2023 was certainly an eventful year for both Congress and federal agencies such as the Centers for Medicare and Medicaid Services (CMS). However, much of their policy efforts from 2023 remain unfinished which sets up 2024 as a year for more legislative and regulatory activity.
This being an election year makes it difficult to predict exactly how productive Congress and the federal agencies will be, as many important decisions will be held until the end of the year after the results of the election. While we do not know the exact outcome, we know many of the top policy priorities for both Congress and CMS.
- Medicare Payments to Physicians
Breaking the cycle of low Medicare reimbursement rates is the top advocacy priority for physicians. This battle is being waged on two fronts. The first is to prevent immediate cuts from taking effect due to Congressional policy decisions and CMS’ budget neutrality requirement for the PFS. The second is fighting for long-term, sustainable improvements to how Medicare adjusts reimbursement rates for physicians and allied health professionals.
Congress began the year with several colleagues in both the House and the Senate attempting to pass legislation to mitigate a 3.37 percent reduction to the 2024 Medicare Physician Fee Schedule (PFS) Conversion Factor (CF). On Thursday, January 18 Congress passed a continuing resolution to avert a government shutdown by passing the budget, however, did not address or include the proposed legislation to protect radiologists and other physicians from this 2024 finalized Medicare pay cut. Physician advocacy groups criticized the decision while holding out hope that Congress could remedy the nearly 3.4% cut to the conversion factor at some future point.
By the end of the year, Congress must also act to prevent an additional four percent reduction to Medicare payments for 2025 which is caused by Congress’ failure to waive the statutory PAYGO requirement for the American Rescue Plan Act (ARPA) of 2021. PAYGO requires Congress to offset the cost of bills that add to the federal budget deficit. Congress almost always waives this requirement but puzzlingly did not waive it for the ARPA. In 2022, Congress passed legislation to prevent this four percent cut from taking effect until 2025. Congress will need to act again before the end of the year to prevent it from taking effect.
These cuts must be viewed within the context of the broader Medicare reimbursement environment. For example, inflation has outpaced updates to the PFS CF by over 20 percent since 2010. Additionally, providers have fewer opportunities to earn positive payment adjustments with the expiration of the MIPS exceptional performance threshold bonus funding.
In response to these challenges, there is growing momentum behind various legislative proposals to sustainably reform how Medicare adjusts reimbursement rates physicians. One such proposal, H.R. 2474, would annually adjust the PFS CF by MEI. This adjustment would not be subject to budget neutrality. The immense cost of this bill makes is unlikely to pass Congress. Another bill would give CMS more flexibility regarding budget neutrality adjustments and limit annual changes to the PFS CF at 2.5 percent, up or down.
Congress proactively extended some COVID-19-era Medicare telehealth policies through 2024. These policies included removing the originating site and geographic requirement, expanding the list of practitioners who are eligible to bill Medicare for telehealth, and allowing audio-only telehealth services for some mental health and addiction services. Extending these provisions, permanently or temporarily, will be a bipartisan priority during the new year. While an extension is expected, Congress will try to offset the cost of these measures with spending reductions elsewhere across the federal government.
- Medicare Advantage
In 2023, enrollment in Medicare Advantage (MA) plans surpassed Traditional Medicare. 30.8 million Americans are enrolled in an MA plan, amounting to 51% of the eligible Medicare population. As enrollment in MA plans has increased, bipartisan scrutiny on the plans’ prior authorization rules, slow reimbursement timelines, unfair contract negotiations with providers, and the plans’ marketing practices. Bipartisan proposals to standardize prior authorization and address overpayments to MA plans by reforming the risk assessment process could receive some momentum in the new year.
- Patient Medical Debt
Federal agencies are paying increased attention to the prevalence of patient medical debt. The Consumer Financial Protection Bureau (CFPB) has issued several reports on patient medical debt. Late last year, the CFPB announced its intent to propose regulations on patient medical debt. The announcement included an outline of policies under consideration for the proposed rule. The outline shows the CFPB is focusing on how debt collection agencies are regulated under the Fair Debt Collections Practices Act can attempt to collect patient medical debt and how medical debt is treated on credit reports. The CFPB is expected to issue its proposed rule this year.
- Price Transparency and Site Neutral Payments
Congress is emphasizing price transparency and site-neutral payments to help reduce healthcare spending and potentially offset the cost of other policies. These policies were featured in bills such as the House’s Lower Costs, More Transparency Act and the Senate’s Bipartisan Primary Care and Healthcare Workforce Act. Both bills reauthorize funding for primary care clinician training programs. This funding is offset by the savings generated from additional price transparency and site-neutral payments.
ADVOCATE will share additional information with clients and friends as it becomes available on this and other Federal Health Policies.
Kirk Reinitz, President