Category Archives: Medicare Cuts

July 2025 Actions are the Turning Point for U.S. Healthcare

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July 2025 Actions are the Turning Point for U.S. Healthcare

July 2025 will be the month U.S. healthcare leaders recognize as the industry’s modern turning point. Consider…

  • On July 4, the One Big Beautiful Bill Act was signed into law setting in motion $960 billion in Medicaid cuts over the decade and massive uncertainty among those most adversely impacted—low income and under-served populations dependent on public programs, 8 to 11 million who used now-suspended marketplace subsidies to buy insurance coverage, and hundreds of state and local health agencies left in funding limbo.
  • On July 15, the Bureau of Labor Statistics reported the June Consumer Price Index rose .3% bumping the LTM to 2.7% (lower than LTM of 3.4% for medical services). Prices have edged up.
  • On July 31, President Trump issued an Executive Order to 17 drug companies ordering them to reduce prices on their drugs by September 29 or else. And CMS issued final rules for FY2026 Medicare payments to hospitals, rehab and other providers reflecting increases ranging from 2.5-3.3% effective October 1.
  • And on the same day, the Bureau of Labor issued its July 2025 jobs report that showed a disappointing net gain of 73,000 jobs plus downward revisions for May and June of 258,000 sparking Wall Street anxiety and President Trump to call the results “rigged” before firing BLS head Erika McEntarfer. Note: healthcare added 55,000 in July—the biggest of any sector and more than its 42,000 average monthly increase.

Collectively, these actions reflect rejection of the health industry by the GOP-led Congress.

It follows 15 years of support vis a vis the Affordable Care Act (2010) and pandemic recovery emergency funding (2020-2021). In that 15-year period, the bigger players got bigger in each sector, investment of private equity in each sector became more prevalent, costs increased, affordability for consumers and employers decreased, and the public’s overall satisfaction with the health system declined precipitously.

For the four major players in the system, the passage of the “big, beautiful bill” was a disappointment. Their primary concerns were not addressed:

  • Physicians wanted relief from annual payment cuts by Medicare preferring reimbursement tied directly to medical inflation. And insurer’ prior authorization and provider reimbursement was a top issue. Status: Not much has changed though adjustments are promised.
  • Hospitals wanted continuation of federal Medicaid funding, protection of the 340B drug purchasing program, rejection of site-neutral payment policies, higher Medicare reimbursement and relief from insurer prior authorization frustrations. Status: Medicaid funding is being cut forcing the issue for states. CMS payment increases for 2026 are lower than operating cost increases. Insurers have promised prior-auth relief but details about how and when are unknown. And Congress posture toward hospitals seems harsh: price transparency compliance, safety event reporting, and cost concerns are bipartisan issues.
  • Insurers wanted sustained funding for state Medicaid and Medicare Advantage programs and federal pushback against drug prices and hospital consolidation. Status: Congress appears sympathetic to enrollee complaints and anxious to address insurer “waste, fraud and abuse” including overpayments in Medicare Advantage.
  • Drug companies oppose “Most Favored Nation” pricing and want protections of their patents and limits on how much insurers, pharmacy benefits managers, wholesalers, online distributors and other “middlemen” earn at their expense. Status: to date, little action despite sympathetic rhetoric by lawmakers. Status: to date, Congress has taken nominal action beyond the Inflation Reduction Act (2022) though 23 states have passed legislation requiring PBMs, insurers and manufacturers to disclose drug prices and 12 states have established Prescription Drug Affordability Boards to monitor prices.

My take:

The landscape for U.S. healthcare is fundamentally changed as a result of the July actions noted above. It is compounded by public anxiety about the economy at home and global tensions abroad.

These July actions were a turning point for the industry: responding appropriately will require fresh ideas and statesmanship. Transparency about prices, costs, incentives and performance is table stakes. Leaders dedicated to the greater good will be the difference.

The GOP Budget: Tax Cuts for the Wealthy and More Medical Debt for Everyone Else

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, ACA, Bankruptcy, Credit Ratings, Health Insurance Coverage Adequacy, Health Policy, Healthcare Reform, Medicaid, Medicaid Cuts, Medical Debt, Medicare, Medicare Advantage, Medicare Cuts, Pass the Buck, Underinsured, Uninsured • Leave a comment
https://www.firesidestacks.com/p/the-gop-budget-tax-cuts-for-the-wealthy?utm_source=post-email-title&publication_id=2587633&post_id=164114418&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

The GOP’s reconciliation bill, the “One Big Beautiful Bill Act” (yes, it’s actually called that), is a cruel exercise in slashing benefits for the poor, the elderly, and the sick to free up fiscal space for yet more tax cuts for the rich. Compounding the harm, these benefit cuts are nowhere near enough to pay for the bill’s tax cuts for the wealthy.

Central to this effort are massive cuts to Medicaid and the Affordable Care Act (ACA) marketplaces that, as I argued in my recent paper, will exacerbate our ongoing medical debt crisis.

The GOP reconciliation package that the Senate and House recently agreed to instructed the House Energy and Commerce Committee, which oversees spending on health-care programs including Medicaid and the Children’s Health Insurance Program (CHIP), to identify up to $880 billion in savings over the next 10 years.

Under the rules of the budget reconciliation process, Republicans need to offset any tax cuts they wish to make permanent with an equal dollar value in cuts to spending so as to remain deficit neutral. Trillions of dollars in tax cuts for the wealthier therefore necessitate trillions of dollars in cuts to spending that fall mostly on the social safety net.

Although they did not quite reach that target, the committee still returned a proposed package of deep cuts and changes to Medicaid and to the ACA marketplaces that would reduce federal medical spending by at least $715 billion over 10 years, with about $625 billion in reduced Medicaid spending.1

After public backlash, Republicans seem to have backed off some of their most radical plans for Medicaid (at least for now—one of the challenges of taking health care from people is that it’s terrible politics, so the precise details of the cuts are likely to remain a moving target until the bill passes).

But all options they are close to settling on would still do horrific damage to the well-being of working-class families.

This includes requiring all Medicaid recipients above the federal poverty line to “cost share” by paying (larger) premiums and copayments,2 cutting federal matching to states that provide public health insurance coverage to undocumented and perhaps documented immigrants (on their own dime), and imposing harsh work requirements on “able-bodied adults without dependent children.” This latter provision will cut federal Medicaid spending by roughly $300 billion over 10 years even though the vast majority (92 percent) of nondisabled, non-elderly adult Medicaid recipients are already working, studying full time, or serving as caregivers. This is because work requirements create burdensome reporting requirements to demonstrate compliance that will cause Medicaid recipients who are already employed to lose their insurance as well—blaming the victim for losing their health care, in essence.

The Congressional Budget Office estimates that the reconciliation bill would decrease Medicaid enrollment by 10.3 million in 2034 (the end of the reconciliation bill budget window).

According to this same analysis, most of these individuals would not obtain other insurance (e.g., through an employer) and would thus become uninsured.

When combined with the bill’s changes to the ACA marketplace and the expiration of the enhanced premium tax credits—a wildly successful policy that was introduced as part of the American Rescue Plan Act (ARPA) and one that Republicans have shown no inclination to extend—this would result in an additional 13.7 million uninsured individuals in 2034, a 30 percent increase, according to KFF estimates.

Republicans seem hell-bent on undoing the remarkable progress made in the 15 years since the passage of the ACA in reducing the non-elderly uninsured rate from 17.8 percent in 2010 to roughly 9.5 percent today (plus ça change).

But we’ve seen less focus on how this will affect the problem of underinsurance.

Republicans’ Medicaid cost-sharing requirements, the changes they have proposed to the ACA marketplaces, and their determination to let the ARPA premium tax credit enhancements expire will also worsen the problem of underinsurance, an area where we have made considerably less progress.

Taken together, this will worsen the ongoing medical crisis because medical debt is driven by uninsurance and underinsurance.

Medical debt is, unlike in most other countries, and despite the successes of the ACA, a major problem in the United States. KFF found that 20 million adults (almost 1 in 12) owed “significant” medical debt to a health-care provider.3 This number rises when we consider a more expansive definition of medical debt including credit card balances and bank loans used to pay medical providers. Under that definition, an estimated 41 percent of American adults (~107 million people) carried some form of medical debt and 24 percent of American adults (~62 million people) had medical debt that was past due or that they were unable to pay. Among those with medical debt using this more expansive definition, nearly half (44 percent) reported owing at least $2,500, and about one in eight (12 percent) said they owe $10,000 or more. The poor, the sick, the middle-aged, and Black and Hispanic individuals disproportionately bear the brunt of this problem.

The crisis of medical debt and underinsurance is so widely recognized by Americans that a state attorney general candidate can go viral just by talking about the reality of a GoFundMe health-care system millions of Americans face.

The consequences of all this debt are dire—and reflect a health-care system that heals people physically but leaves many permanently scared financially. In 2022, medical debt (using the narrow definition) made up an estimated 58 percent of all debts that had gone to collections, and 62 percent of bankruptcies were attributed in part to medical debt. Medical debt also damages credit scores, leading to a wide variety of negative impacts on financial well-being that can follow families for years.

A poor credit score means that families may be unable to obtain a mortgage or a car loan or may end up paying much higher interest rates.

Credit scores are commonly used by landlords to screen tenants and by employers as part of a background check during the hiring process. Even for those who manage to maintain their credit after taking on medical debt, there are real costs. For those with limited income and assets, debt service may displace spending on food, clothing, and other essentials, leading to material hardship. It can make savings impossible and limit economic mobility.

Medical debt is a problem largely generated by poor policy decisions including, as I argue in my paper, prioritizing and incentivizing health insurance coverage through the private market rather than through Medicaid and Medicare, which offer comprehensive coverage more cheaply. The problem would rapidly disappear if we could extend comprehensive health insurance coverage to the millions of uninsured and underinsured people who live with the constant risk that a sudden medical event could ruin their finances and constrain their futures.

But rather than fix the problem, the GOP plans to throw millions off Medicaid and saddle those who remain with higher costs and more limited coverage. The results of these poor policy decisions will be more sickness, more debt, and higher costs for everyone in exchange for on-paper “savings.” And all this in service of tax cuts for the wealthy they haven’t even bothered to justify.

If you ask Eleanor

“If the old people cannot afford their medical care under their own Social Security allowances, then the burden is going to fall on their children who are in their earning years. This will mean that just at the time when these children who may be having young children of their own and needing medical care, a young couple will also have to consider shouldering the burden for parents as well. This is not fair, and leads to both the children and the older people not getting full coverage, since both will try to shave a little off their needs in order not to make the burden impossible to carry.”

– Eleanor Roosevelt, My Day (May 23, 1962)

What Trump and the GOP have planned for healthcare

Posted on by • Posted in ACA, Congressional Budget Office (CBO), Health Insurance Coverage Adequacy, Health Insurance Denial, Health Insurance Industry, Health Policy, Health System, Healthcare Reform, Hospital, Hospital Industry, Medicaid, Medicaid Block Grants, Medicaid Eligibility, Medicaid Expansion, Medicaid Work Requirements, Medicare, Medicare 340B Drug Discount Program, Medicare Advantage, Medicare Cuts, Medicare Denials, Medicare Hospital Fund, Medicare Payment, Medicare Payment Advisory Commission (MedPAC), Medicare Reimbursement, Medicare Site Neutral Payment, Project 2025, State of the Union, Tax Exempt Debt, Tax Exempt Status • Leave a comment
https://www.healthcarefinancenews.com/news/what-trump-and-gop-have-planned-healthcare?leadId=1234536&mkt_tok=NDIwLVlOQS0yOTIAAAGYKMuOSDpr4HmVgwoir-sctcWYrTCmAMidk2ElOKJYQgYV2OewZexaTT7OGNmdoOgJX4esGPrurXZW_6oPMprQ0Mc5ph-PR7Pcrbc3LivGTNmd

Health systems are rightly concerned about Republican plans to cut Medicaid spending, end ACA subsidies and enact site neutral payments, says consultant Michael Abrams, managing partner of Numerof, a consulting firm.

“Health systems have reason to worry,” Abrams said shortly after President Donald Trump was inaugurated on Monday. 

While Trump mentioned little about healthcare in his inauguration speech, the GOP trifecta means spending cuts outlined in a one-page document released by Politico and another 50-pager could get a majority vote for passage.

Of the insurers, pharmaceutical manufacturers and health systems that Abrams consults with, healthcare systems are the ones that are most concerned, Abrams said.

At the top of the Republican list targeting $4 trillion in healthcare spending is eliminating an estimated $2.5 billion from Medicaid. 

“There’s no question Republicans will find savings in Medicaid,” Abrams said.

Medicaid has doubled its enrollment in the last couple of years due to extended benefits made possible by the Affordable Care Act, despite disenrolling 25 million people during the redetermination process at the end of the public health emergency, according to Abrams.

Upward of 44 million people, or 16.4% of the non-elderly U.S. population are covered by an Affordable Care Act initiative, including a record high of 24 million people in ACA health plans and another 21.3 million in Medicaid expansion enrollment, according to a KFF report. Medicaid expansion enrollment is 41% higher than in 2020.

The enhanced subsidies that expanded eligibility for Medicaid and doubled the number of enrollees are set to expire at the end of 2025 and Republicans are likely to let that happen, Abrams said. Eliminating enhanced federal payments to states that expanded Medicaid under the ACA are estimated to cut the program by $561 billion.

If enhanced subsidies end, the Congressional Budget Office has estimated that the number of people who will become uninsured will increase by 3.8 million each year between 2026 and 2034. 

The enhanced tax subsidies for the ACA are set to expire at the end of 2025. This could result in another 2.2 million people losing coverage in 2026, and 3.7 million in 2027, according to the CBO.

WHY THIS MATTERS

For hospitals, loss of health insurance coverage means an increase in sicker, uninsured patients visiting the emergency department and more uncompensated care.

“Health systems are nervous about people coming to them who are uninsured,” Abrams said. “There will be people disenrolled.”

The federal government allowed more people to be added to the Medicaid rolls during the public health emergency to help those who lost their jobs during the COVID-19 pandemic, Numerof said. Medicaid became an open-ended liability which the government wants to end now that the unemployment rate is around 4.2% and jobs are available.

An idea floating around Congress is the idea of converting Medicaid to a per capita cap and providing these funds to the states as a block grant, Abrams said. The cost of those programs would be borne 70% by the federal government and 30% by states.

This fixed amount based on a per person amount would save money over the current system of letting states report what they spent.

Another potential change under the new administration includes site neutral Medicare payments to hospitals for outpatient services.

The HFMA reported the site neutral policy as a concern in a list it published Monday of preliminary federal program cuts totaling more than $5 trillion over 10 years. The 50-page federal list is essentially a menu of options, the HFMA said, not an indication that programs will actually be targeted leading up to the March 14 deadline to pass legislation before federal funding expires.

Other financial concerns for hospitals based on that list include: the elimination of the tax exemption for nonprofit hospitals, bringing in up to $260 billion in estimated 10-year savings; and phasing out Medicare payments for bad debt, resulting in savings of up to $42 billion over a decade.

Healthcare systems are the ones most concerned over GOP spending cuts, according to Abrams. Pharmacy benefit managers and pharmaceutical manufacturers also remain on edge as to what might be coming at them next.

THE LARGER TREND

President Donald Trump mentioned little about healthcare during his inauguration speech on Monday.

Trump said the public health system does not deliver in times of disaster, referring to the hurricanes in North Carolina and other areas and to the fires in Los Angeles.

Trump also mentioned giving back pay to service members who objected to getting the COVID-19 vaccine.

He also talked about ending the chronic disease epidemic, without giving specifics.

“He didn’t really talk about healthcare even in the campaign,” Abrams said.

However, in his consulting work, Abrams said, “The common thread is the environment is changing quickly,” and that healthcare organizations need to do the same “in order to survive.”

The 20% Medicare cut coming for hospitals

Posted on by • Posted in Health Insurance Coverage Adequacy, Health Policy, Health System, Hospital, Hospital Industry, Medicare, Medicare Cuts, Medicare Reimbursement, Public Health Emergency (PHE) • Leave a comment
https://www.beckerspayer.com/policy-updates/the-20-medicare-cut-coming-for-hospitals.html?utm_medium=email&utm_content=newsletter

As the U.S. prepares to end the COVID-19 public health emergency, hospitals are facing a major cut in Medicare payments used to treat patients diagnosed with the disease.

Since January 2020, hospitals nationwide have received a 20 percent increase in the Medicare payment rate through the hospital inpatient prospective payment system to treat COVID-19 patients — that policy ends May 11.

The sunsetting of the three-year policy is a key concern for the AHA because of its financial implication for hospitals already struggling with increased labor costs and inflation. 

From January 2020 to November 2021, payments for the 1 million traditional Medicare patients hospitalized with COVID-19 totaled $23.4 billion, or more than $24,000 per patient, according to lobbying and law firm Brownstein.

The end of the policy also has the potential to increase medical costs for patients hospitalized with COVID-19. If patients must pay higher costs for COVID-19-related services, they may be less inclined to get tested or even seek treatment.

“It means there will be less testing in this country, and likely less treatment because not everyone can afford it,” Jose Figueroa, MD, assistant professor of health policy and management at the Harvard T.H. Chan School of Public Health, told Time Jan. 31. “Will this change the trajectory of the pandemic? It’s something we are going to have to watch.”

As of Feb. 8, the nation’s seven-day COVID-19 case average was 40,404, a 1 percent decrease from the previous week’s average. The rate of decrease has slowed in the last two weeks — the CDC’s last weekly report published Feb. 3 reported a 6.7 percent drop in cases.

The seven-day hospitalization average for Feb. 1-7 was 3,665, a 6.2 percent decrease from the previous week’s average and down from an 8.4 percent drop in cases a week prior.

Physical and Occupational Therapy Are on the Medicare Chopping Block

Posted on by • Posted in Evidence-Based Care, Health Policy, Interdisciplinary Care, Medicare, Medicare Cuts, Occupational Therapy, Physical Therapy, Rehospitalizations, Standard of Care • Leave a comment
https://www.medpagetoday.com/opinion/second-opinions/102198?xid=nl_mpt_DHE_2022-12-12&eun=g885344d0r&utm_source=Sailthru&utm_medium=email&utm_campaign=Daily%20Headlines%20Evening%202022-12-12&utm_term=NL_Daily_DHE_dual-gmail-definition

Americans expect the best care from their doctors. Decades of experience, thoughtful interdisciplinary planning, and evidence-based research mean providers are treating them based on widely accepted standards of care.

For example, someone who has experienced a heart attack would never be discharged from a hospital without being prescribed medications to mitigate future cardiac events. A patient with acute pulmonary issues would receive medications and resources for oxygen therapy, if appropriate. Stroke patients receive the acute hospital-based care they need to save their lives, as well as a constellation of other types of care and services to decrease complications and enhance recovery — pharmacological, dietary, and rehabilitative.

Physical therapy and occupational therapy are among the critical standards of care that would be included for all of these patients. These services help form the bedrock of ensuring good outcomes, decreasing secondary injury and complications, and reducing rehospitalizations.

In addition to serving as an important part of post-acute care, physical and occupational therapy provided by licensed therapists can help improve balance and mobility, improve cardiovascular function, reduce pain, and decrease falls. In fact, healthcare associated with falls costs the healthcare system tens of billions of dollars each year — and exercise interventions by physical therapists have helped to lower the risk of falls by 31%.

Eliminating or reducing access to physical and occupational therapy due to Medicare cuts would be devastating to patients’ health outcomes. Not only would it undermine the standards of care for many conditions, it would also complicate the lives and tenuous health situations of the millions of Americans who depend upon it.

Seniors nationwide, therefore, are extremely concerned about the 4.5% cut to their therapy providers in 2023 under the Medicare Physician Fee Schedule. If this cut is implemented, the physical and occupational therapy community will experience cuts totaling approximately 9% by 2024. The continued practice of annual Medicare cuts threatens the sustainability of the country’s physical and occupational providers, especially in rural and underserved areas where they are needed most.

Our nation’s Medicare beneficiaries understand how integral physical and occupational therapy are to standards of care — and they value it deeply. According to a recent survey, 9 out of 10 Americans over the age of 65 have favorable views of physical therapists, and the majority see considerable value in the services they provide. Nearly the same number (88%) expressed concerns that proposed Medicare payment cuts may eliminate alternatives for therapy outside of nursing homes and eliminate seniors’ ability to age in place. More than three in four respondents (76%) say it is important for them to be able to access their physical therapist when they cannot come into the office for an in-person appointment.

Care professionals across the healthcare continuum — from skilled therapists to physicians to nurse practitioners and physicians’ assistants — recognize the negative impact these cuts would have on their patients, and support efforts in Congress to address these cuts in the year ahead.

Bipartisan lawmakers in Congress have introduced legislation to block these harmful cuts from taking effect in 2023, an essential step toward ensuring all Americans can access quality physical therapy and other specialty services. The Supporting Medicare Providers Act of 2022 (H.R. 8800) would block Medicare’s Physician Fee Schedule cuts by providing an additional 4.42% to the conversion factor for 2023.

It’s inconceivable to think we can continue to provide thorough care without one of the most essential elements — therapy. We hope that Congress will act — and quickly before the end of the year — so that our critically important healthcare standards for patients suffering from a multitude of diseases, injuries, and conditions are not irrevocably undermined.

CMS finalizes 2023 payment rules this week, including a 4.5 percent physician pay cut

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Health Policy, Health System, Hospital, Hospital Industry, Medicare, Medicare Cuts, Medicare Shared Savings Program (MSSP), Physician Reimbursement, Sustainable, Sustainable Growth Rate (SGR) • Leave a comment

https://mailchi.mp/46ca38d3d25e/the-weekly-gist-november-4-2022?e=d1e747d2d8

Physicians are set to see a 4.5 percent decrease in Medicare payment next year, in part due to the expiration of a temporary payment boost that was passed by Congress in December 2021 to avert scheduled sequester cuts. Physician groups are expected to lobby lawmakers heavily in the final months of the year, hoping to secure a reprieve, especially as inflation and labor costs continue to rise.

Other changes in the 2023 rules include advance payments to new participants in the Medicare Shared Savings Program, intended to boost participation of providers in rural and underserved areas. Some pandemic-era telehealth flexibilities that are set to expire with the end of the federal COVID public health emergency were also extended. 

The Gist: We do not expect the full Medicare physician reimbursement cut to physicians to go into effect, as a bipartisan group of Senators has already asked leadership to address it in the upcoming lame-duck session. However, the cut serves the important purpose of rebasing negotiations between physician lobbies and Congress, such that keeping rates flat or obtaining a small boost would feel like a win for both groups—even if it falls far short of the rate increases needed to meet the rising cost of running a practice.

If Congress continues to intervene to push off or mitigate Medicare’s sequestration payment reductions, we could find ourselves back in a Sustainable Growth Rate (SGR)-type situation where a payment cut constantly looms, physicians continually lobby for yet another reprieve, and the delayed cuts balloon in size. 

GOP floats Medicare changes while ducking details

Posted on by • Posted in Health Policy, Healthcare Reform, Medicare, Medicare Cuts, Partisanship • Leave a comment

https://www.axios.com/2022/11/03/gop-floats-medicare-reform

Some House Republicans aren’t waiting for the election to think about overhauling Medicare. But it’s hard to tell if there are specifics behind the talking point.

Why it matters: Past GOP attempts to cut Medicare landed with a thud, and Democrats in recent weeks have been hammering on the message that Republicans are intent on gutting the program.

  • The critical moment could be next year’s talks on the debt ceiling, if Republicans flip one or both houses of Congress.

What they’re saying: “If we’re going raise the debt ceiling, we can’t just raise it without focusing on some way to address the debt and the deficit,” Rep. Bruce Westerman (R-Ark.), a member of the House GOP’s health care task force, told Axios, adding Medicare should be made “sustainable over time.”

  • “We’re going to have a lot of hearings on this,” Rep. Jason Smith (R-Mo.), the current top Republican on the Budget Committee who wants to move up to chairman of Ways and Means, told Axios. “I’m not going to get into the inner details.”
  • “Everything is on the table, we haven’t really nailed down any specific policies one way or the other,” Rep. Buddy Carter (R-Ga.), who is running to chair the House Budget panel. “I think it could be wrapped up with that [debt ceiling talks], that’s shaping up to be pretty dynamic.”

Yes, but: Not all Republicans are eager to kick off their time in the majority with another grinding health care fight against a Democratic president. Health policy experts are also skeptical of how realistic Medicare reform may be, recalling failed GOP agendas from the pre-Trump years.

  • Senate GOP Leader Mitch McConnell (R-Ky.) earlier this year rebuked a plan from Sen. Rick Scott (R-Fla.) that would sunset all federal legislation every five years — including entitlement programs. McConnell told reporters a plan that “sunsets Social Security and Medicare within five years … will not be part of the Republican Senate majority agenda.”
  • House GOP Leader Kevin McCarthy (R-Calif.) raised eyebrows when he told Punchbowl News last month that he wouldn’t “predetermine” if Medicare and Social Security would be involved in talks on raising the debt ceiling. McCarthy later tried to clarify in a CNBC interview that “I never mentioned Social Security or Medicare.”
  • Joseph Antos, a senior fellow and health care scholar at the American Enterprise Institute, puts the odds of Medicare reform as “pretty unlikely,” adding, “I don’t see any major changes happening over the next two years, and I think Republicans might wait to see what Medicare policies the Republican presidential candidate will push.”

The big picture: While a GOP Medicare push is not certain, Democrats are seizing on the possibility.

  • “They’re coming after your Social Security and Medicare in a big way,” President Biden said Tuesday in a speech in Florida, saying Republicans would create “chaos” by risking government default over demands to raise the debt limit next year.

Between the lines: Republicans are not being specific about the changes they would push. But there’s a limited universe of possibilities.

  • The proposed budget of the Republican Study Committee, an influential group of House Republicans, includes proposals like raising the Medicare eligibility age to 67 to align with Social Security, and converting Medicare to a “premium support” system where seniors received a subsidy they could use on private plans competing against traditional Medicare.
  • Tricia Neuman, a Medicare expert at the Kaiser Family Foundation, said such a policy would have “uneven” results, where “some could save money but others might have to pay a whole lot more.”
  • Other GOP-backed Medicare changes are less partisan, like “site neutral” reforms to pay hospital outpatient departments the same rates as doctors’ offices, though hospitals oppose those measures.
  • The Committee for a Responsible Federal Budget, recently issued a fiscal blueprint to reduce the budget deficit, which included reforms such as changing Medicare provider payments, benefit design and payroll taxes, but included nothing about changing eligibility requirements.

The bottom line: Republicans point to the Medicare trust fund’s projected insolvency date in 2028 to argue change is needed to make the program sustainable. But any change is hard, and cuts that hit beneficiaries are not the only way to seek savings.

  • “McCarthy won’t shoot down talk of addressing debt because it matters to him and his caucus, and you can’t do debt without entitlement reform, but he knows at this point there’s no interest from Democrats, and any entitlement reform will require serious political capital from Ds and Rs,” said a former GOP leadership aide. “The last time those conversations happened in a meaningful way was in 2011.”

H.R.8800 – Supporting Medicare Providers Act of 2022

Posted on by • Posted in Advocacy, H.R.8800 - Supporting Medicare Providers Act of 2022, Health Policy, Health System, Hospital, Hospital Industry, Legislative Agenda, Medicare, Medicare Cuts, Medicare Physician Fee Schedule (MPFS) • Leave a comment
https://www.congress.gov/bill/117th-congress/house-bill/8800?s=1&r=1

Due to the ongoing recess leading to the midterm elections, very important legislation introduced in September, H.R. 8800 – Supporting Medicare Providers Act of 2022, has stalled.

This critical, bipartisan legislation would stabilize Medicare for physicians and patients because it:

  1. Stops the 4.42% of the Medicare cuts related to the budget neutrality adjustment in the Medicare Physician Fee Schedule (MPFS), helping to buoy physician practices that are still recovering from the pandemic;
  2. Protects patients access to care, particularly in underserved communities; and
  3. Provides a commitment to long-term Medicare payment reform.

CMS Releases 2023 MPFS Proposed Rule

Posted on by • Posted in Alternative Payment Model, Center for Medicare and Medicaid Services (CMS), Conversion Factor, Hospital Based Physicians, Medicare, Medicare Cuts, Medicare Sequestration, MIPS Value Pathways (MVPs), Physician, Physician Reimbursement, Quality Payment Program (QPP), Relative Value Units (RVU), Telemedicine Reimbursement • Leave a comment

Click to access 72f59ed7-692d-4f32-a3a8-da32d65c2ac7.pdf

On July 7, 2022, the Centers for Medicare & Medicaid Services (CMS) released the 2023 Medicare Physician Fee Schedule (MPFS) proposed rule, which includes payment provisions and policy changes to the Quality Payment Program (QPP) and Alternative Payment Model (APM) participation options and requirements for 2023.

MPFS Key Proposals and Additional Potential Medicare Reductions:

For 2023, CMS proposes a Conversion Factor (CF) of $33.0775 which is a decrease of $1.53 or -4.42% from the 2022 conversion factor of 34.6062.

  • This significant reduction in the CF accounts for the expiration of the 3.00% increase in PFS payments for CY 2022 as required by the Protecting Medicare and American Farmers from Sequester Cuts Act, in addition to the statutorily required budget neutrality adjustment to account for changes in Relative Value Units.
  • The separately calculated Anesthesia CF is proposed at 20.7191, a -3.91% decrease from the 2022 conversion factor of $21.5623.

Key Takeaways:
CMS estimates an impact to allowed charges from policy changes in the rule as outlined below. These impacts are due in part due changes in the RVUs and the second year of the transition to clinical labor pricing updates.


(Please note: These estimates do not include the impact on payments from the expiration of the congressionally mandated 3.00% boost to the 2022 CF.)

  • Anesthesiology: -1%
  • Diagnostic Radiology: -3%
  • Interventional Radiology: -4%
  • Emergency Medicine: +1%
  • Critical Care: +1%
  • Nuclear Medicine: -3%
  • Pathology: -1%
  • Radiation Oncology/Therapy Centers: -1%
  • Internal Medicine: +3%
  • Independent Laboratory -1%

Additional Potential Medicare Reductions:

  • In addition to the proposed cut to the CF, the second of two sequestration cuts was implemented on July 1, 2022, at -1%, bringing the total sequestration cut to -2% which will continue without Congressional intervention. 
  • Also, the lack of full funding of the American Rescue Plan meant that the Medicare program would contribute 4% under the “PAYGO” (Pay as You Go) rules and that cut will come back into the Medicare fee schedule in 2023. In total, hospital-based physicians face in the approximate range of -10% in 2023 without Congressional intervention.  

Appropriate Use Criteria (AUC):
CMS did not address the appropriate use criteria (AUC)/clinical decision support (CDS) mandate for
advanced diagnostic imaging services in this rule. CMS posted an update on its website indicating that
the current educational and operations testing period will continue beyond January 1, 2023, even if the
COVID-19 public health emergency (PHE) ends in 2022. The notice states that the agency is unable to
forecast when the payment penalty phase of the program will begin. Read more at CMS.gov.


Additional highlights of the MPFS Proposed Rule include:
Evaluations and Management (E/M) Services:
As part of the ongoing updates to E/M visits and the related coding guidelines that are intended to
reduce administrative burden, the AMA CPT Editorial Panel approved revised coding and updated
guidelines for Other E/M visits, effective January 1, 2023.


Like the approach CMS finalized in the CY 2021 MPFS final rule for office/outpatient E/M visit coding and
documentation, CMS is proposing to adopt most changes in coding and documentation for Other E/M
visits including: hospital inpatient, hospital observation, emergency department, nursing facility, home
or residence services, and cognitive impairment assessment, effective January 1, 2023. This revised
coding and documentation framework would include CPT code definition changes (revisions to the
Other E/M code descriptors), and for the first time would mean that AMA CPT and CMS would follow
the same coding guidelines, including:


• New descriptor times (where relevant).
• Revised interpretive guidelines for levels of medical decision making.
• Choice of medical decision making or time to select code level (except for services such as
emergency department visits (time has never been a component of ED E/M services except
critical care) and cognitive impairment assessment, which are not timed services).
• Eliminated use of history and exam to determine code level (instead there would be a
requirement for a medically appropriate history and exam).


Split (or Shared) Visits (Where services are performed by advance practice clinicians.)
CMS had previously finalized in the 2022 MPFS final rule a new January 1, 2023 billing policy for
instances in which a physician delivers an E/M service along with an advanced practice clinician (APC).
Recall that E/M services billed under an APC reimburse at 85% of the MPFS unless there is a
documented shared service by the supervising physician.

• The key determinant for deciding if there was a shared service is if the physician provided key
elements of the history, exam, or medical decision making ─ OR half of the total time spent
treating the patient.
• There were significant concerns that in hospital-based settings, the rule (set for implementation
on January 1, 2023) would have required only time as the determinative element, and that the
majority of APC services would then be reimbursed at 85% of the fee schedule. After significant
advocacy by multiple stakeholders, CMS has delayed the policy that would have based the
determination of the billing practitioner solely on time. This policy is proposed for delay until
January 1, 2024 while CMS collects additional input.


Expand Telehealth Coverage:
• CMS is proposing making several services that are temporarily available as telehealth services
for the PHE available through CY 2023 on a Category III basis, which will allow more time for
collection of data that could support their eventual inclusion as permanent additions to the
Medicare telehealth services list.
• CMS is also proposing to extend the duration of time that services are temporarily included on
the telehealth services list during the PHE, but are not included on a Category I, II, or III basis for
a period of 151 days following the end of the PHE, in alignment with the Consolidated
Appropriations Act, 2022 (CAA, 2022).


Highlights of the Quality Payment Program (QPP):
CMS stated they are limiting proposals for traditional MIPS and focusing on further refining
implementation of MIPS Value Pathways (MVPs).
2023 Proposed Performance Threshold and Performance Category Weights:
The performance threshold for the 2023 performance year is proposed to be 75 points, same as 2022.
• Beginning with 2023, CMS will no longer offer an exceptional performance adjustment.
• The category weights for the 2023 performance year are proposed to remain the same as the
2022 weights:
o Quality – 30%,
o Cost – 30%
o Promoting interoperability – 25%
o Improvement Activities – 15%


Data Completeness Requirements:
• For 2023, CMS is proposing quality measure submissions should continue to account for at least
70% of total exam volume – same as 2022.

• CMS proposed to increase this threshold to 75% beginning with the 2024 and 2025 performance
years.


Quality Category – Measure Scoring System
• Beginning with 2023 CMS will change the scoring range for benchmarked measures to 1 to 10
points, doing away with the 3-point floor.
• Score existing non-benchmarked measures at 0 points even if data completeness is met
• New measures will continue to be scored at a minimum of 7 points for their first year and a
minimum of 5 points in their second year.
• CMS is maintaining the small practice bonus of 6 points that is included in the Quality
• performance category score.
• CMS also continues to award small practices 3 points for submitted quality measures that do not
meet case minimum requirements or do not have a benchmark.


MIPS Value Pathways (MVPs)
CMS is proposing 5 new MVPs and revising the 7 previously established MVPs that would be available
beginning with the 2023 performance year.
• Advancing Cancer Care
• Optimal Care for Kidney Health
• Optimal Care for Patients with Episodic Neurological Conditions
• Supportive Care for Neurodegenerative Conditions
• Promoting Wellness


Advanced Alternative Payment Models
For payment years 2019 through 2024, Qualifying APM Participants (QPs) receive a 5 percent APM
Incentive Payment. After performance year 2022, which correlates with payment year 2024, there is no
further statutory authority for a 5 percent APM Incentive Payment for eligible clinicians who become
QPs for a year.


CMS is concerned that the statutory incentive structure under the QPP beginning in the 2023
performance year. corresponding 2025 payment year, could lead to a drop in Advanced APM
participation, and a corresponding increase in MIPS participation. As a result, CMS concluded that it
would forego action for the 2023 performance period and 2025 payment year. They instead are seeking
public input in identifying potential options for the 2024 performance period and 2026 payment year of
the QPP.

For one more year, Medicare says there is no Central Jersey, saving hospitals $100M

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Health Policy, Health System, Hospital, Hospital Industry, Medicare, Medicare Cuts, Medicare Statistical Area, Medicare Wage Index, State Hospital Association • Leave a comment

https://www.app.com/story/news/health/2021/05/01/central-jersey-disappears-medicare-says-saving-nj-hospitals-100-m/4892942001/

Medicare saves hospitals more than $100M by denying Central Jersey

Hospitals in Monmouth, Ocean and Middlesex counties will continue to receive New York City-level reimbursement rates from Medicare for another year, avoiding more than $100 million in potential cuts, New Jersey lawmakers said Friday.

The decision by the U.S. Centers for Medicare and Medicaid Services gives the hospitals a year to convince the Biden administration that for them, at least, there is no such thing as Central Jersey.

CMS released its decision as part of its final rules for fiscal 2022. It delayed a Trump-era proposal to move the hospitals out of the New York-Newark-Jersey City region and into the newly crafted New Brunswick-Lakewood core-based statistical area.

Any Central New Jersey designation usually is met locally with pride and joy, but this move came with a steep price. Hospitals’ Medicare reimbursements are tied in part to their labor costs. And the labor costs in their new region are about 17% lower than their old region.

The cuts in reimbursement rates would have saved money for federal taxpayers, but they also would have hit local hospitals hard. The industry during the pandemic was faced with higher expenses and forced to delay lucrative elective procedures. 

As a result, 41% of New Jersey hospitals were losing money, according to the New Jersey Hospital Association, a trade group.

The group on Friday thanked the state’s congressional delegation for its help.

“NJHA has strongly advocated for the reversal of this ill-advised policy since it was first implemented last year, and this delay in further cuts in critical health care dollars to our state is welcomed news,” Cathy Bennett, the association’s president and chief executive officer, said. 

U.S. Sen. Robert Menendez and U.S. Rep. Bill Pascrell Jr., both Democrats, led the campaign to stop the new classification at least until the 2020 U.S. Census data was released.

In a letter a month ago to U.S. Health and Human Services Secretary Xavier Becerra, the lawmakers said hospitals moved to the new statistical areas would have lost revenue, making it tougher to compete with hospitals in New York and northern New Jersey to attract skilled workers.

“This federal support will benefit patients by allowing our top-notch hospitals to retain and hire the best and the brightest,” Pascrell said in a statement Friday.