory developed tests (LDTs). We are going to take a closer look at the key provisions in these rules.
Medicare Payment Regulations
CMS outlines annual updates to the payment amounts for services and other policies in the Medicare program through annual rulemaking. This year, as has been the case for twenty years, payments for physician services are set to decrease by 3.37% unless Congress intervenes. Unlike the other Medicare fee schedules governing hospitals, ESRD facilities, skilled nursing facilities, and inpatient rehabilitation facilities, the Medicare Physician Fee Schedule (MPFS) does not have an inflationary update. The last statutory update applied to the MPFS conversion factor was applied in 2019 as provided for in the Medicare Access and CHIP Reauthorization Act. For example, payments under the Medicare Hospital Outpatient Prospective Payment System (OPPS) will increase approximately three percent because of a statutorily required inflationary increase. Hospitals can rely on payment updates, while physicians continually face uncertainty at the end of each year, not knowing if their Medicare payments will remain at current levels, which do not account for inflation, or if there will be cuts to payments.
With the House of Representatives now adjourned for the rest of the year, here are some of the major policies that will go into effect on January 1, 2024.
2024 Medicare Physician Fee Schedule
- The MPFS conversion factor is set to decrease by 3.37% from $33.8872 to $32.7442. The conversion factor decrease is the result of a statutory 0% update scheduled for the physician fee schedule in 2024, a negative 2.18% RVU budget neutrality adjustment, and the expiration of the funding patch Congress passed at the end of 2022 through the Consolidated Appropriations Act of 2023, that partially mitigated a cut to the 2023 conversion factor. Multiple bills that would mitigate or eliminate this cut have been introduced, but we do not expect Congress to act before the end of the year, and instead may address this in early January.
- CMS continues to support the use of telehealth in the Medicare program and has finalized proposals that will allow greater beneficiary access to these services, including payment parity between in-person and virtual services delivered to patients in their homes as long as they remain qualified originating sites. Many organizations have been advocating for continued payment parity since early in the COVID-19 pandemic.
- CMS will implement HCPCS code G2211, a complexity add-on code to be used with outpatient evaluation and management (E/M) visits to capture the additional work associated with longitudinal primary care and other complex care visits. The agency intended to implement this code in 2021, but Congress delayed its implementation by three years. The physician community remains divided on the need for this code.
- To advance health equity and help underserved populations, the agency finalized its proposal to create new services to support care to address health-related social needs, including community health integration, social determinants of health risk assessment, and principal illness navigation services.
- CMS continued expanding coverage of dental services that are inextricably linked to other cover services. Beginning in 2024, Medicare beneficiaries receiving chemotherapy, CAR-T cell therapy, and high-dose bone modifying agenda will have coverage for the related dental services. However, the agency declined to cover dental services related to sickle cell disease and hemophilia.
- To increase provider participation in the Quality Payment Program, CMS finalized five new Merit-based Incentive Payment System Value Pathways (MVPs) for CY 2024. With the additional of five new MVPs, there are now a total of 16 MVPS available for reporting for the 2024 performance period.
2024 Hospital Outpatient Prospective Payment System
- Payment rates will increase by 3.1% which is based on inflationary changes to the provision of services under the OPPS.
- The final rule made conforming changes to ambulatory payment classification (APCs) to implement payment for dental services related to certain Medicare covered services. The conforming changes allow for the adoption of payment for dental services policy across payment systems.
- The agency relaxed the supervision requirements for cardiac rehabilitation, intensive cardiac rehabilitation and pulmonary rehabilitation services allowing them to be delivered under the supervision of a physician assistant, nurse practitioner, or clinical nurse specialist.
- CMS requested comments on potential payment adjustments to account for the additional costs of establishing and maintaining a buffer stock of essential medicines to potentially mitigate shortages. However, the agency did not finalize policy on this issue based on the range of concerns stakeholders raised. CMS committed to engaging with stakeholders on this issue and will consider potential policy changes in the future.
2024 ESRD Prospective Payment System and Quality Incentive Program
- The ESRD Prospective Payment System base rate increased by 2.1%, a slightly larger increase than what had been proposed.
- CMS finalized a requirement for ESRD facilities to report the time that a beneficiary spends receiving in-center hemodialysis treatment, referred to as time on machine, on claims beginning January 1, 2025.
- The agency finalized a temporary add-on payment adjustment of 30% of the per treatment payment amount for dialysis services delivered to children under 18 years of age for three years, beginning on January 1, 2024. After that three-year period, the amount of the add-on payment will be determined by the data reported on centers’ cost reports.
- CMS added the Facility Commitment to Health Equity reporting measure for Performance Year (PY) 2026 and the Screening for Social Drivers of Health and Screen Positive Rate for Social Drivers of Health reporting measures for PY 2027 to the Quality Incentive Program. This addition of equity-focused measures is like actions taken in other Medicare payment systems.
FDA Plan to Regulate LDTs
After Congress failed to pass legislation regulating LDTs last year, the FDA stepped in by proposing its own regulatory scheme for these tests in a proposed rule released in late September. As the agency currently exercises enforcement discretion with respect to LDTs, this rule may have a profound effect on the laboratory industry and patient care as LDTs would be required to undergo the same regulatory process as medical devices if finalized. This is seen by many as an undue regulatory burden and overreach by the FDA.
CMS and the Office of the National Coordinator Go After Information Blockers
CMS, in coordination with the National Coordinator for Health Information Technology and the Department of Health and Human Services, released a proposed rule outlining the penalties for physicians found to be “information blockers.” Information blocking as defined in the 21st Century Cures Act is “a practice that is likely to interfere with, prevent, or materially discourage access, exchange, or use of electronic health information.” While the regulations governing information blocking are not new and are not open for comment, the proposal to penalize physicians is new. Physicians who participate in the Merit-based Incentive Payment System (MIPS) and accountable care organizations (ACOs) may be subject to the penalties, including loss of incentive payments under the MIPS program and one-year bans from participating in an ACO.
CRD Associates provides insight and analysis of proposed and final regulations and assists our clients with composing and submitting comments for these rules and others. If you have any questions, about these rules or others, please reach out to CRD Associates at [email protected]