CMS Proposal for 2024 Sends Physician Fees Further Into The Tank
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The pre-publication of the proposed Medicare Physician Fee Schedule (here) for calendar year 2024 continues a downward trend in payment for professional services, a 20% reduction in constant dollars during the past decade. The proposed rule, at 2,033 pages, contains other important changes in outpatient (Part B) rules, and will be published in the Federal Register August 7. The big news for physicians is further reason to aggregate in large groups, sell to corporate interests, or be acquired by hospital and health systems.
A CMS “fact sheet” (here) notes that “Overall payment rates under the PFS are proposed to be reduced by 1.25% in CY 2024 compared to CY 2023 . . . The proposed CY 2024 PFS conversion factor is $32.75, a decrease of $1.14 (or 3.34%) from the current CY 2023 conversion factor of $33.89.” (Conversion factors translate RVU or relative value unit scores to dollars.) An add-on payment will attempt to “recognize the resource costs associated with evaluation and management visits for primary care and longitudinal care of complex patients.”
CMS notes additional benefits, including: “For CY 2024, CMS is proposing to make payment when practitioners train and involve caregivers to support patients with certain diseases or illnesses (e.g., dementia) in carrying out a treatment plan. We are proposing to pay for these services when furnished by a physician or a non-physician practitioner (nurse practitioners, clinical nurse specialists, certified nurse-midwives, physician assistants, and clinical psychologists) or therapist (physical therapist, occupational therapist, or speech language pathologist) under an individualized treatment plan or therapy plan of care.”
Outpatient Payment Under Part B for New Providers and Services
CMS says, “Community Health Integration (CHI) and Principal Illness Navigation (PIN) services involve a person-centered assessment to better understand the patient’s life story, care coordination, contextualizing health education, building patient self-advocacy skills, health system navigation, facilitating behavioral change, providing social and emotional support, and facilitating access to community-based social services to address unmet social determinants of health (SDOH) needs.”
Also, “For CY 2024, we [add] Medicare Part B coverage and payment under the Medicare Physician Fee Schedule for the services of marriage and family therapists (MFTs) and mental health counselors (MHCs) when billed by these professionals.” Numerous other provisions affecting outpatient care are included in the proposed rule. In its press release on the proposal, CMS contends that the “CMS Physician Payment Rule Advances Health Equity.”
Ambulatory Surgery Center Rates Increase in PFS 2024 Proposal, Still Lag Hospital Outpatient Surgery
Becker’s reports (here) that ambulatory surgery center payment will increase, but still significantly lag payments to Hospital Outpatient Departments (HOPD) for the same procedures. “CMS proposed a 3 percent inflation update factor for both ASCs and hospital outpatient departments next year, and applied a 0.2 percentage point productivity reduction, as required by the ACA, to arrive at the 2.8 percent pay increase. The conversion factor for ASCs is $53.397, compared to HOPDs at $87.488.”
Comments on the proposed rule are due September 11. Early analysis and comment here and here.
HOSPITALS, ASCs, SKILLED NURSING AND OTHER HEALTH CARE FACILITIES
KaufmanHall Flash Report Shows Hospitals Still in Recovery
The June report (here) found that while hospitals’ operating margins moved back into positive territory in May, they continue well below historical norms. On volume, “discharges, emergency department visits and operating room minutes all climbed, although very modestly on a year-to-date basis. Revenue from outpatient care is increasing at a much greater rate than revenue from inpatient care, and, while labor costs remain significant, expenses in May were well below comparable levels from May 2022.”
Becker’s reports on some very profitable health systems (here). A report in JAMA (here) examines the impact of COVID-19 on hospital finances. Ge Bai and colleagues in MedPage Today (here) call for re-examination of physician-owned hospitals. CNN reports (here) on continued scrutiny of tax exempt hospital charitable care policies.
AHRQ on Care Transitions
The Agency for Health Care Research and Quality publishes (here) a new paper on diagnostic error in care transitions, what goes wrong. “Diagnostic error can be a blind spot in the patient safety field, according to the National Academy of Medicine. An underrecognized and high-risk moment in patients’ diagnostic journeys can occur at key intra and peri hospital transitions of care: From the emergency department (ED) to the ward, From the operating room (OR) to the postoperative area, From the intensive care unit (ICU) to the ward, and From the inpatient to the outpatient context.”
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
Medicaid Unwinding
The State Network (RWJ supported) reports (here) that State reporting to monitor the unwinding of the Medicaid Continuous Coverage Requirement has a high degree of variability. “To date, 32 states and the District of Columbia have publicly published unwinding data in some format . . . The majority of those states (18) are releasing state unwinding data online in either an interactive dashboard or static pdf format. In most cases state Medicaid departments are releasing those data, although some State-Based Marketplaces (SBMs) are also publishing unwinding data.”
Axios reports, “The unwinding of the Medicaid continuous coverage requirement represents the largest nationwide coverage transition since the Affordable Care Act, with significant health equity implications.” The California “unwinding” is featured (here) in The New York Times, where “up to 2.8 million Californians could be kicked off the rolls.”
DRUGS & DEVICES
Kaiser Family Foundation Reports on Potential Savings From Medicare Drug Negotiation, From a Limited Number of Drugs
Ten prescription drugs accounted for nearly one-quarter of gross Medicare drug spending in 2021 — and accounted for more than half of the increase in Part D drug spending from 2018 to 2021, according to a new KFF analysis, (here) as reported in Axios. “The findings underscore the potential impact of negotiating prices for a limited number of big-ticket drugs under the Inflation Reduction Act . . . A comparatively small number of drugs accounted for an outsized share of the $216 billion in total gross Part D drug spending in 2021. Bristol Myers Squibb's blood thinner Eliquis topped the list, accounting for a quarter of gross spending on Part D drugs in 2021, or $12.6 billion.”
Axios also reported that “Congressional scorekeepers project the negotiations could yield nearly $100 billion in savings through 2031. The government hasn't yet identified which 10 Part D drugs will be subject to price negotiations for 2026, and will weigh updated spending figures and other factors . . . The pharmaceutical industry has filed multiple lawsuits challenging the negotiations, increasing the odds that the implementation of the law will be delayed. The U.S. Chamber of Commerce on Wednesday filed a motion for a preliminary injunction (here) to halt the process.”
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