With a closely divided Congress, President Biden has leaned heavily on regulatory actions to advance his healthcare priorities. With the midterm elections fast approaching, the graphic above assesses the impact of those actions, and outlines which legislative components Democrats may still try to pass before November.
From the start, the administration has signaled the importance of promoting competition in healthcare markets, and has devoted more scrutiny to hospital mergers—while leaving most attempts at vertical integration unchallenged. Through Medicaid waivers, it has worked to expand insurance coverage, rolling back Trump-era work requirements, expanding postpartum coverage, and encouraging states to experiment with public option plans on the Affordable Care Act (ACA) exchanges.
The Centers for Medicare and Medicaid Services (CMS) has continued the steady march toward value programs, revising the Direct Contracting model to factor in health equity. Despite these incremental moves, Medicare Advantage (MA) remains the focus of long-term efforts to control Medicare spending, and MA programs have seen payments boosts year-over-year.
Meanwhile, the fate of President Biden’s signature healthcare campaign promises remains in the hands of an intransigent Congress. Senate Democrats are currently trying to negotiate a deal on a bill allowing Medicare drug negotiations and extending ACA subsidies, an important provision to protect millions from receiving premium hike notices just weeks before Election Day.
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 Biden administration recently signaled that it will extend the federal COVID-19 public health emergency (PHE), which has been in place for nearly two-and-a-half years, beyond its current July 15 expiration date. As shown in the graphic above, a number of key pandemic-era policies would end if the PHE were discontinued. Hospitals, already experiencing financial challenges, would face an immediate 20 percent reduction in Medicare reimbursement for each hospitalized COVID patient.
Combined with the end of funding for treating uninsured COVID patients, and with millions of Americans expected to lose Medicaid coverage when eligibility checks restart, the cost of treating COVID patients will fall more heavily on providers. More treatment costs will also be passed on to patients, as most private insurers no longer waive cost-sharing for COVID care.
On the telemedicine front, Congress has temporarily extended some Medicare telehealth flexibilities (including current payment codes and coverage for non-rural beneficiaries) for five months after the PHE ends, while CMS studies permanent coverage options. But further Congressional action will be required to keep current Medicare telehealth coverage in place, and these decisions will surely influence private insurers’ telehealth reimbursement policies.
Although the Biden administration promises that it will provide sixty days’ notice before terminating the PHE or letting it expire, providers must prepare for the inevitable financial hit when the PHE ends.
A Colorado mom got quite the shock when she received a hefty “facility fee” bill for her toddler’s telehealth appointment.
Brittany Tesso said she had already paid a bill from Children’s Hospital Colorado for $676.86 for the 2-hour virtual visit for her 3-year-old son to determine if he required speech therapy, according to a report by KDVR, a Colorado TV station.
But 2 weeks later, she received a separate bill for an additional $847.35, leading Tesso to tell the station: “I would’ve gone elsewhere if they had told me there was an $850 fee, essentially for a Zoom call.”
Tesso said she was told the additional amount was for a “facility fee.”
“I was like, ‘Facility fee? I didn’t go to your facility,'” Tesso told the station. “I was at home and, as far as I could tell, some of the doctors were at home too.” Tesso said she was told by a hospital representative that it charges the same fee whether patients come to the facility or receive care via telehealth.
KDVR had reported an earlier story of a father who said he was charged a $503 facility fee after his son was seen at a medical practice in a building owned by Children’s Hospital Colorado, and roughly 20 viewers reached out to the news outlet about their similar experiences.
Tesso told KDVR that she believed the second bill was a surprise bill, and suggested that state lawmakers could do more to prevent such instances. An HHS rule banning surprise billing went into effect on January 1 of this year.
Adam Fox, deputy director at the Colorado Consumer Health Initiative, told KDVR that patients have little recourse because there are no regulations in the state regarding facility fees charged by hospitals.
In a statement provided to KDVR, Children’s Hospital Colorado said that the issue was not exclusive to the hospital, and that it continually looks at its own practices “to see where it can adjust and improve.”
The hospital added in the statement that it continues “to advocate for state and federal policies that address healthcare consumer cost concerns through more affordable and accessible insurance coverage and hospital and provider price transparency, while also defending children’s access to care and the unique needs of a pediatric hospital.”
In response to a MedPage Today request for comment, the hospital said it had no further information to share.
Telehealth is likely to remain a mainstay in healthcare delivery, according to a December Kaiser Health News (KHN) article, but experts also told KHN that it’s not yet clear how such appointments, and any accompanying facility fees, will be handled moving forward.
A bipartisan group of senators have introduced a bill to make telehealth reimbursement permanent for certain services such as those provided by physical therapists, audiologists, occupational therapists and speech language pathologists.
Sens. Steve Daines (R-Mont.), Tina Smith (D-Minn.), Jerry Moran (R-Kan.) and Jacky Rosen (D-Nev.) introduced the “Expanded Telehealth Access Act” on Thursday, according to The Hill.
If passed, the legislation would extend telehealth reimbursement policies that were temporarily added during the COVID-19 public health emergency.
WHY THIS MATTERS
The Centers for Medicare and Medicaid Services has long said that Congressional action is needed to make emergency telehealth measures permanent.
But on Tuesday, CMS released new actions that will allow Medicare to pay for mental health virtual visits furnished by Rural Health Clinics and Federally-Qualified Health Centers. This is through telecommunications technology such as audio-only telehealth calls.
Telehealth is particularly important for rural areas where patients may have to travel long distances for care.
The Senate bill has the support of the American Telehealth Association, the American Physical Therapy Association, the American Speech-Language-Hearing Association and the American Occupational Therapy Association, among others, according to the report.
The biggest issue in telehealth reimbursement remains. This is whether providers will be continued to be paid at in-person parity for a telehealth visit.
THE LARGER TREND
The Senate Bill is a companion to a House bill introduced in March by Rep. Mikie Sherrill (D-NJ) called the Expanded Telehealth Access Act.
In May, Senator Daines, one of the sponsors of Thursday’s legislation, with Senator Catherine Cortez Masto (D-Nev.), proposed the “Telehealth Expansion Act of 2021” to permanently allow first-dollar coverage of virtual care under high-deductible health plans.
The Medicare Act “prohibits Medicare payment for services that are not furnished within the United States,” according to the filing.
RemoteICU, a telemedicine provider group, is suing the Department of Health and Human Services and the Centers for Medicare and Medicaid Services for not reimbursing telehealth services provided by physicians who are located outside the United States, according to a federal lawsuit filed last week in Washington.
RICU wants reimbursement for telehealth services provided within the U.S., but not necessarily by a physician who lives within its borders.
The company employs physicians who live outside the country, but are U.S. board-certified critical-care specialists and licensed in one or more U.S. jurisdictions. With RICU’s telecommunications system, these physicians can provide critical-care services in U.S. hospital ICUs, the lawsuit said.
“Although RICU’s physicians live abroad, they serve as full-time, permanent staff members of the U.S. hospitals at which they serve patients,” the company said in the court filing.
“By employing U.S.-licensed intensivists who live overseas, RICU has enabled the American healthcare system to recapture talent that would otherwise be lost to it – and this has helped to alleviate the ongoing shortage of intensivists in American hospitals.“
However, after the company reached out to several officials from HHS and CMS, it was notified that Medicare could not reimburse the client hospitals for RICU’s services, because the Medicare Act “prohibits Medicare payment for services that are not furnished within the United States,” according to the filing.
The company is seeking a preliminary injunction to stop HHS and CMS from denying Medicare reimbursement for telehealth services on the basis of a provider’s physical location outside of the United States at the time of service.
WHAT’S THE IMPACT?
RICU claims that, by failing to reimburse for the critical care telehealth services provided by its physicians, HHS and CMS are causing “immediate harm both to RICU and to the public.”
It argues that it’s filling a gap in critical care that has been exacerbated by the pandemic.
“There remains [a] significant unmet need for critical care services, as desperately sick patients have overwhelmed ICU resources across the country,” RICU said in the court filing.
“In some cases, lack of adequate care can mean the difference between life or death. And one of the groups most at risk from death and serious illness due to COVID-19 is the elderly – the very same population that relies upon Medicare.”
Without reimbursement, RICU says that some of its current clients, as well as potential customers, will not be able to offer its services.
The company argues that this causes “significant, unrecoverable monetary damages” because tele-ICU providers that use physicians located within the U.S. are eligible for reimbursement and therefore have a competitive edge over RICU.
Further, it says that it has already begun losing business because of hospitals’ inability to receive Medicare reimbursement.
“The Critical Care Ban is causing irreparable harm to RICU, which is suffering ongoing financial and reputational harms that cannot be remedied in the future,” the court filing said.
“The balance of the equities favors an injunction, because Defendants have already admitted that there is a desperate medical need for the critical care that RICU would provide but for the Critical Care Ban.
“And, finally, preliminary injunction would be in the public interest because, across the United States, Americans stricken by the COVID-19 pandemic are in desperate need of critical care – a need that RICU can help meet. It is not hyperbole to say that the requested injunctive relief is in the public interest because it could save lives.”
Members of an influential congressional advisory committee on Medicare are torn on how best to regulate telehealth after the COVID-19 public health emergency, hinting at the difficulty Washington faces as it looks to impose guardrails on virtual care without restricting its use after the pandemic ends.
During a Thursday virtual meeting, the Medicare Payment Advisory Commission expressed its support of telehealth broadly, but many members noted snowballing use of the new modality could create more fraud and abuse in the system down the line.
Key questions of how much Medicare reimburses for telehealth visits and what type of visits are paid for won’t be easily answered, MedPAC commissioners noted. “This is a really, really difficult nut to crack,” Michael Chernew, MedPAC chairman and a healthcare policy professor at Harvard Medical School, said.
Virtual care has kept much of the industry running during the coronavirus pandemic, allowing patients to receive needed care at home. Much of this was possible due to the declaration of a public health emergency early 2020, allowing Medicare to reimburse for a greater swath of telehealth services and nixing other restrictions on virtual care.
However, much of that freedom is only in place for the duration of the public health emergency, leaving regulators and legislators scrambling to figure which new flexibilities they should codify, and which perhaps are best left in the past along with COVID-19.
It’s a tricky debate as Washington looks to strike a balance between keeping access open and costs low.
In a Thursday meeting, MedPAC debated a handful of policy proposals to try and navigate this tightrope. Analysts floated ideas like making some expansions permanent for all fee-for-service clinicians; covering certain telehealth services for all beneficiaries that can be received in their homes; and covering telehealth services if they meet CMS’ criteria for an allowable service.
But many MedPAC members were wary of making any concrete near-term policy changes, suggesting instead the industry should be allowed to test drive new telehealth regulations after COVID-19 without baking them in permanently.
“I don’t think what we’ve done with the pandemic can be considered pilot testing. I think a lot of this is likely to go forward no matter what we do because the gate has been opened, and it’s going to be really hard to close it,” Marjorie Ginsburg, founder of the Center for Healthcare Decisions, said. But “I see this just exploding into more fraud and abuse than we can even begin imagining.”
Paul Ginsburg, health policy chair at the Brookings Institution, suggested a two-year pilot of any changes after the public health emergency ends.
However, it would be “regressive” to roll back all the gains virtual care has made over the past year, according to Jonathan Perlin, CMO of health system HCA.
“These technologies are such a part of the environment that at this point, I fear [it] would be anachronistic not to accept that reality,” Perlin said.
Among other questions, commissioners were split on how much Medicare should pay for telehealth after the pandemic ends.
That parity debate is perhaps the biggest question mark hanging over the future of the industry. Detractors argue virtual care services involve lower practice costs, as remote physicians not in an office don’t need to shell out for supplies and staff. Paying at parity could distort prices, and cause fee-for-service physicians to prioritize delivering telehealth services over in-person ones, some commissioners warned.
Other MedPAC members pointed out a lower payment rate could stifle technological innovation at a pivotal time for the healthcare industry.
MedPAC analysts suggested paying lower rates for virtual care services than in-person ones, and paying less for audio-only services than video.
Commissioners agreed audio-only services should be allowed, but that a lower rate was fair. Commissioner Dana Gelb Safran, SVP at Well Health, suggested CMS should consider outlining certain services where video must be used out of clinical necessity.
Previously, telehealth services needed a video component to be reimbursed. Proponents argue expanded access to audio-only services will improve care access, especially for low-income populations that might not have the broadband access or technology to facilitate a video visit.
Another major concern for commissioners is how permanently expanding telehealth access would affect direct-to-consumer telehealth giants like Teladoc and Amwell. If all telehealth services delivered at home are covered, that could allow the private companies to “really take over the industry,” Larry Casalino, health policy chief in the Weill Cornell Department of Healthcare Policy and Research, said.
Because of the lower back-end costs for virtual care than in-office services, paying vendors the same rate as in-office physicians could drive a lot of brick-and-mortar doctors out of business, commissioners warned.