Weekly Roundup – July 10-14, 2023
Your weekly source for physician payment, coding, coverage, and quality reporting news highlights.
The long-awaited CY 2024 Medicare Physician Fee Schedule was released late Thursday afternoon – in all its 1,920 pages of glory. The agency also released the Hospital Outpatient Regulations on Thursday afternoon. In a late entry to the Health Affairs “You know you are a health policy wonk” contest, how about “You know you are a health policy wonk if you are spending this mid-July summer weekend poring over payment rules instead of (insert any summer-related activity). Have a great weekend!
PAYMENT
CY 2024 Medicare Physician Fee Schedule Proposed Rule Released
On Thursday, July 13, 2023, the Centers for Medicare and Medicaid Services (CMS) posted the CY 2024 Medicare Physician Fee Schedule.
The 2024 Proposed Physician Conversion Factor is: $32.7476. This is a reduction of 3.34% from the 2023 Physician CF of $33.8872. The change in value is driven by a 0% annual update, a negative 2.17% impact from budget neutrality adjustments, the expiration of the 2.5% statutory payment increase for CY 2023, and a 1.25% statutory payment increase for 2024. Addressing this payment reduction will require Congressional action. Providers were anticipating this cut and have been heavily lobbying Congress for a short-term solution to avoid a payment cut in 2024 and a more long-term solution for the physician payment system to bring greater stability and annual updates that reflect the rising practice costs to the physician payment system.
While there was the expected disappointment in the payment cuts, telehealth practitioners were likely pleased to see the agency largely continue telehealth flexibilities through CY 2024 (including the higher non-facility payment for office-based clinicians). CMS is also proposing coding and payment changes targeted at patient-centered care and more complex patients. This includes payment for caregiver training services; conducting Community Health Integration, Social Determinants of Health (SDOH) Risk Assessment, and Principal Illness Navigation services; and providing primary care and longitudinal care of complex patients. The proposed rule also updates the agency's Quality Payment Program and the Medicare Shared Savings Program.
The CY 20024 Proposed Rule, press release, and fact sheet are available on the CMS website. Comments are due on September 11, 2023. A more detailed summary of this proposed rule will be available on this website next week.
Medicare’s 340B Solution: Lump Sum Payments to More than 1,600 Hospitals and 16 Years of 0.5% Cuts to All Hospitals
On July 7, 2023, CMS released the Hospital Outpatient Prospective Payment System: Remedy for 340B-Acquired Drugs Purchased in Cost Years 2018-2022. A fact sheet is also available; comments are due on September 5, 2023.
Background: The 340B Drug Pricing Program, a federal program created in 1992, requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices. Historically CMS had been paying Average Sales Price (ASP) + 6%. From 2018 through the third quarter of 2022, CMS reduced the payment rate for 340B drugs to ASP minus 22.5% and, at the same time, increased payments for non-drug items and services to maintain budget neutrality. The agency indicated that this change better reflects the actual costs of 340B drugs. There has been considerable litigation around this policy, and as a result, the agency was forced to revert to the original payment rata, and as a result, claims paid after September 28, 2022, were paid at ASP+6%. The agency still had to adjust payments made between 2018 and September 27, 2022.
Proposal: The proposal provides $9 billion for hospitals that received a cut in 340B payments from 2018 through 2022. These will be distributed in lump sum payments. The list of institutions and their payment amounts are included in the proposed rule. Note interest is not being applied to these payments. Due to budget neutrality requirements, CMS proposes reducing future non-drug item and service payments by adjusting the Outpatient Prospective Payment System conversion factor by minus 0.5 percent starting in the calendar year 2025 until the full amount is offset, which CMS estimates will take 16 years.
Stakeholders, such as the American Hospital Association (AHA), are pleased with the solution of lump sum payments but have expressed disappointment that the agency will be clawing back dollars from hospitals, including rural sole community, cancer, and children’s hospitals. This is only a proposed rule, and potentially the agency could modify its proposal during the final rule process based on public feedback.
Other Payment-related Rules and Notices Released This Week
Other documents of interest released this week include:
CY 2024 Hospital Outpatient Prospective Payment System Proposed Rule
CY 2024 Home Health Prospective Payment System Proposed Rule
Proposed rule to revise the definition of short-term, limited-duration insurance (STLDI) (limits duration to three months or less)
First annual report on the No Surprises Act
Request for information (RFI) on billing and collections (e.g., medical credit cards and loans)
PAYMENT INNOVATION & QUALITY
CMS Seeks Input on Design of Future Payment Model with an Eye Towards Beneficiary Care Transitions and Engagement of Specialists
In releasing this RFI on July 14, 2023, the agency indicated that they are seeking greater alignment between Accountable Care Organizations and episode-based models. More specifically, they are seeking comments on care delivery and incentive structure as they relate to clinical episodes, participants, health equity, quality measurement/interoperability/multi-payor alignment, and payment methods and structure.
As the agency works towards transitioning away from fee-for-service and towards value-based care, integrating specialists has been an ongoing challenge. Over the years, stakeholders have urged the agency to develop models that engage specialists. In a strategic refresh of the Center for Medicare and Medicaid Innovation released in late 2022, CMS sought to address this by identifying increasing access to specialist care as an area of “critical focus.” Additionally, the new primary care model announced by the agency includes, for the first time, payment for specialists. While all positive developments for the specialist community, it is likely that stakeholders representing medical specialists will continue to urge the agency to do more. This RFI is a vehicle to communicate that message and propose potential options for the agency.
The RFI was issued with a 30-day comment period. Comments will be used in the development of future regulatory proposals and subregulatory guidance.
Report Finds Lack of Data to Measure Health Equity Impact of Medicare Payment Models
This week CMS issued an evaluation of 17 payment models to measure the models’ impact on health equity.
In a 2021 strategy refresh, the agency had incorporated health equity as a focus area for models, but prior to 2021, models did not have a specific health equity focus. The report concluded that limitations in data collection and model design made it difficult to assess the impact of health equity. The authors noted that health equity is now considered at the inception of model design, the agency is working on improving data collection as it relates to health equity issues, and there is an increased focus on recruiting beneficiaries from underserved populations. These actions may prove to help the agency draw more robust conclusions in the future.
CODING
Agenda Released for September 2023 CPT Editorial Panel Meeting
The CPT Editorial Panel, the entity responsible for maintaining the CPT code set, meets three times a year (February, May, and September).
The public agenda for their September 2023 meeting lists the code application names, code(s) affected, and a description of the request. Members of the public can review and submit comments on code change proposals through the Interested Party request process. Category I codes approved at this meeting are generally next reviewed at the January 2024 meeting of the American Medical Association (AMA) RVS Update Committee (RUC) to develop code valuation recommendations that are submitted to CMS. The January 2024 RUC meeting is the final meeting for the 2025 CPT Book and 2025 Medicare Physician Fee Schedule cycle.
AMA Releases Guidance on the Use of Modifier 25
This document is the result of a resolution passed at the June 2023 AMA Annual Meeting. It describes the appropriate use of the modifier and guidance on challenging payer denials.
The use of modifier 25, which is appended to an evaluation and management code to describe a separately identifiable E/M service on the same as a procedure or other service, has long been scrutinized by Medicare and other payers. Most recently, CIGNA announced it was going to require the submission of office notes when modifier 25 was appended to CPT codes 99212-99215. After significant pushback from the provider community, CIGNA announced it was delaying the implementation.
Report Finds Length of Clinical Notes Have Increased, but Time Spent Has Decreased (Slightly)
A recent report by Epic found that average note length (measured by characters) across all clinical notes has increased by 8.1% from May 2020 to April 2023. At the same time, the authors found that the average time spent writing notes decreased by 11.1% over this same period, from an average of 5.4 minutes per note to 4.8 minutes per note. A relationship between providers who used “copy and paste” features of their electronic health record (EHR) was associated with longer notes.
Despite this slight reduction in time spent on clinical notes, other growing administrative practice burdens also compete for clinicians’ time for patient care. According to the Medscape Physician Compensation Report for 2023, physicians spend an average of 15.5 hours per week on paperwork and administration.
COVERAGE
An Update on Lequembi Coverage and PET Scans; Other Medicare Coverage News
Last week after full, traditional approval of the drug by the Food and Drug Association, CMS announced broader coverage of Lequembi, a treatment to slow the progression of Alzheimer’s disease. What was absent from the announcement was coverage for beta-amyloid PET imaging, an important tool in both the diagnosis of Alzheimer’s Disease but also monitoring the effectiveness of treatment.
This week there have been multiple trade press reports (including STAT News and Inside Health Policy) that the agency is thinking about revising coverage for beta-amyloid PET imaging in light of their decision on Lequembi. Specifically it has been reported that “Medicare covers one positron emission tomography (PET) scan per lifetime to detect amyloid beta plaque, but the agency is currently reconsidering that and intends to issue a proposed NCD [National Coverage Decision] CMS will next consider coverage of PET scans.”
In other Medicare coverage news this week, CMS announced they were soliciting comments for coverage of PrEP using antiretrovirals for persons at high risk of HIV acquisition. In December 2022, the United States Preventive Services Task Force published a draft recommendation with a grade A for prescribing PrEP with effective antiretroviral therapy to persons who are at increased risk of HIV acquisition to decrease the risk of acquiring HIV infection. Public comments on this proposed decision memo are due August 11, 2023.
CMS has also opened a 30-day comment period on a proposed decision memo related to coverage of percutaneous transluminal angioplasty (PTA) of the carotid artery concurrent with stenting.
For more information and questions, please contact:
Sheila Madhani, MA, MPH
Madhani Healthcare Consulting, LLC
Email: smadhani@madhani-health.com
www.madhani-health.com
Tel: (202) 679-2977