/ en Thu, 31 Jul 2025 02:45:39 -0500 Tue, 15 Jul 25 17:09:53 -0500 /advisory/2025-07-15-cms-issues-cy-2026-physician-fee-schedule-proposed-rule <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) July 14 issued a <a href="https://public-inspection.federalregister.gov/2025-13271.pdf">proposed rule</a> that would update physician fee schedule (PFS) payments for calendar year (CY) 2026. The rule also includes proposals related to the Medicare Shared Savings Program (MSSP) and the Quality Payment Program (QPP), both of which were created by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. It also would create a new mandatory payment model focused on specialists’ care for beneficiaries with heart failure and low back pain. </p><p> CMS will accept comments on the proposed rule through Sept. 12.</p><div class="panel module-typeC"><div class="panel-heading"><p><strong>KEY HIGHLIGHTS</strong></p><p>CMS’ proposed policies would:</p><ul><li>Implement two separate conversion factors: one for alternative payment model (APM) qualifying participants (QPs) and one for physicians and practitioners who are not QPs.<ul><li>The APM QP conversion factor would increase by 3.83% in CY 2026 as compared to CY 2025.</li><li>The non-QP conversion factor would increase by 3.62% in CY 2026 as compared to CY 2025.</li></ul></li><li>Make an efficiency adjustment of -2.5% to certain work relative value units (RVUs).</li><li>Modify the practice expense (PE) methodology to decrease facility PE RVUs and increase non-facility PE RVUs.</li><li>Extend some, but not all, telehealth waivers, either permanently or through 2026.</li><li>Create a new claims-based methodology to remove units of drugs purchased under the 340B program for the purposes of calculating Medicare drug inflation rebates. The agency is also proposing to create a 340B claims data repository allowing voluntary data submission by 340B providers to potentially use for the same purpose.</li><li>Create a new mandatory payment model, the Ambulatory Specialty Model (ASM), focused on specialists who care for beneficiaries with heart failure and low back pain, to begin Jan. 1, 2027, and run for five years.</li><li>Make several updates to the Medicare Share Savings Programs policies on performance and beneficiary assignment methodology.</li><li>Establish a MIPS performance threshold of 75 points for the CY 2026 performance period through the CY 2028 performance period, as well as adopt six new MIPS Value Pathways and make modifications to performance categories under the Quality Payment Program.</li></ul></div></div><h2>AHA TAKE</h2><p>The AHA is pleased that CMS, as directed by Congress, is proposing a positive payment update for physicians, which will be the first in several years. However, we will be closely evaluating the proposed efficiency adjustment and changes to PE RVUs, which both redistribute payments and may inappropriately disadvantage certain providers, including physicians who are largely hospital-based. </p><p>We also thank CMS for its proposal to extend or make permanent certain telehealth flexibilities, such as permanently removing frequency limitations for subsequent inpatient visits, nursing facility visits and critical care consultations. However, we were disappointed the agency did not propose extending a waiver that allows providers to report practice addresses instead of home addresses when they perform telehealth services from their home. </p><p>We appreciate the recognition of the complexity of identifying Medicare Part D drug units purchased under the 340B drug pricing program. As we review the agency’s proposals in more detail, we caution against any approach that would add unnecessary burden on 340B hospitals or would allow sensitive 340B data to be used outside the scope of the Medicare drug inflation rebate program to diminish the value of the program to 340B hospitals and their patients.</p><p>Finally, while we support moving towards more coordinated and accountable care through APMs, we are concerned about CMS’ proposal to create another mandatory model, as many physicians may not be in a financial position to support the investments necessary to transition to mandatory models.</p><p>Highlights of the PFS rule follow.</p><h2>CY 2026 PROPOSED PAYMENT UPDATE</h2><p>As required by law, beginning in CY 2026, CMS proposes implementing two separate conversion factors: one for APM QPs and one for physicians and practitioners who are not QPs. The rule would increase the APM QP conversion factor by 3.83% in CY 2026 as compared to CY 2025. It would increase the non-QP conversion factor by 3.62% in CY 2026 as compared to CY 2025. These updates include statutory updates of 0.75% and 0.25% for the APM QP and non-QP factors, respectively, another statutory update of 2.5% as required by the One Big Beautiful Bill Act and an increase of 0.55% that CMS states is necessary to account for proposed changes in work RVUs (described below).</p><h3>Efficiency Adjustment</h3><p>CMS proposes an efficiency adjustment to the work RVUs. It states that its proposal is based on an assumption that both the provider’s time directly providing the service to a patient as well as their work intensity would decrease as they develop expertise in performing the service. The agency expects non-time-based codes, such as codes describing procedures, radiology services and diagnostic tests, to become more efficient as they become more common, professionals gain more experience, technology is improved and other operational improvements (including but not limited to enhancements in procedural workflows) are implemented.</p><p>To calculate the efficiency adjustment, CMS proposes using the Medicare Economic Index (MEI) productivity adjustment. This adjustment reflects the most recent historical estimate of the 10-year moving average growth of private nonfarm business total factor productivity, as calculated by the Bureau of Labor Statistics. It is substantively similar to the productivity adjustment used in other Medicare payment systems, such as the inpatient prospective payment system (PPS) and outpatient PPS.</p><p>For CY 2026, CMS would apply the efficiency adjustment using a look-back period of five years. This methodology yields a proposed efficiency adjustment of -2.5%, which will be updated in the final rule. The agency states that, generally, specialties that bill more often for timed codes (such as family practice, clinical psychologists, clinical social workers, geriatrics and psychiatry) would see an increase in RVUs, while specialties that bill more often for procedures, diagnostic imaging and radiology services (such as radiation oncology, radiology, and some surgical specialties) would see a decrease in RVUs. That said, CMS estimates that almost all specialties would experience no more than 1% increase or decrease in RVUs as a result of this proposed policy, although the effect on individual services may be greater. It would be implemented in a budget neutral manner overall, however, and there would be a net increase to the conversion factor because of its implementation. </p><p><u></u></p><h2>Practice Expense Methodology</h2><p>CMS states that over the past two decades or so, there has been a steady decline in the percentage of physicians working in private practice, with a corresponding rise in physician employment by hospitals, as well as growth in the percentage of physicians who practice exclusively, or almost exclusively, in the facility setting. When the PFS was established, the methodology for allocating indirect PE was based in part on an assumption that the physician maintained an office-based practice while also practicing in a facility setting. However, CMS is concerned that this methodology may now overstate the indirect costs incurred by facility-based physicians.</p><p>Beginning in CY 2026, for each service valued in the facility setting under the PFS, CMS proposes to reduce the portion of the facility PE RVUs allocated based on work RVUs to half the amount allocated to non-facility (office-based) PE RVUs. The agency states that specialties that practice primarily in the facility setting would see a decrease in PE RVUs as a result of this redistribution. Specialties that perform services primarily in the non-facility (office-based) setting would see an increase in PE RVUs.</p><h2>Use of Outpatient PPS Data for PFS Rate-setting</h2><p><u> </u></p><p>For several types of PFS services, CMS proposes deviating from its historic use of American Medical Association survey data and instead using auditable, routinely updated hospital data. Specifically, for CY 2026, the agency proposes to:</p><ul><li>Use the relationship between outpatient PPS ambulatory payment classification payment rates to establish PE RVUs for radiation oncology treatment delivery and superficial radiation treatment services.</li><li>Use outpatient PPS cost data to establish the value for the PE portion of remote physiologic monitoring because it believes that these cost data are more accurate than the PE inputs currently used.</li><li>Use hospital outpatient utilization patterns to set payment rates for three categories of skin substitutes.</li></ul><h2>TELEHEALTH SERVICES</h2><p><strong>Medicare Telehealth Services List</strong></p><p>CMS proposes changing its review process for the Medicare Telehealth Services List by removing the distinction between provisional and permanent services. It also would limit its review to whether the service can be furnished using an interactive, two-way audio/video telecommunications system.</p><p><strong>Telehealth Waivers</strong></p><p>The proposed rule would make changes to several telehealth waivers, including:</p><ul><li>Permanently removing frequency limitations for subsequent inpatient visits, nursing facility visits and critical care consultations.</li><li>Permanently adopting a definition of direct supervision to include virtual presence via audio/video real-time communications technology.</li><li>Extending the ability for federally qualified health centers and rural health clinics to bill telehealth services through Dec. 31, 2026.</li></ul><p>CMS does not appear to address its prior waiver that allowed providers to report practice addresses instead of home addresses when they perform services from their home. In addition, for services provided in metropolitan statistical areas (MSAs), it does not propose to continue to allow virtual supervision of residents when the service is performed virtually across teaching settings. Instead, this would only be allowed for services provided in non-MSAs. </p><h2>MEDICARE PRESCRIPTION DRUG INFLATION REBATE PROGRAM</h2><p>CMS proposes new methodologies to calculate units of Medicare Part D drugs purchased under the 340B drug pricing program that must be excluded from the calculation of Medicare inflation rebates starting on Jan. 1, 2026, as required under the Inflation Reduction Act of 2022. The agency proposes a claims-based methodology that would determine which Part D drug units are 340B-eligible for exclusion from the inflation rebate calculation and solicits comments on two such methodologies: a prescriber-pharmacy methodology and a beneficiary-pharmacy methodology.  One method assumes that any drug that is prescribed by a provider that is affiliated with a 340B provider and is dispensed by a 340B retail pharmacy is a 340B drug. The other assumes that any drug prescribed to a patient of a 340B provider and is dispensed by a 340B retail pharmacy is a 340B drug. The agency notes that these methodologies may overestimate the number of 340B units for exclusion from the inflation rebate calculation.</p><p>As a potential future alternative to the claims-based methodology, CMS proposes establishing a claims data repository to receive voluntary submission from 340B covered entities of certain Part D claims data elements to identify which drug units are 340B-eligible. The agency has issued an Information Collection Request alongside the proposed rule that details the format and process of submitting data elements to the repository.</p><p>The agency anticipates the repository would go live in Fall 2026 with the goal of testing the usability of a 340B repository in identifying and excluding 340B drug units in the calculation of Medicare Part D inflation rebates. The agency encourages all 340B covered entities to participate in the voluntary submission process and notes that it may require mandatory reporting in future rulemaking.</p><h2>AMBULATORY SPECIALTY MODEL</h2><p>CMS proposes creating the ASM, which would focus on low back pain and congestive heart failure. ASM would begin on Jan. 1, 2027, and run for five performance years, through Dec. 31, 2031.</p><p>ASM would include specialists who frequently treat low back pain or heart failure, practice within selected core-based statistical areas or metropolitan divisions, and have historically treated at least 20 fee-for-service (FFS) Medicare patients with low back pain or 20 FFS Medicare patients with heart failure over a 12-month period. Physicians would be assessed individually, not at the practice level. Low back pain specialists would include those practicing in anesthesiology, pain management, interventional pain management, neurosurgery, orthopedic surgery, and physical medicine and rehabilitation. Heart failure specialists would include those practicing in cardiology.</p><p>ASM participants would be assessed across four categories: quality, cost, care improvement activities and improving interoperability. Their scores across these categories would determine whether they receive positive, neutral or negative payment adjustments on future Medicare Part B claims for covered services. In the first payment year, these adjustments would range from -9% to +9%. All participants would be subject to this risk. Total positive adjustments for high performers would not exceed the total negative adjustments for low performers.</p><p><strong>BEHAVIORAL HEALTH SERVICES</strong></p><p>CMS proposes updates intended to enhance integration of behavioral health into primary care. First, the agency clarifies that marriage and family therapists and mental health counselors can bill Medicare directly for Community Health Integration and Principal Illness Navigation services. Next, CMS proposes creating add-on codes for Advanced Primary Care Management services that complement previously established Behavioral Health Integration or psychiatric Collaborative Care Model services. Lastly, CMS proposes deleting the HCPCS code finalized in the CY 2024 PFS final rule that describes social determinants of health risk assessment and altering language throughout the regulations to refer to “upstream drivers” of health rather than “social determinants.”</p><p>The agency also proposes updates to previously established payment codes for services provided using digital mental health treatment (DMHT) devices, including expanding payment for use of DMHT for attention deficit hyperactivity disorder. CMS seeks comments on other ways to enhance the use of digital tools, such as those used to maintain or encourage a healthy lifestyle; administration of an FDA-authorized eye-tracking technology in the diagnosis of autism spectrum disorder on pediatric patients; and payment policies for the use of software-based clinical decision support technologies (referred to Software as a Service, or SaaS).</p><p><strong>MEDICARE SHARED SAVINGS PROGRAM</strong></p><p>CMS proposes several changes to the Shared Savings Program’s policies regarding performance, financial methodology, beneficiary assignment methodology, participation options and availability of new payment options (among other changes) beginning with performance year 2027. One such change would be to reduce the time an accountable care organization (ACO) can participate in a one-sided model of the BASIC track from seven to five years to encourage participation in two-sided risk models. CMS also would modify eligibility and financial reconciliation requirements related to the statutory requirement that ACOs have at least 5,000 assigned Medicare FFS beneficiaries; the agency believes these changes would allow for flexibility in the minimum number of assigned beneficiaries required in benchmark years.</p><p>CMS also proposes updates to the quality performance standards and other quality reporting requirements in the program. The agency would revise the definition of a beneficiary eligible for Medicare Clinical Quality Measures to overlap more with the beneficiaries assignable to an ACO. CMS proposes to remove the health equity adjustment applied to an ACO’s quality score beginning with performance year 2025 and remove the screening for social drivers of health measure from the APP Plus quality measure set. The agency also would require Consumer Assessment of Healthcare Providers and Systems for Merit-based Incentive Payment System (MIPS) survey vendors to offer the survey via web mode (in addition to mail and phone) beginning in 2027. CMS also proposes to expand the application of extreme and uncontrollable circumstances policies to ACOs affected by cyberattacks.</p><p><strong>QUALITY PAYMENT PROGRAM</strong></p><p>CMS proposes several changes to further the goal of phasing out MIPS in favor of participation in specialty-specific MIPS Value Pathways (MVPs). Several of these are administrative, including a new requirement for the MVP group registration process to include a multispecialty self-attestation requirement and the maintenance of the MVP group reporting option for multispecialty groups with a small practice designation.</p><p>The agency also makes proposals to support clinicians in data collection and reporting. First, CMS would update the MVP inventory to stratify quality measures by clinical conditions and/or episodes of care to help clinicians select the most clinically relevant measures. Next, the agency would allow qualified clinical data registries additional time (i.e., through the CY 2025 performance period) to support finalized MVPs.</p><p>The agency proposes six new MVPs around the following topics:</p><ul><li>Diagnostic radiology.</li><li>Interventional radiology.</li><li>Neuropsychology.</li><li>Pathology.</li><li>Podiatry.</li><li>Vascular surgery.</li></ul><p>CMS also proposes modifications to the following performance categories:</p><p><strong>Quality Performance.</strong><em> </em>CMS proposes establishing an updated inventory of 190 MIPS measures. The agency would remove 10 measures that are topped out, no longer aligned with clinical guidelines, no longer maintained by measure stewards or focused on process. CMS would adopt five new MIPS electronic clinical quality measures as well as measures that focus on outcomes. CMS also proposes substantive changes to 42 MIPS quality measures.</p><p><strong>Cost Performance.</strong> CMS proposes to modify the total per capita cost measure beginning with the CY 2026 performance period. The agency also proposes updating the operational list of care episodes and patient condition groups and codes to reflect recent coding changes. Finally, CMS proposes adopting, beginning with the CY 2026 performance period, an informational-only feedback period for MIPS cost measures with a lookback period of two years.</p><p><strong>Improvement Activities.</strong> In alignment with the administration’s focus on preventive care and well-being, CMS proposes adding a new “Advancing Health and Wellness” subcategory within the improvement activities performance category. Moreover, CMS will add three new improvement activities into the Population Management and Patient Safety and Practice Assessment subcategories and remove the Achieving Health Equity subcategory.</p><p><strong>Promoting Interoperability. </strong>CMS proposes modifying two measures in this category and adopting one new optional bonus measure related to public health reporting. The agency also proposes measure suppression and exclusion processes and seeks comments on other measures in this category.</p><p>The agency would continue using the CY 2017 performance period (2019 MIPS payment year) to establish the performance threshold, which would be 75 points for the CY 2026 performance period (2028 MIPS payment year) through the CY 2028 performance period (2030 MIPS payment year).</p><p>Finally, CMS seeks comments on several topics related to digital quality measurement in MIPS, specifically the use of Fast Healthcare Interoperability Resource (FHIR)-based quality reporting.</p><h2>REQUEST FOR INFORMATION: EXECUTIVE ORDER 14192 ‘UNLEASHING PROSPERITY THROUGH DEREGULATION’</h2><p>On Jan. 31, 2025, President Trump issued Executive Order 14192, “Unleashing Prosperity Through Deregulation,” which states the administration’s policy to significantly reduce the private expenditures required to comply with federal regulations. Accordingly, CMS is soliciting public input on approaches and opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries and other interested parties participating in the Medicare program. CMS is <a href="https://www.cms.gov/medicare-regulatory-relief-rfi">collecting</a> responses and requests stakeholders submit comments through the provided web link.</p><h2>FURTHER QUESTIONS</h2><p>CMS will accept comments on the proposed rule through Sept. 12. The final rule will be published around Nov. 1. The policies and payment rates will generally take effect Jan. 1, 2026.</p><p>If you have further questions, contact Joanna Hiatt Kim, AHA’s vice president of payment policy, at <a href="mailto:jkim@aha.org">jkim@aha.org</a>. </p></div><div class="col-md-4"><a href="/system/files/media/file/2025/07/cms-issues-cy-2026-physician-fee-schedule-proposed-rule-advisory-7-15-2025.pdf" target="_blank" title="Click here to download the Regulatory Advisory: CMS Issues CY 2026 Physician Fee Schedule Proposed Rule PDF."><img src="/sites/default/files/2025-07/image-cms-issues-cy-2026-physician-fee-schedule-proposed-rule-advisory-7-15-2025-638-px.png" data-entity-uuid data-entity-type="file" alt="Regulatory Advisory: CMS Issues CY 2026 Physician Fee Schedule Proposed Rule Cover." width="NaN" height="NaN"></a></div></div></div> Tue, 15 Jul 2025 17:09:53 -0500 Physician Fee Schedule (PFS)/MACRA/QPP /news/headline/2025-07-14-cms-issues-cy-2026-physician-fee-schedule-proposed-rule <p>The Centers for Medicare & Medicaid Services July 14 released its calendar year 2026 <a href="https://www.federalregister.gov/public-inspection/2025-13271/medicare-and-medicaid-programs-calendar-year-2026-payment-policies-under-the-physician-fee-schedule" title="CMS pfs 2026">proposed rule</a> for the physician fee schedule. As required by law, beginning in CY 2026, CMS proposes to implement two separate conversion factors: one for qualifying alternative payment model participants and one for physicians and practitioners who are not qualified participants. The rule would increase the APM conversion factor by 3.83% in CY 2026 as compared to CY 2025. It would increase the non-conversion factor by 3.62% in CY 2026 as compared to CY 2025. These updates include statutory updates of 0.75% and 0.25% for the APM and non-factors, respectively, another update of 2.5% as required under the One Big Beautiful Bill Act, and 0.55% that CMS states is necessary to account for proposed changes in work relative value units.</p><p>CMS also proposes that, for CY 2026, it would make an efficiency adjustment to certain work RVUs of -2.5%. In addition, the agency is proposing significant updates to its practice expense methodology that it says will recognize greater indirect costs for practitioners in office-based settings compared to facility settings. It also proposes to utilize data from auditable, routinely updated hospital data to set relative rates and inform cost assumptions for some technical services paid under PFS. Specifically, for CY 2026, it proposes to use this data in setting rates for radiation treatment services, and for some remote monitoring services.</p><p>In addition, CMS proposes to permanently adopt its waiver defining direct supervision to include virtual presence via audio/video real-time communications technology. It also proposes to extend its waiver allowing federally qualified health centers and rural health clinics to bill for telehealth services through 2026. However, it does not propose to extend the waiver allowing teaching physicians to have a virtual presence for purposes of billing for services furnished involving residents in all teaching settings.</p><p>CMS also proposes a new claims-based methodology to remove units of drugs purchased under the 340B Drug Pricing Program for the purposes of calculating Medicare drug inflation rebates. The agency also proposes to create a 340B claims data repository allowing voluntary data submission by 340B providers to potentially use for the same purpose.</p><p>CMS also proposes to implement the Ambulatory Specialty Model, a mandatory payment model focused on specialty care for beneficiaries with heart failure and low back pain. It states that the model would include specialists who frequently treat low back pain or heart failure and aim to enhance the quality of care by improving upstream chronic disease management.</p><p>For the Quality Payment Program, CMS proposes to add a new Advancing Health and Wellness subcategory within the Improvement Activities category. The agency also proposes several updates to simplify and transform the Merit-based Incentive Payment System to facilitate a transition to mandatory participation in the MIPS Value Pathways in the future. CMS solicits comments on several topics, including ways to hone MVP coding and potential new and modified measures for the MIPS.</p><p>CMS also includes several proposals regarding the Medicare Shared Savings Program, including modifications to the eligibility and financial reconciliation requirements in order to increase the flexibility in the number of assigned beneficiaries in benchmark years. Among proposed changes to the quality performance standards and requirements, CMS would remove the health equity adjustment to the ACO quality score; expand the survey mode for the Consumer Assessment of Healthcare Providers and Systems survey to include web-based survey administration beginning in 2027; remove the Screening for Social Drivers of Health measure; and expand the Extreme and Uncontrollable Circumstances Exception to include cyberattacks.</p><p>CMS will accept comments on the proposed rule through Sept. 12. AHA members will receive a Regulatory Advisory with more details. </p> Mon, 14 Jul 2025 17:41:24 -0500 Physician Fee Schedule (PFS)/MACRA/QPP /news/headline/2025-06-13-medpac-releases-june-report-congress-medicare-and-health-care-delivery-system <p>The Medicare Payment Advisory Commission June 13 released its <a href="https://www.medpac.gov/wp-content/uploads/2025/06/Jun25_MedPAC_Report_To_Congress_SEC.pdf">June report</a> to Congress that outlines recommendations for hospital and other Medicare payment systems. Prior to the report, the AHA urged the commission to include recommendations on <a href="/lettercomment/2025-04-04-aha-comments-medpac-physician-fee-schedule-payment-recommendations">physician fee schedules</a> and <a href="/lettercomment/2025-02-28-aha-comments-medpac-rural-medicare-beneficiary-cost-sharing">reducing cost sharing for outpatient services at critical access hospitals</a>.</p> Fri, 13 Jun 2025 14:42:15 -0500 Physician Fee Schedule (PFS)/MACRA/QPP /news/headline/2025-04-04-aha-calls-medpac-act-physician-fee-schedule-payments-following-recommendations <p>The AHA today <a href="/lettercomment/2025-04-04-aha-comments-medpac-physician-fee-schedule-payment-recommendations">urged</a> the Medicare Payment Advisory Commission to take specific actions on physician fee schedule payments following recommendations the commission made during its March meeting. The AHA urged MedPAC to recommend a full inflationary update to physician payment instead of an update based on a portion of the Medicare Economic Index. Additionally, the AHA called for MedPAC to remove recommendations to update relative value unit calculations and urged the commission to reiterate its concerns about expiring alternative payment model incentive payments. <br> </p> Fri, 04 Apr 2025 16:02:02 -0500 Physician Fee Schedule (PFS)/MACRA/QPP /lettercomment/2025-04-04-aha-comments-medpac-physician-fee-schedule-payment-recommendations <p>April 4, 2025</p><p>Michael Chernew, Ph.D.<br>Chairman<br>Medicare Payment Advisory Commission<br>425 I Street, NW, Suite 701<br>Washington, D.C. 20001</p><p>Dear Chairman Chernew:</p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations; our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to share our comments regarding the Medicare Payment Advisory Commission’s (MedPAC’s) March meeting recommendations on physician fee schedule payments.</p><p>We appreciate the thoughtful discussions the Commission has had over the past three years regarding physician payments. This is a challenging issue, but one that is critical to address to ensure beneficiary access to quality primary care and specialty providers. Thus, given recent discussions at the March meeting, we urge MedPAC to:</p><ul><li><strong>Recommend a full inflationary update to physician payment instead of an update based on a portion of the</strong> <strong>Medicare Economic Index (MEI).</strong></li><li><strong>Remove recommendations to update relative value unit (RVU) calculations.</strong></li><li><strong>Reiterate its concerns about expiring alternative payment model (APM) incentive payments.</strong></li></ul><p>Detailed feedback on these recommendations is below.</p><h2>PHYSICIAN FEE SCHEDULE AND MEI RECOMMENDATION</h2><p>In the March meeting, commissioners reviewed a recommendation for Congress to replace the current law updates to the physician fee schedule with an annual update based on a portion of the growth in the MEI (e.g., MEI minus 1%). <strong>We value the commission’s continued focus on addressing the woeful inadequacy of physician payment. However,</strong> <strong>we are concerned that such an annual update is not sufficient to make up for the existing shortcomings in physician reimbursement.</strong> Addressing this issue is of utmost importance to ensure the continued provision of vital care to Medicare beneficiaries. As we have commented previously, updates to the physician fee schedule conversion factor have not kept pace with inflation.<sup>1,2</sup> Medicare’s conversion factor, which determines physician payment, declined by over 13% in real dollars from 2001 to 2024. The actual reduction when accounting for inflation is a staggering 29%. Continued decrements are unsustainable, particularly in light of the physician shortages the country is facing. <strong>Therefore, we continue to urge MedPAC to recommend a higher update to physician reimbursement that more fully accounts for inflation.</strong></p><h2>ACCURACY OF RELATIVE PAYMENT RATES RECOMMENDATION</h2><p>MedPAC also reviewed a recommendation for Congress to direct the secretary to improve the accuracy of relative payment rates by 1) updating cost data regularly and 2) ensuring that the methodology used to determine payment rates for different services reflects the settings in which clinicians practice medicine. <strong>We are encouraged that MedPAC is evaluating strategies to improve the accuracy of RVU calculations. However, we are concerned that the policy recommendations presented do not address the underlying issues with payment and may inappropriately penalize facility-based providers.</strong></p><p>For example, the recommendation to update cost data regularly (which would yield a rebased and revised MEI) does not address the overall issue of inadequate payment per RVU. Additionally, any updates to RVUs would cause a redistribution of payments based on physicians’ geography and specialty. <strong>As such, we urge MedPAC to further evaluate the potential redistributive effects of cost data updates, especially in light of physician shortages and pervasive underpayments.</strong></p><p>Moreover, the recommendation to revise the RVU methodology based on clinician setting could inappropriately penalize facility-based providers and potentially exacerbate the consolidation of physician practices by non-traditional providers. Unsustainable reimbursement has driven many physicians to pursue employment models that provide stable payment through salaries and enable physicians to focus on direct patient care. Cutting payment to facility-based providers would not solve these issues in physician reimbursement; rather, it would lead to decreases in access since hospitals may no longer be able to absorb additional reductions in reimbursement without cutting services. Indeed, hospitals already must subsidize inadequate payment to preserve access to care in communities, with recent data indicating that subsidies per physician have increased 5% in the last three years to over $306,000 (see figure 1 below)<sup>.3</sup></p><p><strong>Figure 1. Average Subsidy Per Physician</strong></p><p class="text-align-center"><img src="/sites/default/files/inline-images/image_55.png" data-entity-uuid="81dc2055-dec5-4391-9da3-0ea1782d0467" data-entity-type="file" alt="Figure 1 Image - Average Investment / Subsidy Per Physician " width="459" height="393"></p><p>Furthermore, decrements to facility-based providers will create a greater incentive for physicians to seek out employment from non-traditional providers. Of the physician acquisitions that occurred over the last 5 years, the majority have been acquired by private equity companies, other physician groups and health insurers. In fact, of the physician acquisition deals from 2019 to 2023, private equity-backed startups acquired 65% of physician practices, and insurers acquired 14% of practices in that same timeframe. This is compared to hospitals and health systems that only accounted for 6% of physician acquisition acquirers. <strong>Therefore, we oppose policy options to revise RVU methodology in ways that would decrease payment to facility-based providers.</strong></p><h2>ALTERNATIVE PAYMENT MODEL INCENTIVES</h2><p>Finally, we urge MedPAC to reiterate its concerns about the pending expiration of advanced APM incentive payments. While it has previously discussed incentives to support transition to value-based care, the absence of formal policy recommendations related to this issue may be misconstrued to mean that incentives are no longer needed. These payments continue to support providers’ transitions to value-based payment models and support the provision of non-fee-for-service programs like meal delivery programs, transportation services and care coordinators that promote population health.</p><p>We thank you for your consideration of our comments. Please contact me if you have questions or feel free to have a member of your team contact Shannon Wu, AHA’s director of payment policy, at <a href="mailto:swu@aha.org">swu@aha.org</a> or 202-626-2963.</p><p>Sincerely,</p><p>/s/</p><p>Ashley B. Thompson<br>Senior Vice President<br>Public Policy Analysis and Development</p><p>Cc: Paul Masi, M.P.P.<br>MedPAC Commissioners</p><p>____________________</p><p><sup>1</sup> <a href="/lettercomment/2024-12-09-aha-comments-medpac-re-physician-fee-schedule-payments-apm-incentives-and-medicare-advantage-network" target="_blank">/lettercomment/2024-12-09-aha-comments-medpac-re-physician-fee-schedule-payments-apm-incentives-and-medicare-advantage-network</a></p><p><sup>2</sup> <a href="/2025-01-10-aha-comments-advance-medpac-january-2025-meeting" target="_blank">/2025-01-10-aha-comments-advance-medpac-january-2025-meeting</a></p><p><sup>3</sup> <a href="https://www.kaufmanhall.com/insights/research-report/physician-flash-report-q4-2024-metrics" target="_blank" id="https://www.kaufmanhall.com/insights/research-report/physician-flash-report-q4-2024-metrics">https://www.kaufmanhall.com/insights/research-report/physician-flash-report-q4-2024-metrics</a></p><p><sup>4 </sup><a href="/system/files/media/file/2023/06/Private-Equity-and-Health-Insurers-Acquire-More-Physicians-than-Hospitals-Infographic.pdf" target="_blank" id="/system/files/media/file/2023/06/Private-Equity-and-Health-Insurers-Acquire-More-Physicians-than-Hospitals-Infographic.pdf">/system/files/media/file/2023/06/Private-Equity-and-Health-Insurers-Acquire-More-Physicians-than-Hospitals-Infographic.pdf</a></p> Fri, 04 Apr 2025 15:09:55 -0500 Physician Fee Schedule (PFS)/MACRA/QPP /lettercomment/2024-12-09-aha-comments-medpac-re-physician-fee-schedule-payments-apm-incentives-and-medicare-advantage-network <p>December 9, 2024</p><p> </p><p>Michael Chernew, Ph.D.<br>Chairman<br>Medicare Payment Advisory Commission<br>425 I Street, NW, Suite 701<br>Washington, D.C. 20001</p><p>Dear Chairman Chernew: </p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations; our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to share our comments regarding the Medicare Payment Advisory Commission (MedPAC) November meeting sessions related to physician fee schedule payments, advanced alternative payment model (A-APM) incentives and Medicare Advantage (MA) network adequacy.</p><p>In particular, we:</p><ul><li><strong>Directionally support updates to physician reimbursement that are tied to the Medicare Economic Index (MEI) but maintain that the discussed factor of MEI minus 1 is not nearly sufficient to make up for the existing shortcomings in physician reimbursement. </strong></li><li><strong>Oppose penalizing facility-based providers by reducing their reimbursement rates. Doing so is not only inappropriate, but also would create an even greater incentive for physicians to seek out employment from other entities, such as private equity firms and health insurers (which have acquired the vast majority of physician practices during the last five years)</strong>.</li><li><strong>Support an extension of the A-APM incentive payments.</strong></li><li><strong>Encourage the commission to examine the impact of the inadequate MA post-acute care network requirements on beneficiaries’ access to care.</strong></li></ul><p>Our detailed comments on these issues follow.</p> Mon, 09 Dec 2024 12:26:50 -0600 Physician Fee Schedule (PFS)/MACRA/QPP /special-bulletin/2024-11-04-special-bulletin-cms-issues-physician-fee-schedule-final-rule-cy-2025 <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) Nov. 1 issued a <a href="https://www.federalregister.gov/public-inspection/2024-25382/medicare-and-medicaid-programs-calendar-year-2025-payment-policies-under-the-physician-fee-schedule" target="_blank">final rule that will update physician fee schedule (PFS) payments</a> for calendar year (CY) 2025. The rule also includes policies related to the Medicare Shared Savings Program (MSSP) and the Quality Payment Program (QPP), both of which were created by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. Additionally, the rule includes policies related to the Medicare Prescription Drug Inflation Rebate Program and Medicare Parts A and B overpayment provisions of the Affordable Care Act.</p><div class="panel module-typeC"><div class="panel-heading"><h3 class="panel-title">Key Highlights</h3></div><div class="panel-body"><p>CMS’ policies will:</p><ul><li>Reduce the PFS conversion factor by 2.8% in CY 2024 compared to CY 2025, which reflects the expiration and removal of the 2.93% statutory payment increase for CY 2024, a 0.00% conversion factor update and a budget-neutrality adjustment.</li><li>Extend certain telehealth waivers through CY 2025, including the waiver allowing for reporting of enrolled practice addresses instead of home addresses when providers perform services from their homes.</li><li>Codify items originally outlined in the revised guidance documents for the Part B Drug Inflation Rebate Program and the Part D Drug Inflation Rebate Program, and create new policies for the inflation rebate program.</li><li>Revise the data reporting period and phase-in of payment reductions for clinical laboratory tests under the Clinical Laboratory Fee Schedule per statutory requirements.</li><li>Suspend the 60-day deadline for reporting and returning Medicare Parts A and B overpayments under certain circumstances to allow time for providers to investigate and calculate overpayment.</li><li>Exclude suspected anomalous spending from financial calculations for the MSSP.</li><li>Revise the MSSP quality measure set and streamline reporting options.</li><li>Add five new Merit-Based Incentive Payment System (MIPS) Value Pathways for CY 2025.</li></ul></div></div><h2>AHA Take</h2><p>The AHA is concerned that despite mounting physician shortages, rising inflation, supply chain shortages and higher input costs, CMS continues to cut the physician reimbursement conversion factor year over year. Indeed, this latest cut is coming on top of two decades of decreases in physician payments. Repeated cuts to physician reimbursement pose significant threats to patient access and provider financial stability, particularly for underserved communities.</p><p>The AHA is also disappointed that the agency did not provide additional flexibilities for good-faith investigations of Medicare Parts A and B overpayments, which may require additional time beyond six months. While we appreciate that CMS has provided some time for providers to conduct appropriate investigations of potential overpayments, the 180-day window for investigations may not be sufficient for large health care providers or for complex cases spanning multiple sites or calendar years.</p><p>We thank CMS for extending certain regulatory telehealth flexibilities through 2025. However, we urge CMS to work with Congress on extending statutory waivers. Without action, many of these critical waivers are scheduled to expire at the end of 2024, risking a telehealth “cliff” that will negatively impact patient access in all communities.</p><p>Finally, we are also pleased that CMS finalized policies to exclude suspected anomalous spending from financial calculations for MSSP, which will avoid penalizing accountable care organizations for such actions outside their control.</p><p>Highlights of the PFS final rule follow.</p><h2>CY 2025 Payment Update</h2><p>CMS finalizes its proposal to cut the conversion factor by 2.8% from the current $33.29 in CY 2024 to $32.35 in CY 2025. This update reflects several different factors: the expiration and removal of a 2.93% increase in the PFS conversion factor for CY 2024 <em>only,</em> which was provided by the Consolidated Appropriations Act (CAA) of 2023 and CAA of 2024; a 0% update factor as required by MACRA; and a budget-neutrality adjustment.</p><h3>Payment for Evaluation and Management Visits</h3><h3> </h3><h4>Add-on Outpatient/Office (O/O) Evaluation and Management (E/M) Complexity Code</h4><p>CMS finalizes updated guidance regarding the complexity add-on code (G2211) to account for intensity and complexity for O/O E/M visits. Specifically, CMS will allow payment of the O/O E/M visit complexity add-on code when the O/O E/M base code is reported by the same practitioner on the same day as an annual wellness visit, vaccine administration or any Medicare Part B preventive service furnished in the office or outpatient setting.</p><h4>Hospital Inpatient or Observation (I/O) E/M Add-on for Infectious Diseases</h4><p>For CY 2025, CMS finalized its proposal to add a new health care common procedure coding system (HCPCS) code (G0545) to describe the intensity and complexity inherent to I/O care associated with confirmed or suspected infectious disease performed by a physician with specialized training in infectious disease.</p><h3>Medicare Economic Index</h3><p>In CY 2023, CMS rebased and revised the Medicare Economic Index (MEI). Under the agency’s revised methodology, the portion of the MEI accounted for by practice expense increased, while the portions accounted for by physician work and malpractice decreased. The agency anticipated that these revised weights would not impact overall spending for PFS services but would impact payment distribution based on geography and specialty. As such, CMS delayed the rebased and revised MEI implementation. CMS again delays implementing the rebased and revised MEI beyond CY 2025.</p><h3>Changes to Payment for Medicare Telehealth Services</h3><h4>Medicare Telehealth Services List</h4><p>CMS received requests to “permanently” consider the HCPCS CPT codes currently included on the provisional Medicare Telehealth Services List for CY 2025. However, CMS states that it will not recategorize provisional codes as permanent until it can complete a comprehensive analysis of all provisional codes; as such, it expects to address recategorization in future rulemaking.</p><p>In addition, in a reversal of policies presented in the proposed rule, CMS does not add Home International Normalized Ratio Monitoring as a provisional telehealth service, and CMS maintains Radiation Treatment Management on the Medicare Telehealth List on a provisional basis. CMS also adds caregiver training services to the Medicare Telehealth List provisionally. Finally, CMS permanently adds Pre-exposure Prophylaxis (PrEP) for HIV as an approved telehealth service.</p><h4>Extensions of Certain Telehealth Waivers</h4><p>CMS finalizes its proposals to extend several telehealth waivers through 2025 including:</p><ul><li>Removing frequency limitations for subsequent care services in inpatient, nursing facility and critical care consultations.</li><li>Reporting of practice addresses instead of home addresses when providers perform services from their homes.</li><li>Billing of telehealth services by Federally Qualified Health Centers and Rural Health Clinics.</li><li>Definition of direct supervision to include virtual presence via audio/video real-time communications technology.</li><li>Virtual supervision of residents when the service is performed virtually across teaching settings (both metropolitan service areas and non-metropolitan service areas).</li></ul><p>CMS also permanently changes the definition of an interactive telecommunications system to include audio-only technology for any telehealth services delivered to the patient’s home when the patient is incapable of or does not consent to video technology use (when the home is an eligible originating site). CMS clarifies that no additional documentation, except for the appropriate modifier, is needed.</p><h3>Caregiver Training Services</h3><p>The agency finalizes proposals related to caregiver training services. Specifically, CMS finalizes code descriptors for three caregiver training codes (G0541, G0542 and G0543) and designated these as “sometimes therapy” services. This facilitates payment for caregiver training services for outpatient physical therapy, occupational therapy and speech-language pathology services.</p><h3>Request for Information on Services Addressing Health-related Social Needs</h3><p>In the proposed rule, CMS issued a request for information (RFI) for services addressing health-related social needs. In response to feedback from the RFI, CMS provides some clarification in the final rule on the definition of auxiliary personnel eligible to perform services incident to the billing practitioner’s professional services. Specifically, CMS clarifies that “certified or trained auxiliary personnel” can include clinical social workers.</p><p>In general, the agency will continue to review feedback on how Community Health Integration (CHI), Principal Illness Navigation (PIN), and Social Determinants of Health (SDOH) risk assessment services are currently being used and how these services could be improved in the future. The agency indicates that it will consider feedback for future rulemaking.</p><h3>Advanced Primary Care</h3><h4>Advanced Primary Care Management Services</h4><p>CMS finalizes three new bundled codes (G0556, G0557 and G0558) for Advanced Primary Care Management (APCM) services effective Jan. 1, 2025. The agency finalizes descriptors and levels of service as proposed (stratified based on the number of chronic conditions and risk factors as defined by Qualified Medicare Beneficiary status). CMS also finalizes overlap policies as proposed. Specifically, it will allow for concurrent billing of APCM services in conjunction with behavioral health integration (BHI), CHI, PIN and SDOH risk assessments.</p><h4>Advanced Primary Care RFI</h4><p>In the proposed rule, CMS sought input on hybrid payment models and how to update payment policies to incorporate advanced primary care services into Medicare. The agency states that it will consider feedback in future rulemaking and highlights some key areas of input from stakeholders, including recommendations to restrict APCM billing to accountable care organizations or total cost of care models, waive cost-sharing requirements and broaden data sources for determining hybrid payment rates.</p><h3>Cardiovascular Risk Assessment and Risk Management</h3><p>The agency finalizes a new HCPCS code (G0537) for the administration of a standardized, evidence-based Atherosclerotic Cardiovascular Disease (ASCVD) risk assessment and another (G0538) for ASCVD risk management services. Given feedback, CMS did not finalize the requirement for the ASCVD risk assessment to be performed on the same day as the associated E/M visit.</p><h3>Strategies for Improving Global Surgery Payment Accuracy</h3><p>CMS finalizes several proposals to improve global surgery payment accuracy. Specifically, beginning in 2025, modifier 54 will be required for all 90-day global surgical packages when a practitioner plans to furnish only the surgical procedure portion of the global package (including both formal and other transfers of care). The agency did not finalize changes regarding the use of modifier 55 and modifier 56 for CY 2025.</p><p>CMS also finalizes a new Post-operative Care Services Add-on code (G0559) for a global package provided by a practitioner who did not furnish the procedure.</p><h3>Behavioral Health Services</h3><p>CMS finalizes several provisions intended to advance payments for (and, in turn, expand access to) behavioral health services. These provisions include:</p><ul><li>A new standalone code to account for safety planning activities for patients at increased risk for suicide or overdose, billable in 20-minute increments. The agency originally proposed this as a one-time add-on code for E/M or psychotherapy services but adjusted the proposal in response to public comment.</li><li>A new monthly code representing a bundle of services (including phone calls) for post-discharge follow-up with patients who were discharged from the emergency department for a crisis episode.</li><li>Three new HCPCS codes for FDA-cleared digital mental health treatment devices used incident to professional services for behavioral health treatment.</li><li>Six new codes allowing clinical psychologists, licensed social workers, marriage and family therapists, and mental health counselors to bill for interprofessional consultations with other practitioners.</li></ul><p>In addition, CMS makes several updates to payments for services furnished by Opioid Treatment Programs (OTPs). Specifically, the agency makes permanent the ability for OTPs to conduct periodic assessments via telehealth, including audio-only phone calls when video is unavailable, as well as the ability to use audio/video communications to initiate treatment with methadone. The agency also adds payment for SDOH risk assessments conducted during intake and, in the final rule, includes more types of professionals who may conduct these assessments. CMS also finalizes payment for newly FDA-approved opioid agonist and antagonist medications. Finally, CMS clarifies that claims treatment provided by OTPs require a diagnosis of opioid use disorder specifically for payment; OTPs may provide treatment for patients with multiple diagnoses, which can be reflected on claims, but the OTP Medicare Part B benefit is specifically for opioid use disorder treatment.</p><h3>Electronic Prescribing for Controlled Substances for a Covered Part D Drug Under a Prescription Drug Plan or a Medicare Advantage Part D Plan</h3><p>In previous rulemaking, CMS adopted the requirement for all Schedule II-V controlled substances prescribed electronically under Part D to be prescribed using specific standards. In this rule, CMS finalizes an extension to the timeline for these prescriptions to be issued electronically for beneficiaries in long-term care facilities from Jan. 1, 2025, until Jan. 1, 2028.</p><h3>Clinical Laboratory Fee Schedule Phase-in of Payment Reductions</h3><p>Under regulations implementing the Protecting Access to Medicare Act, CMS required “applicable laboratories,” including certain physician office laboratories and hospital outreach laboratories, to collect the rates they were paid by private payers from Jan. 1, 2016, through June 30, 2016, (the data collection period) and report those rates to CMS between Jan. 1, 2017, and March 31, 2017, (the data reporting period). CMS calculated the weighted median private payer rate for each reported HCPCS code, and this became the clinical laboratory fee schedule (CLFS) payment amount effective Jan. 1, 2018, subject to the statutory provision that limited CLFS payment reductions to no more than 10% annually for 2018 through 2020.</p><p>The second data collection period was Jan. 1, 2019, through June 30, 2019. While the second data reporting period was originally Jan. 1, 2020, through March 31, 2020, Congress subsequently delayed the data reporting period several times. Most recently, the Continuing Appropriations and Extensions Act of 2025 (CAEA) delayed the data reporting period until Jan. 1, 2026, through March 31, 2026, but did not change the date of the second data collection period. The CAEA also limited the reduction in payment to 0% for 2025 and 15% for each year 2026 through 2028.</p><p>In the final rule, CMS conforms its regulations to the latest statutory amendments.</p><h3>Medicare Prescription Drug Inflation Rebate Program</h3><p>The Inflation Reduction Act of 2022 established requirements under which drug companies must pay inflation rebates to the government if they raise their prices for certain Part B and Part D drugs faster than the rate of general inflation. CMS finalizes policies originally outlined in the revised guidance documents for the Part B Drug Inflation Rebate Program and the Part D Drug Inflation Rebate Program, both published on Dec. 14, 2023. In addition, CMS finalizes new and revised policies for the inflation rebate program. These include:</p><ul><li>Exploring the establishment of a Medicare Part D claims data repository to identify and exclude Part D drugs purchased under the 340B drug pricing program starting Jan. 1, 2026. CMS will not pursue its proposed estimation methodology or a 340B claims modifier to identify Part D drugs purchased under the 340B program and will instead provide detailed policies and requirements of a claims data repository in future rulemaking.</li><li>Establishing the method and process for reconciliation of a rebate amount for rebate-eligible Part B and Part D drugs, including the circumstances that may trigger such a reconciliation.</li><li>Establishing a civil monetary penalty process when a drug company fails to pay the full rebate amount within the payment deadline.</li><li>Clarifying rebate calculations for rebate-eligible Part B and Part D drugs in specific circumstances, including exclusion of Part B units of single-dose container or single-use package drugs subject to discarded drug refunds.</li></ul><h3>Drugs and Biological Products Paid Under Medicare Part B</h3><h4>Requiring Manufacturers of Certain Single-dose Container or Single-use Package Drugs to Provide Refunds for Discarded Amounts</h4><p>In rulemaking over the last few years, CMS has finalized many policies to implement provisions of the Infrastructure Investment and Jobs Act, which established a refund for discarded amounts of certain single-dose container or single-use package drugs under Part B. In the final rule, CMS finalizes its proposed changes on how it will identify certain drugs that are excluded from the definition of “refundable drug” for which payment has been made under Part B for fewer than 18 months and how it identifies drugs from a single-dose container. The agency will also require the JW modifier if a billing supplier is not administering a drug but there are discarded amounts during the preparation process before supplying the drug to the patient. Finally, CMS will continue to exclude skin substitutes from the refund application.</p><h4>Payment Limits when Negative or Zero ASP Data Are Reported</h4><p>CMS finalizes an approach to how it will calculate payment limits when manufacturers report negative or zero average sales price (ASP) data. Generally, the agency establishes a policy that negative and zero ASP data are considered “not available,” and that positive ASP data are considered available. In circumstances in which negative or zero ASP data are reported for some, but not all, National Drug Codes (NDCs) associated with a billing and payment code for a drug, the agency will calculate the payment limit using only NDCs with positive ASP data. In certain circumstances, it will carry over the most recent positive ASP data for the drug to calculate a payment limit when the manufacturer’s ASP is negative or zero. For biosimilars with negative or zero ASP data for all NDCs, CMS modifies its proposal such that the finalized payment limit calculation will use the biosimilar’s own, most recently available, positive manufacturer’s ASP data.</p><h4>Radiopharmaceuticals Furnished in a Physician Office</h4><p>CMS finalizes its proposal that for radiopharmaceuticals furnished in a setting other than the hospital outpatient department, the Medicare Administrative Contractors (MACs) shall determine payment limits based on any methodology used to determine payment limits for radiopharmaceuticals in place on or prior to November 2003. Such methodology may include but is not limited to the use of invoice-based pricing.</p><h4>Reducing Barriers for Beneficiaries Receiving Immunosuppressive Drugs</h4><p>CMS finalizes its proposed policies to reduce barriers faced by beneficiaries receiving immunosuppressive drugs under Medicare Part B. Because some beneficiaries rely on compounded immunosuppressive drugs for maintenance therapy, CMS finalizes revisions to its regulations to include certain compounded formulations of FDA-approved drugs that have approved immunosuppressive indications or are used in conjunction with immunosuppressive drugs, or that have been determined by a MAC to be reasonable and necessary to prevent or treat rejection of a transplanted organ or tissue. Specifically, CMS finalizes the inclusion of certain compounded formulations that are orally or enterally administered.</p><p>In addition, CMS finalizes changes regarding supplying fees and refills for immunosuppressive drugs. This includes allowing payment of a supplying fee for a prescription of a supply of up to 90 days and allowing prescriptions for immunosuppressive drugs to be refillable.</p><h4>Blood Clotting Factor Policy</h4><p>CMS updates its regulations to clarify its existing policy that blood clotting factors must be self-administered to be considered clotting factors for which the furnishing fee applies. It also clarifies that therapies that enable the body to produce clotting factors and do not directly integrate into the coagulation cascade are not themselves clotting factors to which the furnishing fee applies. Additionally, CMS clarifies that the furnishing fee is only available to entities that furnish blood clotting factors unless the costs associated with furnishing the clotting factor are paid through another payment system, including the PFS.</p><h3>Medicare Parts A and B Overpayment Provisions of the Affordable Care Act</h3><p>The agency finalizes several proposals related to the reporting and returning of Medicare Parts A and B overpayments. Specifically, CMS finalizes circumstances that would suspend the 60-day deadline for reporting and returning overpayments for up to 180 days to allow time for providers to investigate and calculate overpayments. In such cases, the final rule provides that the 60-day period would be suspended until the investigation is concluded and overpayments are calculated or 180 days after the date where the initial overpayment was identified, whichever is earlier.</p><h3>Medicare Shared Savings Program</h3><h4>MSSP Measure Set Changes</h4><p>Last year, CMS announced the establishment of a <a href="https://www.cms.gov/medicare/quality/cms-national-quality-strategy/aligning-quality-measures-across-cms-universal-foundation" target="_blank">Universal Foundation</a> measure set that it intended to use across as many relevant CMS programs as possible. To further align the MSSP measure set with the Universal Foundation, CMS finalizes its proposal to establish a new “Alternative Payment Model Performance Pathway (APP) Plus” measure set. The APP Plus includes six existing measures and five additional measures from the Universal Foundation that will be added incrementally between the CY 2025 and CY 2028 reporting years.</p><p>CMS also streamlines the reporting types for MSSP quality measures to just two — the Medicare clinical quality measure (Medicare CQM), which includes only Medicare patients, and electronic CQM (eCQM) which would include all-payer data. However, in response to stakeholder concerns, CMS will retain the MIPS CQM reporting option for an additional two performance years (CYs 2025 and 2026) to allow for more transition time. To incentivize the use of eCQM reporting, CMS will extend its scoring incentive to report eCQMs into the CY 2025 reporting year and beyond. ACOs that report eCQMs have slightly relaxed thresholds for meeting the minimum quality performance standard that makes them eligible for shared savings or ensures they avoid owing maximum shared losses.</p><h4>Mitigating the Impact of Significant, Anomalous and Highly Suspect Billing Activity</h4><p>CMS finalizes policies to exclude payment amounts from expenditure and revenue calculations for the relevant CY for which a significant, anomalous and highly suspect (SAHS) billing activity is identified (for CY 2024 or subsequent calendar years). The agency will also carve out these amounts from historical benchmarks used to reconcile the ACO for a performance year corresponding to the CY for which the SAHS billing activity is identified. CMS also reinforces that the agency has sole discretion in determining whether to reopen payment determinations.</p><h4>Revised ENHANCED Track RFI</h4><p>In the proposed rule, CMS sought feedback on potential features of a revised ENHANCED Track, including a benchmark discount rate, tapered sharing arrangements, minimum savings rate/minimum loss rate, and a cap on regional adjustment weights. In the final rule, the agency indicates it would consider feedback in future rulemaking. CMS acknowledged several comments from stakeholders, noting that nearly all commenters were opposed to a higher-risk track replacing the existing ENHANCED track, and commenters indicated that a higher-risk offering should be provided alongside the current ENHANCED Track.</p><h3>Quality Payment Program</h3><p>As mandated by MACRA, the QPP includes two tracks — the default MIPS and APMs. The rule adopts updates to what eligible clinicians must report during the QPP’s 2025 performance period and beyond. There is a lag of two years between the QPP’s performance period and the payment year; for example, CY 2025 performance will affect PFS payments in CY 2027. As required by MACRA, eligible clinicians will receive positive or negative payment adjustments of up to 9% in CY 2027 based on CY 2025 performance.</p><p>Key QPP-related provisions in the final rule include the following:</p><ul><li><h4>MIPS Value Pathways (MVPs)</h4><p>In prior rulemaking, CMS adopted a framework for MVPs that the agency intends as a long-term replacement for the current MIPS. MVPs organize the reporting requirements for each MIPS category around specific medical conditions, clinical specialties or episodes of care. In this rule, CMS finalizes five additional MVPs that would be available for the CY 2025 performance period: dermatology, gastroenterology, ophthalmology, pulmonology, surgical care and urology.</p></li><li><h4>MIPS Quality Category</h4><p>CMS will add the APP Plus reporting option described in the MSSP section of this Special Bulletin to the MIPS program. CMS also finalizes its proposal to apply a complex organization adjustment for APM Entities and virtual groups. Starting in the CY 2025 reporting period, CMS will add one point for each successfully reported eCQM. The adjustment will be capped at 10% of each participant’s quality category achievement points.</p></li><li><h4>MIPS Improvement Activities</h4><p>CMS finalizes its proposal to simplify the scoring of the MIPS Improvement Activity category. Starting with the CY 2025 reporting period, CMS will remove activity weightings, ensuring that each activity receives an equal weight. CMS also will reduce the number of improvement activities in which MIPS participants must participate.</p></li></ul><h2>Further Questions</h2><p>The policies and payment rates will generally take effect Jan. 1, 2025. Watch for a more detailed analysis of the final rule in the coming weeks.</p><p>If you have further questions, contact Jennifer Holloman, AHA’s senior associate director of policy, at <a href="mailto:jholloman@aha.org?subject=RE: Special Bulletin: CMS Issues Physician Fee Schedule Final Rule for CY 2025">jholloman@aha.org</a>.</p></div><div class="col-md-4"><p><a href="/system/files/media/file/2024/11/Special-Bulletin-CMS-Issues-Physician-Fee-Schedule-Final-Rule-for-CY-2025.pdf" target="_blank" title="Click here to download the Special Bulletin: CMS Issues Physician Fee Schedule Final Rule for CY 2025 PDF."><img src="/sites/default/files/inline-images/Page-1-Special-Bulletin-CMS-Issues-Physician-Fee-Schedule-Final-Rule-for-CY-2025.png" data-entity-uuid="70fc6202-29c7-4e14-9763-98bb5706c2d4" data-entity-type="file" alt="Special Bulletin: CMS Issues Physician Fee Schedule Final Rule for CY 2025 page 1." width="696" height="900"></a></p></div></div></div> Mon, 04 Nov 2024 15:20:45 -0600 Physician Fee Schedule (PFS)/MACRA/QPP /news/headline/2024-11-01-cms-issues-cy-2025-physician-fee-schedule-final-rule <p>The Centers for Medicare & Medicaid Services Nov. 1 released its calendar year 2025 <a href="https://www.federalregister.gov/public-inspection/2024-25382/medicare-and-medicaid-programs-calendar-year-2025-payment-policies-under-the-physician-fee-schedule">final rule</a> for the physician fee schedule. The rule will cut the conversion factor by 2.8% to $32.35 in CY 2025 compared to $33.29 in CY 2024. This reflects the expiration of the 2.93% statutory payment increase for CY 2024; a 0.00% conversion factor update under the Medicare Access and CHIP Reauthorization Act; and a .02% budget-neutrality adjustment. <br><br>In addition, CMS extended several regulatory telehealth waivers through 2025. These include waivers for reporting of enrolled practice addresses instead of home addresses when providers perform services from their homes; another for Federally Qualified Healthcare Centers and Rural Health Clinics to bill for telehealth services; and another allowing virtual supervision for residents in all teaching settings when the services are provided virtually. The agency also updated the definition of an interactive telecommunications system to include two-way, audio-only communication for any Medicare telehealth service furnished to a beneficiary in their home (if the beneficiary is incapable or does not consent to video technology). Finally, CMS notes, absent congressional action, statutory limitations in place for Medicare telehealth services prior to the COVID-19 public health emergency will again take effect on Jan. 1.<br><br>The agency also finalized several proposals related to the reporting and returning of Medicare Parts A and B overpayments. Specifically, CMS finalized circumstances that would suspend the deadline for reporting and returning overpayments to allow time for providers to investigate and calculate overpayments.<br><br>For the Quality Payment Program, CMS adopted six new, optional Merit-based Incentive Payment System Value Pathways for reporting beginning in 2025. For the Medicare Shared Savings Program, CMS finalized policies to mitigate the impact of significant, anomalous, and highly suspect billing activity for CY 2024 and subsequent years. Specifically, CMS will exclude payment amounts from financial calculations for the relevant CY for which the SAHS billing activity is identified and from historical benchmarks used for reconciliation.<br><br>AHA members will receive a Special Bulletin with more details Nov. 4.</p> Fri, 01 Nov 2024 15:10:53 -0500 Physician Fee Schedule (PFS)/MACRA/QPP /lettercomment/2024-09-09-aha-comments-cms-physician-fee-schedule-cy-2025-proposed-rule <div class="container"><div class="row"><div class="col-md-8"><p>September 09, 2024</p><p>The Honorable Chiquita Brooks-LaSure<br>Administrator<br>Centers for Medicare & Medicaid Services<br>Hubert H. Humphrey Building<br>200 Independence Avenue, S.W., Room 445-G<br>Washington, DC 20201<br>Submitted Electronically</p></div><div class="col-md-4"><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2024/09/AHA-Comments-on-CMS-Physician-Fee-Schedule-CY-2025-Proposed-Rule.pdf" target="_blank" title="Click here to download the AHA Comments on CMS Physician Fee Schedule CY 2025 Proposed Rule letter PDF.">Download the Letter PDF</a></div></div></div><div class="row"><div class="col-md-8"><p><em><strong>RE: CMS–1807–P Medicare and Medicaid Programs; CY 2025 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Prescription Drug Inflation Rebate Program; and Medicare Overpayments</strong></em></p><p>Dear Administrator Brooks-LaSure:</p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations; our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers; and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) physician fee schedule (PFS) proposed rule for calendar year (CY) 2025.</p><p><strong>The AHA applauds CMS’ proposals to extend many telehealth regulatory flexibilities through 2025.</strong> There are, however, many statutory waivers that are also scheduled to expire at the end of the year. <strong>As such, we urge CMS to work with Congress to extend these telehealth provisions.</strong> Their expiration would result in a telehealth “cliff,” risking reducing access to care for the millions of Americans who rely on virtual modalities to receive necessary services. As we have previously advocated, we cannot emphasize enough how essential waivers like removing geographic and originating site restrictions are to the provision of care and continued access to services.<a href="#fn1"><sup>1</sup></a></p><p><strong>We are also pleased that the agency proposes to exclude significant, anomalous and highly suspect (SAHS) from Medicare Shared Savings Program (MSSP) financial calculations.</strong> As we have previously commented, the inclusion of SAHS billing can have a significant impact on these calculations, in many cases resulting in a loss of shared savings.<a href="#fn2"><sup>2</sup></a> We applaud the agency for taking quick action to develop proposals to address concerns raised by stakeholders.</p><p><strong>However, we are deeply concerned with the proposed payment update, which would reduce payments by approximately 2.8% from their CY 2024 levels.</strong> This negative update comes after over two decades of conversion factor decrements and in the face of significant staffing shortages, rising inflation and unrelenting financial pressures. We are concerned that such a reduction in payment would pose significant risks to patients’ access to care. Indeed, a recent Medicare Trustees report highlights the potential impact of continued payment decrements on disparities in care. <strong>We urge CMS to work with Congress to provide a payment increase for 2025 and to develop a long-term plan for sustainable physician payment.</strong></p><p>Finally, we have concerns regarding CMS’ proposed updates to Medicare Parts A and B overpayment policies. As we have previously commented, we continue to assert that CMS’ reliance on <em>UnitedHealthcare Insurance Co. v. Azar</em> to remove “reasonable diligence” standards does not, in our view, hold what CMS understands it to hold.<a href="#fn3"><sup>3</sup></a> <strong>Additionally, while we appreciate that CMS acknowledges that additional time beyond 60 days is needed to complete investigations of overpayments, the proposed 180-day window to suspend reporting and repayment is insufficient. We urge CMS to provide sufficient exceptions when complex, multi-year or multi-site investigations necessitate additional time beyond 180 days.</strong></p><p>We appreciate your consideration of these issues. Our detailed comments are attached. Please contact me if you have questions or feel free to have a member of your team contact Jennifer Holloman, AHA’s senior associate director of policy at <a href="mailto:jholloman@aha.org?subject=RE:AHA Comments on CMS Physician Fee Schedule CY 2025 Proposed Rule letter">jholloman@aha.org</a>.</p><p>Sincerely,</p><p>/s/</p><p>Ashley B. Thompson<br>Senior Vice President<br>Public Policy Analysis and Development</p><p><a href="/system/files/media/file/2024/09/AHA-Comments-on-CMS-Physician-Fee-Schedule-CY-2025-Proposed-Rule.pdf#page=3"><em>Enclosure</em></a></p><hr><ol><li id="fn1"><a href="/system/files/media/file/2023/01/aha-feedback-to-the-senate%20on-the-creating-opportunities-now-for-necessary-and-effective-care-technologies-connect-act-letter-1-30-23.pdf" target="_blank">/system/files/media/file/2023/01/aha-feedback-to-the-senate%20on-the-creating-opportunities-now-for-necessary-and-effective-care-technologies-connect-act-letter-1-30-23.pdf</a></li><li id="fn2"><a href="/system/files/media/file/2024/07/Comment-Letter-on-CMS-Proposed-Rule-to-Mitigate-the-Impact-of-Significant-Anomalous-and-Highly-Suspect-Billing-Activity.pdf">/system/files/media/file/2024/07/Comment-Letter-on-CMS-Proposed-Rule-to-Mitigate-the- Impact-of-Significant-Anomalous-and-Highly-Suspect-Billing-Activity.pdf</a></li><li id="fn3"><a href="/system/files/media/file/2023/02/aha-comments-on-the-cms-proposed-rule-for-policy-andtechnical-changes-to-the-medicare-advantage-program-in-cy-2024-letter-2-13-23.pdf">/system/files/media/file/2023/02/aha-comments-on-the-cms-proposed-rule-for-policy-andtechnical-changes-to-the-medicare-advantage-program-in-cy-2024-letter-2-13-23.pdf</a></li></ol></div><div class="col-md-4"><p><a href="/system/files/media/file/2024/09/AHA-Comments-on-CMS-Physician-Fee-Schedule-CY-2025-Proposed-Rule.pdf" target="_blank" title="Click here to download the AHA Comments on CMS Physician Fee Schedule CY 2025 Proposed Rule letter PDF."><img src="/sites/default/files/inline-images/Page-1-AHA-Comments-on-CMS-Physician-Fee-Schedule-CY-2025-Proposed-Rule.pdf_.png" data-entity-uuid="8cf6c5cb-af68-430a-8798-cc5c88d76126" data-entity-type="file" alt="AHA Comments on CMS Physician Fee Schedule CY 2025 Proposed Rule letter page 1." width="692" height="900"></a></p></div></div></div> Mon, 09 Sep 2024 14:40:10 -0500 Physician Fee Schedule (PFS)/MACRA/QPP /2024-08-12-aha-comments-340b-drug-pricing-program-irf-payments-physician-fee-schedule-and-telehealth <div class="container"><div class="row"><div class="col-md-8"><p>August 12, 2024</p><p>Michael Chernew, Ph.D.<br>Chairman<br>Medicare Payment Advisory Commission<br>425 I Street, NW, Suite 701<br>Washington, D.C. 20001</p></div><div class="col-md-4"><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2024/08/aha-comments-on-mepac-topics-340b-inpatient-rehab-facility-payments-physician-fee-schedule-and-telehealth-letter-8-12-2024.pdf" target="_blank" title="Click here to download the AHA Comments on 340B Drug Pricing Program, IRF Payments, Physician Fee Schedule and Telehealth letter PDF.">Download the Letter PDF</a></div></div></div><div class="row"><div class="col-md-8"><p>Dear Dr. Chernew: </p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to share our comments as Medicare Payment Advisory Commission (MedPAC) begins its 2024-2025 cycle.</p><p>As the commission continues to consider topics related to the 340B Drug Pricing Program, inpatient rehabilitation facility (IRF) payments, the physician fee schedule (PFS) and telehealth in the new cycle, we urge MedPAC to:</p><ul><li><strong>Carefully consider the negative consequences for beneficiaries, providers and communities of any future efforts to cut Medicare payments to 340B hospitals.</strong></li><li><strong>Reconsider its pursuit of an IRF-skilled-nursing facility (SNF) site-neutral payment policy and discourage it from recommending potential changes to the IRF payment system.</strong></li><li><strong>Directionally support updates to physician reimbursement that more appropriately account for inflation.</strong></li><li><strong>Recommend repealing the in-person visit requirements for tele-behavioral health services and to not pursue policy options that would remove telehealth “incident to” options, as these policies limit patient access.</strong></li></ul><p>Our detailed comments on these issues follow.</p><h2>340B Drug Pricing Program</h2><p>We have serious concerns about the direction that MedPAC has taken with regard to its analysis of the 340B program. Specifically, at its April 2024 meeting, MedPAC shared results of an analysis comparing Medicare fee-for-service payments for covered outpatient drugs purchased under the 340B program to 340B ceiling prices. While we appreciate that MedPAC did not offer any recommendations based on this analysis at this time, we think it is important for it to consider the facts we outline below should it continue this work in the 2024 – 2025 cycle.</p><p>For more than 30 years, the 340B Drug Pricing Program has provided financial help to hospitals (and other providers) serving highly marginalized communities to manage rising prescription drug costs.<sup>1</sup> The program works by permitting certain hospitals to purchase covered outpatient drugs at a discounted price, generate savings, and use those savings to stretch limited federal resources to address the unique health care needs of their patients and communities. For example, hospitals often use their 340B savings to establish behavioral health clinics and implement medication management and community health programs, as well as offer free or discounted medications.<sup>2</sup> These important patient benefits are put at risk when hospitals’ 340B savings are cut.</p><p>The 340B program statute intentionally provides covered entities with additional funds by reducing the acquisition price on 340B drugs without changing hospitals’ reimbursement under the Medicare program. It is precisely this delta between the hospital’s acquisition price for the drug and the reimbursement received that allows 340B hospitals to meet the intent of the program and expand access to care for more patients. <strong>Therefore, MedPAC’s finding that Medicare payments exceeded 340B ceiling prices is consistent with the purpose and design of the 340B program.</strong> If Medicare payments for 340B drugs were reduced, it would diminish the funding available to 340B hospitals to fulfill Congress’ intent to allow these hospitals to use savings to expand the services they can provide. Thus, any Medicare cuts for 340B drugs undermine the congressional intent of the program by reducing the 340B savings available for covered entities to maintain, improve and expand access to health care services for patients.</p><p>We also encourage MedPAC’s to analyze how 340B ceiling prices are set and the factors that influence those prices. 340B ceiling prices are based on two components: the average manufacturer price of the drug and a unit rebate amount. For brand-name drugs, which account for a majority of 340B volume, the unit rebate amount is statutorily set at 23.1%. However, the unit rebate amount is subject to an inflationary penalty where it can exceed 23.1% if a drug company decides to increase the price of their drug faster than the rate of general inflation. Drug companies routinely increase their prices faster and higher than the rate of inflation. A study by the Assistant Secretary for Planning and Evaluation found that from January 2022 through January 2023, approximately 2,000 drugs experienced price increases greater than inflation, with an average price increase of 15.2%.<sup>3</sup> As a result, for many 340B drugs, the ceiling price is well <em>below</em> what is statutorily required, which leads to a greater difference between the ceiling price and the Medicare payment rate. Put another way, any gaps between ceiling prices and Medicare payment rates are a direct result of decisions by drug companies to increase drug prices — not hospitals. As such, already-struggling 340B hospitals should not suffer rate cuts that mainly benefit drug companies. In fact, MedPAC itself has calculated that hospitals’ Medicare margins are nearly <em>negative </em>12%.<sup>4</sup> Payment cuts for 340B drugs would make these margins worse, further jeopardizing hospitals’ ability to furnish programs and services that are supported by 340B savings.</p><p><strong>Given the important role that the 340B program plays in allowing hospitals to expand access to care for the patients and communities they serve, we urge MedPAC to carefully consider the negative consequences for patients and providers in any future efforts to cut Medicare payments to 340B hospitals.</strong></p><h2>IRF Payments</h2><p>MedPAC has considered potential approaches to lowering Medicare payments for select conditions in IRFs but we<strong> continue to discourage it from recommending such changes.</strong> Specifically, at the April 2024 meeting, the commissioners specifically considered whether conditions that fall outside the 13 that must account for 60% of IRF beneficiaries (the “60% rule”) should be paid at a lower rate than the one currently provided under the IRF prospective payment system (PPS). As the AHA detailed in response to the first session held on this topic (see AHA’s <a href="/2023-10-27-aha-comments-medpacs-site-neutral-nurse-staffing-requirements-october-2024-meeting-discussion">October 2023 letter</a>), such an approach not only would be far less precise and patient-centric than the current IRF PPS but also would have the potential to curtail access to needed rehabilitation services. <strong>To that end, the AHA is pleased that staff and commissioners seemed to acknowledge even more shortcomings of this approach.</strong></p><p>In AHA’s October 2023 letter, we explained why use of the 60% rule for payment determinations is misplaced. This letter will not recount those points in their entirety, but we would reiterate that the 60% rule was never intended as and has never been used as a tool to determine coverage or payment for IRF services. Instead, this rule has served <em>solely </em>as a tool to distinguish IRFs from other hospitals at the very highest level. Therefore, applying this broad classification tool to patient-specific determinations regarding payment or coverage is misguided.<strong> </strong>Further, and as MedPAC acknowledged, Medicare coverage regulations require that 100% of all Medicare beneficiaries treated in IRFs meet specific, detailed medical necessity requirements.<sup>5</sup> As such, we urge the commission’s to refrain from using terms “compliant” and “noncompliant” to describe IRF patient groups that fall into and out of the 60% rule, respectively, despite the explanations that MedPAC staff provided regarding these terms.</p><p>To this point, the AHA appreciated discussion from MedPAC commissioners and staff during this session acknowledging the difficulty involved in determining the appropriateness of IRF admissions for individual patients. Indeed, medical necessity determinations do not rely on the primary condition of the patient but instead involve a thorough assessment of the patient's medical and functional status and prognosis.<sup>6</sup> Therefore, the AHA endorses the view that this decision is a judgement call best made by the expert clinicians treating the patient.<strong> </strong>Thus, while it may appear based on the data alone that there is significant overlap in patient types treated in IRF and SNFs, experienced clinicians have utilized their expertise to screen patients and distinguish those that are best suited for IRFs based on characteristics that may not be readily apparent in the data MedPAC has available to them. <strong>Thus, we are concerned MedPAC’s premise for leveling payment for supposedly overlapping patient types is misguided, as those placed in IRFs have been properly screened and distinguished from other patients.</strong></p><p>The IRF PPS is a sophisticated payment system that takes numerous factors into account to provide a targeted payment amount. Through the IRF PPS, CMS analyzes the relative resource use of each diagnosis group (referred to as case-mix groups) and assigns a relative weight. Through this mechanism, the agency is already accounting for differences in resource use among patients and adjusts payments accordingly. <strong>However, despite the use of this refined payment system, MedPAC is considering imposing a blunt and imprecise instrument — one that would group a third or more of the current patient population into a single noncompliant category — to summarily reduce payment. It would be both inconsistent with MedPAC’s overarching goal of improving payment accuracy, as well as harmful to patients, to modify the current payment system in this way.</strong> The AHA appreciates the need to explore avenues to improve the accuracy of payments but does not believe such a broad instrument is appropriate to do so.</p><p>Beyond the use of the 60% rule, the AHA does not believe that attempting to align payments between IRFs and SNFs more generally is a worthwhile endeavor. This is due to the vastly different regulatory environments under which IRFs (hospitals) and SNFs (subacute facilities) operate. The difficulties in aligning payment incentives and other important factors between these and other sites of care became apparent during MedPAC’s work on the Unified Post-Acute Care payment system. In addition, and as was noted during the commission’s discussion, IRFs provide a vastly more intensive course of treatment than SNFs. Further, Medicare cost sharing, lifetime coverage and several other factors vary greatly between the two types of facilities. Therefore, to the extent MedPAC continues work on the IRF PPS, the AHA encourages it to examine payment accuracy within the IRF PPS, rather than attempt to analogize IRFs and SNFs.</p><p>When comparing IRFs and SNFs, MedPAC has expressed a reluctance to utilize functional data due to it being provider reported and tied to payment and therefore potentially prone to inaccuracies. The AHA urges MedPAC to reconsider this position. While no data are perfect, the functional data provided, especially on aggregate, should not be considered any more flawed than other Medicare data which require provider submitted information, including information that impacts payment. This includes cost reports, claims and other data on which MedPAC regularly relies, and all of which influences reimbursement for providers. Instead of dismissing this data, we respectfully request that it be considered as one of many points of insight into the experience of patients treated at IRFs.</p><h2>Physician Fee Schedule Updates</h2><p>We appreciate MedPAC’s recognition that the current framework for physician payment is inadequate and that it is considering policy approaches to address these issues. The impacts of inflation and rising input costs continue to outpace the reimbursement for services covered by the PFS. There is a widening gap between physician payment and increases in the Medicare Economic Index (MEI), and we have previously <a href="/system/files/media/file/2023/01/aha-comments-re-medpac-final-payment-update-recommendations-1-3-23.pdf">commented</a> on the need to right size payment with inflation. As detailed below, we have specific feedback on the three policy approaches MedPAC is considering.</p><p>We oppose updating physician practice expenses (PEs) based on the hospital market basket minus productivity, as this approach would add unnecessary complexity by creating two conversion factors (one for practice expenses and another for malpractice and work expenses) and would inappropriately penalize clinicians performing low practice expense services and those operating in facility settings. We directionally support updating physician payments by the MEI but do not think the discussed MEI minus one percentage point update is nearly sufficient to cover the existing shortcomings in physician reimbursement. Finally, we support extending Advanced-Alternative Payment Model (A-APM) incentive payments to support transition to value-based care.</p><p><strong>However, we are concerned that MedPAC seems to be framing many of their discussions and approaches on physician payment updates with a goal of reducing site-of-service payment differentials. The AHA strongly opposes site-neutral payments, which reduce access to critical health care services, especially in rural and other underserved areas.</strong> <strong>Site-neutral policies ignore fundamental differences between hospital outpatient departments (HOPDs) and other outpatient care settings.</strong> Hospitals and health systems provide unique benefits to their community like 24/7 standby capacity for emergencies and special service capabilities such as burn, neonatal, psychiatric services, and more. HOPDs also are required to comply with more regulatory and safety codes and care for sicker, more complex patients than other care settings. Expanding site-neutral cuts would endanger the critical role hospitals and health systems play in their communities, including access to care for patients. </p><h3>Approach 1: Update Physician PEs Based on Hospital Market Basket Minus Productivity.</h3><p><strong>We oppose MedPAC’s approach to increase the PE portion of fee schedule payments by the hospital market basket minus productivity. </strong>First, this proposal would exacerbate disparities in reimbursement in certain specialty areas by effectively penalizing clinicians performing low PE services because their payments would be increased at a lower rate than clinicians performing high PE services. It also would penalize clinicians performing services in facility settings such as those in critical care, hospital medicine, emergency medicine and behavioral health. Decreasing reimbursement for certain physicians in order to augment reimbursement for others risks reducing patient access and exacerbating provider shortages.</p><p>In addition, this option would add unnecessary complexity by creating separate conversion factors for the PE versus the work and malpractice components of the physician reimbursement equation. Yet, physician work and malpractice insurance are also impacted by inflation that has not been adequately accounted for by payment updates. Indeed, a recent report from AMA found that increases in malpractice insurance premiums are accelerating. In 2018, 13.7% of malpractice premiums increased year-to-year, yet from 2020 through 2022, 30% of premiums increased annually.<sup>7</sup> All three factors contributing to physician reimbursement (practice expense, work and malpractice relative value units (RVUs)) require updates to account for inflation and rising input costs.</p><p>We also reiterate our previous concerns regarding site-neutral payments. Both Approach 1 and Approach 2 (listed below) are framed in the context of reducing site of service payment differentials. Proposals that attempt to treat HOPDs the same as independent physician offices and other ambulatory sites of care ignore the very different level of care provided by hospitals and the needs of the patients and communities cared for in that setting. These outpatient departments treat more patients from medically underserved populations who tend to be sicker and more complex to care for than Medicare patients treated in independent physician offices and ambulatory surgical centers. They also are held to more rigorous licensing, accreditation and regulatory requirements.</p><p>The cost of care delivered in hospitals and health systems, including HOPDs, is fundamentally different than other sites of care and thus needs to consider the unique benefits that only they provide to their communities. This includes maintaining standby capacity for natural and man-made disasters, public health emergencies, other unexpected traumatic events, and the delivery of 24/7 emergency care to all who come through their doors regardless of ability to pay or insurance status. Since the hospital safety-net and emergency standby roles are funded through the provision of all outpatient services, expanding site-neutral cuts to additional HOPDs and the outpatient services they provide would endanger the critical role that they play in their communities, including access to care for patients, especially the most medically complex<strong>. The AHA strongly opposes further site-neutral payment cuts, which threaten access to care. </strong></p><h3>Approach 2: Update Payment Rates by MEI Minus One Percentage Point.</h3><p><strong>While we directionally support updating rates consistent with the MEI, MEI minus 1% is insufficient to cover existing shortcomings in physician reimbursement.</strong> Indeed, we echo the concerns expressed by many commissioners that this could result in a negative compounding effect over time. We encourage MedPAC to pursue annual updates to payment rates that are more in line with inflation and are made outside budget neutrality.</p><p><strong>We also are encouraged that MedPAC is evaluating strategies to improve RVU calculations. </strong>We suggest that the commission revisit this issue once updated Physician Practice Information Survey (PPIS) data are available. The AMA PPIS provides critical data to support updates to the MEI and Resource Based Relative Value Scale. Indeed, integration of PPIS data was phased into CMS RVU calculations over the course of 2010-2014. Current rate setting is based on AMA PPIS data, supplemental data sources as required by Congress, and in certain circumstances, crosswalks in indirect PE allocation. PPIS surveys are still in the field through June 2024, with data available to CMS in early 2025. We believe it would be premature to discuss strategies to improve RVU calculations without the latest data. Additionally, the agency is still evaluating trends and impact on data from COVID-19.</p><p>We also caution that any updates to RVUs would cause a redistribution of<strong> </strong>payments based on physicians’ geography and specialty. The same can be said for efforts to rebase and rescale MEI, as was suggested by the discussion.<strong> </strong>Historically, the MEI had been based on 2006 data representing only self-employed physicians. In the calendar year (CY) 2023 PFS final rule, CMS rebased and revised the MEI to use publicly available data sources for 2017 input costs that represent all types of physician practice ownership. However, the agency has delayed implementation of the rebased and revised MEI. This was because while it anticipated that revised weights would not impact overall spending for PFS services, they would impact distribution of payments based on geography and specialty. <strong>We have echoed CMS’ concerns about the redistributive effects of the new MEI and therefore support a further delay in its implementation as we commented in response to the CY 2024 PFS proposed rule.</strong><sup>8</sup> Updating the MEI would cause significant cuts for certain specialties like cardiac surgery, neurosurgery and emergency medicine. In addition to significant specialty redistribution, geographic redistribution also would occur. For example, a significant reduction in the weight of office rent would lead to reductions in payments for urban localities. These changes would, of course, come on top of the other substantial cuts physicians have seen in recent years, including the year over year decreases to the conversion factor. As such, careful evaluation is necessary particularly given current workforce shortage concerns.</p><p><u></u></p><h3>Approach 3: Extend the A-APM Participation Bonus.</h3><p><strong>We support MedPAC’s approach to extend A-APM incentive payments. Indeed, we have urged Congress to do the same to facilitate the transition to value-based payment. </strong>Specifically, the Medicare Access and CHIP Reauthorization Act (MACRA) provided 5% incentive payments for clinicians participating in A-APMs to support non-fee-for-service programs like meal delivery programs, transportation services, digital tools and care coordinators which promote population health, among other services. These incentive payments have been critical to support organizations in transitioning to value-based care. However, MACRA only provided the A-APM bonuses through the CY 2024 payment period. The Consolidated Appropriations Act (CAA) of 2023 extended these bonus payments through 2025 (albeit at 3.5% vs. 5%), and the most recent CAA of 2024 included an extension through 2026 at 1.88%.</p><p>In addition, we encourage MedPAC to recommend removal of CMS’ problematic high- and low-revenue thresholds for APMs. CMS has used this label as a proxy measure to, for example, determine if an organization is supporting underserved populations. Yet, there is no valid reason to conclude that this delineation is an accurate or appropriate predictor of whether an organization treats an underserved population. In fact, analysis suggests that critical access hospitals, federally qualified health centers and rural health centers are predominantly classified as high revenue. Further, both low- and high-revenue organizations are working to address health equity as part of their care transformation work. Assistance investing in these efforts would help across the board.</p><h2>Telehealth Status Report</h2><p>We appreciate MedPAC’s continued discussion of telehealth utilization. Telehealth has always provided patients with increased access and convenience, but waivers implemented during the COVID-19 pandemic have allowed broader portions of the population to experience the benefits of virtual care.</p><p>Prior to the public health emergency (PHE), telehealth utilization was minimal due to limited fee-for-service coverage. Artificial barriers, such as requirements for patients to be located in specific settings (like clinics) or geographies (limited to rural areas), meant that relatively few patients could benefit from telehealth services. Telehealth waivers implemented as a result of the PHE have contributed to improved access for millions of Americans, especially those with transportation or mobility limitations. Continuing these flexibilities is necessary to ensure patients’ continued access to high-quality care. Yet, there is currently a patchwork of temporary waivers for telehealth services that, barring further action, will expire at the end of 2024. If this occurs, we risk a telehealth “cliff” that would negatively impact patient access in all communities.</p><p><strong>Recognizing both the immediate and potential long-term benefits of telehealth, we recommend permanent extension of certain telehealth waivers, as we have communicated to Congress.</strong><sup>9</sup></p><ul><li>Permanently eliminate originating- and geographic-site restrictions, thus allowing telehealth visits to occur at any site where the patient is located, including urban areas and the patient’s home.</li><li>Permanently eliminate in-person visit requirements for tele-behavioral health, which would ensure that patients do not need an in-person visit before initiating virtual treatment.</li><li>Permanently remove distant site restrictions on federally qualified health centers and rural health clinics, which would ensure that they can continue to provide telehealth services.</li><li>Permanently allow payment and coverage for audio-only telehealth services.</li><li>Permanently expand eligible telehealth provider types to include physical therapists, occupational therapists, speech-language pathologists and audiologists.</li></ul><p><strong>We encourage MedPAC to also recommend permanent extension of these provisions to support continued access for patients.</strong></p><p>We also have specific feedback regarding a few of the guardrail proposals the commission has discussed, per below.</p><h3>In-person Visit Requirements</h3><p>e appreciate the concerns identified by many of the commissioners regarding in-person visit requirements and the potential disruption these options would have on existing care patterns, particularly in clinical areas like behavioral health.<strong> </strong>While some patients may benefit from a periodic in-person evaluation, it should be left to clinical judgment when and how frequently these should occur, rather than an arbitrary general requirement. Indeed, adding a requirement for an in-person visit at specific cadences may unintentionally lead to scheduling of additional appointments that otherwise are not clinically necessary simply to “check the box” that the patient had an in-person visit to continue virtual services. <strong>As such, we urge MedPAC to recommend repealing the in-person visit requirements for tele-behavioral health services.</strong></p><p>The CAA of 2021 required that a patient must receive an in-person evaluation six months before they can initiate tele-behavioral health treatment and also must have an in-person visit annually thereafter. This requirement has been waived since the start of the PHE; however, there are concerns about the impact that reinstatement of this policy or enactment of similar in-person visit policies for other specialty areas could have on patient access.</p><p>This requirement was derived as a cost savings measure rather than a policy to support clinical necessity. As such, we are very concerned about its potentially negative impacts on access to care. Specifically, particularly for behavioral health, there is a widening gap between provider capacity and patient demand. Over 30% of the U.S. adult population has reported symptoms of anxiety and depression since the start of the pandemic (compared to 11% prior), and provider shortages in areas like psychiatry are only expected to grow (estimates for 2024 indicate a shortfall of between 14,280-31,091 psychiatrists nationally).<sup>10,11</sup></p><p>We also know that the widening gap between patient demand and provider capacity is being felt even more acutely in rural and underserved communities. This may be part of the reason that the majority of patients utilizing tele-behavioral health services during the pandemic were in rural areas (55%).<sup>12 </sup>These patients are not able to readily see an in-person provider given the shortages in their geographic area and in many cases would need to drive several hours to see the closest provider in person. Therefore, in-person visits may simply not be an option for many patients in rural and underserved communities.</p><h3>Guardrail Policies</h3><p>While we appreciate the commission’s discussion of guardrail policy options to ensure appropriate utilization of telehealth, we point to recent publications issued by the Department of Health and Human Services Office of Inspector General (OIG) that found no widespread instances of fraud, waste and abuse attributed to telehealth during the PHE.<sup>13 </sup>In its most recent telehealth report, the OIG did not make “recommendations because providers generally met Medicare requirements when billing for E/M services provided via telehealth and unallowable payments we identified resulted primarily from clerical errors or the inability to access records.”<sup>14 </sup>In addition, a previous OIG report found that only 0.2% of all telehealth providers were “potentially high-risk” for fraud, waste and abuse during the PHE.<sup>15</sup> Policies should support the 99.8% of providers safely and compliantly delivering services.</p><p>We recognize and appreciate the importance of identifying program integrity risks and establishing reasonable guardrails to prevent fraud, waste and abuse. However, the fact remains that virtually all providers who administered telehealth services during the PHE did so in a compliant manner; as such, concerns about propensity for widespread fraud, waste and abuse are not supported by the data.<strong> Therefore, establishing additional guardrails above and beyond the existing policies for the general Medicare program are not warranted at this point.</strong></p><p><u></u></p><p>MedPAC also considered “outlier guardrail” policies that focus on providers who bill disproportionately more telehealth services. <strong>We are concerned that such a focus also would do little to identify fraud and abuse. </strong>For example, given physician shortages in areas like behavioral health, an increasing number of clinicians are solely providing virtual services. Doing so does not indicate a lack of compliance, but only an effort to provide access to as many patients as possible — something providers should not be penalized for through increased administrative burden and review.</p><p><u></u></p><h3>Incident-to Services</h3><p>We disagree with policy options to remove incident-to billing for telehealth. Doing so would limit the ability to leverage telehealth to support certain services, such as virtual supervision. As an example, prior to the PHE, CMS required that physicians serving in supervisory capacities be physically present in the same office suite when auxiliary personnel performed visits under their supervision and be available if assistance was needed. However, during the PHE, this supervision could be completed virtually using real-time audio-video technology, which supported improved access for geographically dispersed patients. Such flexibilities that leverage geographically dispersed providers are becoming more critical, especially as staffing shortages become more severe. This is also true for hospitals and health systems operating across multiple locations. <strong>Therefore, we encourage MedPAC </strong><em><strong>not</strong></em><strong> to pursue policy options that would remove telehealth incident-to options, as this would limit patient access.</strong></p><p>We thank you for your consideration of our comments. Please contact me if you have questions or feel free to have a member of your team contact Shannon Wu, AHA’s director of payment policy, at <a href="mailto:swu@aha.org">swu@aha.org</a> or 202-626-2963.</p><p>Sincerely,</p><p>/s/</p><p>Ashley B. Thompson<br>Senior Vice President<br>Public Policy Analysis and Development </p><p>Cc: Paul Masi, M.P.P.<br>MedPAC Commissioners<br>__________<br> <br><sup>1</sup> <a href="https://www.healthaffairs.org/content/forefront/30-years-340b-preserving-health-care-safety-net">https://www.healthaffairs.org/content/forefront/30-years-340b-preserving-health-care-safety-net</a></p><p><sup>2</sup> <a href="/340b-case-studies">/340b-case-studies</a> <br><sup>3</sup> <a class="ck-anchor" href="https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs" id="https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs">https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs</a><br><sup>4</sup> <a class="ck-anchor" href="https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_Ch3_MedPAC_Report_To_Congress_SEC.pdf" id="https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_Ch3_MedPAC_Report_To_Congress_SEC.pdf">https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_Ch3_MedPAC_Report_To_Congress_SEC.pdf</a><br><sup>5</sup> These medical necessity requirements include requiring at least 15 hours of therapy per week, a multiple disciplinary approach to care, close physician supervision, rehabilitation nursing and several others.<br><sup>6</sup> The preadmission screening requirement at 42 C.F.R. § 412.622(a)(4)(i) must be conducted by a licensed clinician within 48 hours of admission, include a detailed review of the patient’s condition, history, prior and expected level of function, expected level of improvement, expected duration of treatment, evaluation of patient’s risk for complications, conditions causing the need for rehabilitation, the detailed therapies needed by the patient, and the discharged expectations for the patient. The rehabilitation physician at the IRF must review and concur with the findings of this screening.<br><sup>7</sup> <a class="ck-anchor" href="https://www.ama-assn.org/practice-management/sustainability/medical-liability-premium-hikes-continue-4th-straight-year" id="https://www.ama-assn.org/practice-management/sustainability/medical-liability-premium-hikes-continue-4th-straight-year">https://www.ama-assn.org/practice-management/sustainability/medical-liability-premium-hikes-continue-4th-straight-year</a> <br><sup>8</sup>   <a class="ck-anchor" href="/system/files/media/file/2023/09/aha-comments-on-cms-physician-fee-schedule-proposed-rule-for-calendar-year-2024-letter-9-11-23.pdf" id="/system/files/media/file/2023/09/aha-comments-on-cms-physician-fee-schedule-proposed-rule-for-calendar-year-2024-letter-9-11-23.pdf">/system/files/media/file/2023/09/aha-comments-on-cms-physician-fee-schedule-proposed-rule-for-calendar-year-2024-letter-9-11-23.pdf</a><br><sup>9</sup> <a class="ck-anchor" href="/2024-04-10-aha-house-statement-legislative-proposals-support-patient-access-telehealth-services" id="/2024-04-10-aha-house-statement-legislative-proposals-support-patient-access-telehealth-services">/2024-04-10-aha-house-statement-legislative-proposals-support-patient-access-telehealth-services</a><br><sup>10 </sup><a href="https://www.kff.org/statedata/mental-health-and-substance-use-state-fact-sheets/">https://www.kff.org/statedata/mental-health-and-substance-use-state-fact-sheets/</a></p><p><sup>11</sup> <a href="https://pubmed.ncbi.nlm.nih.gov/29540118/">https://pubmed.ncbi.nlm.nih.gov/29540118/</a> <br><sup>12</sup> <a class="ck-anchor" href="https://www.kff.org/coronavirus-covid-19/issue-brief/telehealth-has-played-an-outsized-role-meeting-mental-health-needs-during-the-covid-19-pandemic/" id="https://www.kff.org/coronavirus-covid-19/issue-brief/telehealth-has-played-an-outsized-role-meeting-mental-health-needs-during-the-covid-19-pandemic/">https://www.kff.org/coronavirus-covid-19/issue-brief/telehealth-has-played-an-outsized-role-meeting-mental-health-needs-during-the-covid-19-pandemic/</a></p><p><sup>13</sup><a href="https://oig.hhs.gov/oas/reports/region1/12100501.asp">https://oig.hhs.gov/oas/reports/region1/12100501.asp</a></p><p><sup>14</sup> <a href="https://oig.hhs.gov/oas/reports/region1/12100501.asp">https://oig.hhs.gov/oas/reports/region1/12100501.asp</a></p><p><sup>15</sup><a href="https://www.pandemicoversight.gov/media/file/telehealthfinal508nov30pdf">https://www.pandemicoversight.gov/media/file/telehealthfinal508nov30pdf</a> <br> </p></div></div></div> Mon, 12 Aug 2024 18:56:30 -0500 Physician Fee Schedule (PFS)/MACRA/QPP