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.
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 ofrebasing 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.
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.”
This critical, bipartisan legislation would stabilize Medicare for physicians and patients because it:
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;
Protects patients access to care, particularly in underserved communities; and
Provides a commitment to long-term Medicare payment reform.
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.)
Diagnostic Radiology: -3%
Interventional Radiology: -4%
Emergency Medicine: +1%
Critical Care: +1%
Nuclear Medicine: -3%
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.
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.
In a vote of 384-38, the House on Tuesday passed a bill that eliminates the 2% cut to Medicare payments until the end of 2021. However, the bill proposes to offset the change by increasing the sequester cuts in 2030.
WHY THIS MATTERS
The cuts were triggered by a federal budget sequestration.
Hospitals, physicians and other providers protested the 2% cuts as coming at a time when they were struggling financially and clinically to handle the COVID-19 pandemic.
The bill also makes several technical changes to the rural health clinic provisions that were included in the Consolidated Appropriations Act. Specifically, the CAA required that the payment rate for RHCs, including provider-based RHCs certified after Dec. 31, 2019, to be capped at $100 per visit, starting from April 1, 2021.
This rate will increase over time based on the Medicare Economic Index, but will remain well below typical provider-based RHC rates. The bill would correct the Dec. 31, 2019, date to Dec. 31, 2020, and include both Medicare-enrolled RHCs located in a hospital with less than 50 beds and RHCs that have submitted an application for Medicare enrollment as of this date, according to the AHA.
THE LARGER TREND
Last year, Congress paused the 2% Medicare cuts, but they were to resume on April 1.
The Centers for Medicare and Medicaid Services instructed Medicare administrative contractors to hold all claims with dates of service on or after April 1 for a short period until potential legislation was enacted.
In March, the House passed the bill to delay the cuts, and the Senate approved it later that month, but with an amendment to delay through December 31 and ensure that the cost of the delay is paid for.
Providers have reacted positively to the news.
American Hospital Association president and CEO Rick Pollack said, “Even though our country is making great progress by vaccinating millions of people a day, it is clear that this pandemic is far from over and that there is an urgent need to keep hospitals, health systems and our heroic caregivers strong.”
American Medical Association president Dr. Susan R. Bailey said, “The Senate and House, Democrats and Republicans, have overwhelmingly acknowledged that cutting Medicare payments during a pandemic is ill-conceived policy. Physician practices are already distressed, and arbitrary 2% across-the-board Medicare cuts would have been devastating.”
America’s Essential Hospitals SVP of policy and advocacy Beth Feldpush said, “Extending the moratorium through the end of this year provides much-needed relief for essential hospitals, which continue to face heavy financial pressure from their frontline response to COVID-19. The sequester would weaken the ability of our hospitals to care for the communities of color that have suffered disproportionately from the pandemic.”
— At stake: scheduled payment reductions totalling $54 billion
Healthcare groups are applauding efforts being made in Congress to stop two different cuts to the Medicare budget — both of which are due to “sequestration” requirements — before it’s too late.
One cut, part of the normal budget process, is a 2% — or $18 billion — cut in the projected Medicare budget under a process known as “sequestration.” Sequestration allows for prespecified cuts in projected agency budget increases if Congress can’t agree on their own cuts. Medicare’s budget had been slated for a 2% sequester cut in fiscal year 2020; however, due to the pandemic and the accompanying increased healthcare needs, Congress passed a moratorium on the 2% cut. That moratorium is set to expire on April 1.
Another projected cut — this one for 4%, or $36 billion — will be triggered by the COVID relief bill, formally known as the American Rescue Plan Act. That legislation, which President Biden signed into law last Thursday, must conform to the PAYGO (pay-as-you-go) Act, which requires that any legislation that has a cost to it that is not otherwise offset must be offset by sequestration-style budget cuts to mandatory programs, including Medicare.
There are now several bills in Congress to address these pending cuts. H.R. 1868, co-sponsored by House Budget Committee chairman John Yarmuth (D-Ky.), House Ways & Means Committee chairman Richard Neal (D-Mass.), and House Energy & Commerce Committee chairman Frank Pallone Jr. (D-N.J.), among others, would get rid of the PAYGO Act requirement and extend the 2% Medicare sequester moratorium through the end of 2021.
Another bill, H.R. 315, introduced in January by Reps. Bradley Schneider (D-Ill.) and David McKinley (R-W.Va.), would extend the 2% sequester moratorium until the end of the public health emergency has been declared. In the Senate, S. 748, introduced Monday by senators Susan Collins (R-Maine) and Jeanne Shaheen (D-N.H.) would do the same.
“For many providers, the looming Medicare payment cuts would pose a further threat to their ability to stay afloat and serve communities during a time when they are most needed,” Shaheen said in a press release. “Congress should be doing everything in its power to prevent these cuts from taking effect during these challenging times, which is why I’m introducing this bipartisan legislation with Senator Collins. I urge the Senate to act at once to protect our health care providers and ensure they can continue their work on the frontlines of COVID-19.”
Not surprisingly, provider groups were happy about the actions in Congress. “MGMA [Medical Group Management Association] supports recent bipartisan, bicameral efforts to extend the 2% Medicare sequester moratorium for the duration of the COVID-19 public health emergency,” said Anders Gilberg, senior vice president for government affairs at MGMA, in a statement. “Without congressional action, the country’s medical groups will face a combined 6% sequester cut — a payment cut that is unsustainable given the financial hardships due to COVID-19 and keeping up with the cost of inflation.”
Leonard Marquez, senior director of government relations and legislative advocacy at the Association of American Medical Colleges, said in a statement that it was “critical” that Congress extend the 2% sequester moratorium “to help ensure hospitals, faculty physicians, and all providers have the necessary financial resources to continue providing quality care to COVID-19 and all patients ... While we are making progress against COVID-19, cutting provider payments in the middle of a pandemic could jeopardize the nation’s recovery.”
The American Medical Association (AMA) also urged Congress to prevent both the 2% and the 4% Medicare cuts. “We strongly oppose these arbitrary across-the-board Medicare cuts, and the predictably devastating impact they would have on many already distressed physician practices,” AMA executive vice president and CEO James Madara, MD, said in a letter sent to congressional leaders at the beginning of March.
“And, while Medicare spending on physician services partially recovered from the April low, it was still 12% less than expected by the end of June 2020,” he continued. “During the first half of 2020, the cumulative estimated reduction in Medicare physician spending associated with the pandemic was $9.4 billion (19%). Results from an earlier AMA-commissioned survey of 3,500 practicing physicians conducted from mid-July through August 2020 found that 81% of respondents were still experiencing lower revenue than before the pandemic.”
Not everyone is a fan of extending the 2% cut moratorium, however. “Bad idea,” said James Capretta, resident fellow at the American Enterprise Institute, a right-leaning think tank, at an event Tuesday on Medicare solvency sponsored by the Bipartisan Policy Center. “There’s plenty of give in the revenue streams of these systems that creating a precedent where we’re going to go back to the pre-sequester level — it’s better to move forward and if there are struggling systems out there, deal with it on an ad hoc basis rather than just across the board paying out a lot more money, which I don’t think is necessary.” He added, however, that he agreed with the bill to get rid of the 4% cut. “The bigger cut associated with PAYGO enforcement I think would be too much.”