/ en Sat, 26 Apr 2025 00:09:41 -0500 Fri, 04 Apr 25 16:02:02 -0500 /news/headline/2025-04-04-aha-calls-medpac-act-physician-fee-schedule-payments-following-recommendations <p>The AHA today <a href="/lettercomment/2025-04-04-aha-comments-medpac-physician-fee-schedule-payment-recommendations">urged</a> the Medicare Payment Advisory Commission to take specific actions on physician fee schedule payments following recommendations the commission made during its March meeting. The AHA urged MedPAC to recommend a full inflationary update to physician payment instead of an update based on a portion of the Medicare Economic Index. Additionally, the AHA called for MedPAC to remove recommendations to update relative value unit calculations and urged the commission to reiterate its concerns about expiring alternative payment model incentive payments. <br> </p> Fri, 04 Apr 2025 16:02:02 -0500 Physician Fee Schedule (PFS)/MACRA/QPP /lettercomment/2025-04-04-aha-comments-medpac-physician-fee-schedule-payment-recommendations <p>April 4, 2025</p><p>Michael Chernew, Ph.D.<br>Chairman<br>Medicare Payment Advisory Commission<br>425 I Street, NW, Suite 701<br>Washington, D.C. 20001</p><p>Dear Chairman Chernew:</p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations; our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to share our comments regarding the Medicare Payment Advisory Commission’s (MedPAC’s) March meeting recommendations on physician fee schedule payments.</p><p>We appreciate the thoughtful discussions the Commission has had over the past three years regarding physician payments. This is a challenging issue, but one that is critical to address to ensure beneficiary access to quality primary care and specialty providers. Thus, given recent discussions at the March meeting, we urge MedPAC to:</p><ul><li><strong>Recommend a full inflationary update to physician payment instead of an update based on a portion of the</strong> <strong>Medicare Economic Index (MEI).</strong></li><li><strong>Remove recommendations to update relative value unit (RVU) calculations.</strong></li><li><strong>Reiterate its concerns about expiring alternative payment model (APM) incentive payments.</strong></li></ul><p>Detailed feedback on these recommendations is below.</p><h2>PHYSICIAN FEE SCHEDULE AND MEI RECOMMENDATION</h2><p>In the March meeting, commissioners reviewed a recommendation for Congress to replace the current law updates to the physician fee schedule with an annual update based on a portion of the growth in the MEI (e.g., MEI minus 1%). <strong>We value the commission’s continued focus on addressing the woeful inadequacy of physician payment. However,</strong> <strong>we are concerned that such an annual update is not sufficient to make up for the existing shortcomings in physician reimbursement.</strong> Addressing this issue is of utmost importance to ensure the continued provision of vital care to Medicare beneficiaries. As we have commented previously, updates to the physician fee schedule conversion factor have not kept pace with inflation.<sup>1,2</sup> Medicare’s conversion factor, which determines physician payment, declined by over 13% in real dollars from 2001 to 2024. The actual reduction when accounting for inflation is a staggering 29%. Continued decrements are unsustainable, particularly in light of the physician shortages the country is facing. <strong>Therefore, we continue to urge MedPAC to recommend a higher update to physician reimbursement that more fully accounts for inflation.</strong></p><h2>ACCURACY OF RELATIVE PAYMENT RATES RECOMMENDATION</h2><p>MedPAC also reviewed a recommendation for Congress to direct the secretary to improve the accuracy of relative payment rates by 1) updating cost data regularly and 2) ensuring that the methodology used to determine payment rates for different services reflects the settings in which clinicians practice medicine. <strong>We are encouraged that MedPAC is evaluating strategies to improve the accuracy of RVU calculations. However, we are concerned that the policy recommendations presented do not address the underlying issues with payment and may inappropriately penalize facility-based providers.</strong></p><p>For example, the recommendation to update cost data regularly (which would yield a rebased and revised MEI) does not address the overall issue of inadequate payment per RVU. Additionally, any updates to RVUs would cause a redistribution of payments based on physicians’ geography and specialty. <strong>As such, we urge MedPAC to further evaluate the potential redistributive effects of cost data updates, especially in light of physician shortages and pervasive underpayments.</strong></p><p>Moreover, the recommendation to revise the RVU methodology based on clinician setting could inappropriately penalize facility-based providers and potentially exacerbate the consolidation of physician practices by non-traditional providers. Unsustainable reimbursement has driven many physicians to pursue employment models that provide stable payment through salaries and enable physicians to focus on direct patient care. Cutting payment to facility-based providers would not solve these issues in physician reimbursement; rather, it would lead to decreases in access since hospitals may no longer be able to absorb additional reductions in reimbursement without cutting services. Indeed, hospitals already must subsidize inadequate payment to preserve access to care in communities, with recent data indicating that subsidies per physician have increased 5% in the last three years to over $306,000 (see figure 1 below)<sup>.3</sup></p><p><strong>Figure 1. Average Subsidy Per Physician</strong></p><p class="text-align-center"><img src="/sites/default/files/inline-images/image_55.png" data-entity-uuid="81dc2055-dec5-4391-9da3-0ea1782d0467" data-entity-type="file" alt="Figure 1 Image - Average Investment / Subsidy Per Physician " width="459" height="393"></p><p>Furthermore, decrements to facility-based providers will create a greater incentive for physicians to seek out employment from non-traditional providers. Of the physician acquisitions that occurred over the last 5 years, the majority have been acquired by private equity companies, other physician groups and health insurers. In fact, of the physician acquisition deals from 2019 to 2023, private equity-backed startups acquired 65% of physician practices, and insurers acquired 14% of practices in that same timeframe. This is compared to hospitals and health systems that only accounted for 6% of physician acquisition acquirers. <strong>Therefore, we oppose policy options to revise RVU methodology in ways that would decrease payment to facility-based providers.</strong></p><h2>ALTERNATIVE PAYMENT MODEL INCENTIVES</h2><p>Finally, we urge MedPAC to reiterate its concerns about the pending expiration of advanced APM incentive payments. While it has previously discussed incentives to support transition to value-based care, the absence of formal policy recommendations related to this issue may be misconstrued to mean that incentives are no longer needed. These payments continue to support providers’ transitions to value-based payment models and support the provision of non-fee-for-service programs like meal delivery programs, transportation services and care coordinators that promote population health.</p><p>We thank you for your consideration of our comments. Please contact me if you have questions or feel free to have a member of your team contact Shannon Wu, AHA’s director of payment policy, at <a href="mailto:swu@aha.org">swu@aha.org</a> or 202-626-2963.</p><p>Sincerely,</p><p>/s/</p><p>Ashley B. Thompson<br>Senior Vice President<br>Public Policy Analysis and Development</p><p>Cc: Paul Masi, M.P.P.<br>MedPAC Commissioners</p><p>____________________</p><p><sup>1</sup> <a href="/lettercomment/2024-12-09-aha-comments-medpac-re-physician-fee-schedule-payments-apm-incentives-and-medicare-advantage-network" target="_blank">/lettercomment/2024-12-09-aha-comments-medpac-re-physician-fee-schedule-payments-apm-incentives-and-medicare-advantage-network</a></p><p><sup>2</sup> <a href="/2025-01-10-aha-comments-advance-medpac-january-2025-meeting" target="_blank">/2025-01-10-aha-comments-advance-medpac-january-2025-meeting</a></p><p><sup>3</sup> <a href="https://www.kaufmanhall.com/insights/research-report/physician-flash-report-q4-2024-metrics" target="_blank" id="https://www.kaufmanhall.com/insights/research-report/physician-flash-report-q4-2024-metrics">https://www.kaufmanhall.com/insights/research-report/physician-flash-report-q4-2024-metrics</a></p><p><sup>4 </sup><a href="/system/files/media/file/2023/06/Private-Equity-and-Health-Insurers-Acquire-More-Physicians-than-Hospitals-Infographic.pdf" target="_blank" id="/system/files/media/file/2023/06/Private-Equity-and-Health-Insurers-Acquire-More-Physicians-than-Hospitals-Infographic.pdf">/system/files/media/file/2023/06/Private-Equity-and-Health-Insurers-Acquire-More-Physicians-than-Hospitals-Infographic.pdf</a></p> Fri, 04 Apr 2025 15:09:55 -0500 Physician Fee Schedule (PFS)/MACRA/QPP /lettercomment/2024-12-09-aha-comments-medpac-re-physician-fee-schedule-payments-apm-incentives-and-medicare-advantage-network <p>December 9, 2024</p><p> </p><p>Michael Chernew, Ph.D.<br>Chairman<br>Medicare Payment Advisory Commission<br>425 I Street, NW, Suite 701<br>Washington, D.C. 20001</p><p>Dear Chairman Chernew: </p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations; our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to share our comments regarding the Medicare Payment Advisory Commission (MedPAC) November meeting sessions related to physician fee schedule payments, advanced alternative payment model (A-APM) incentives and Medicare Advantage (MA) network adequacy.</p><p>In particular, we:</p><ul><li><strong>Directionally support updates to physician reimbursement that are tied to the Medicare Economic Index (MEI) but maintain that the discussed factor of MEI minus 1 is not nearly sufficient to make up for the existing shortcomings in physician reimbursement. </strong></li><li><strong>Oppose penalizing facility-based providers by reducing their reimbursement rates. Doing so is not only inappropriate, but also would create an even greater incentive for physicians to seek out employment from other entities, such as private equity firms and health insurers (which have acquired the vast majority of physician practices during the last five years)</strong>.</li><li><strong>Support an extension of the A-APM incentive payments.</strong></li><li><strong>Encourage the commission to examine the impact of the inadequate MA post-acute care network requirements on beneficiaries’ access to care.</strong></li></ul><p>Our detailed comments on these issues follow.</p> Mon, 09 Dec 2024 12:26:50 -0600 Physician Fee Schedule (PFS)/MACRA/QPP <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) Nov. 1 issued a <a href="https://www.federalregister.gov/public-inspection/2024-25382/medicare-and-medicaid-programs-calendar-year-2025-payment-policies-under-the-physician-fee-schedule" target="_blank">final rule that will update physician fee schedule (PFS) payments</a> for calendar year (CY) 2025. The rule also includes policies related to the Medicare Shared Savings Program (MSSP) and the Quality Payment Program (QPP), both of which were created by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. Additionally, the rule includes policies related to the Medicare Prescription Drug Inflation Rebate Program and Medicare Parts A and B overpayment provisions of the Affordable Care Act.</p><div class="panel module-typeC"><div class="panel-heading"><h3 class="panel-title">Key Highlights</h3></div><div class="panel-body"><p>CMS’ policies will:</p><ul><li>Reduce the PFS conversion factor by 2.8% in CY 2024 compared to CY 2025, which reflects the expiration and removal of the 2.93% statutory payment increase for CY 2024, a 0.00% conversion factor update and a budget-neutrality adjustment.</li><li>Extend certain telehealth waivers through CY 2025, including the waiver allowing for reporting of enrolled practice addresses instead of home addresses when providers perform services from their homes.</li><li>Codify items originally outlined in the revised guidance documents for the Part B Drug Inflation Rebate Program and the Part D Drug Inflation Rebate Program, and create new policies for the inflation rebate program.</li><li>Revise the data reporting period and phase-in of payment reductions for clinical laboratory tests under the Clinical Laboratory Fee Schedule per statutory requirements.</li><li>Suspend the 60-day deadline for reporting and returning Medicare Parts A and B overpayments under certain circumstances to allow time for providers to investigate and calculate overpayment.</li><li>Exclude suspected anomalous spending from financial calculations for the MSSP.</li><li>Revise the MSSP quality measure set and streamline reporting options.</li><li>Add five new Merit-Based Incentive Payment System (MIPS) Value Pathways for CY 2025.</li></ul></div></div><h2>AHA Take</h2><p>The AHA is concerned that despite mounting physician shortages, rising inflation, supply chain shortages and higher input costs, CMS continues to cut the physician reimbursement conversion factor year over year. Indeed, this latest cut is coming on top of two decades of decreases in physician payments. Repeated cuts to physician reimbursement pose significant threats to patient access and provider financial stability, particularly for underserved communities.</p><p>The AHA is also disappointed that the agency did not provide additional flexibilities for good-faith investigations of Medicare Parts A and B overpayments, which may require additional time beyond six months. While we appreciate that CMS has provided some time for providers to conduct appropriate investigations of potential overpayments, the 180-day window for investigations may not be sufficient for large health care providers or for complex cases spanning multiple sites or calendar years.</p><p>We thank CMS for extending certain regulatory telehealth flexibilities through 2025. However, we urge CMS to work with Congress on extending statutory waivers. Without action, many of these critical waivers are scheduled to expire at the end of 2024, risking a telehealth “cliff” that will negatively impact patient access in all communities.</p><p>Finally, we are also pleased that CMS finalized policies to exclude suspected anomalous spending from financial calculations for MSSP, which will avoid penalizing accountable care organizations for such actions outside their control.</p><p>Highlights of the PFS final rule follow.</p><h2>CY 2025 Payment Update</h2><p>CMS finalizes its proposal to cut the conversion factor by 2.8% from the current $33.29 in CY 2024 to $32.35 in CY 2025. This update reflects several different factors: the expiration and removal of a 2.93% increase in the PFS conversion factor for CY 2024 <em>only,</em> which was provided by the Consolidated Appropriations Act (CAA) of 2023 and CAA of 2024; a 0% update factor as required by MACRA; and a budget-neutrality adjustment.</p><h3>Payment for Evaluation and Management Visits</h3><h3> </h3><h4>Add-on Outpatient/Office (O/O) Evaluation and Management (E/M) Complexity Code</h4><p>CMS finalizes updated guidance regarding the complexity add-on code (G2211) to account for intensity and complexity for O/O E/M visits. Specifically, CMS will allow payment of the O/O E/M visit complexity add-on code when the O/O E/M base code is reported by the same practitioner on the same day as an annual wellness visit, vaccine administration or any Medicare Part B preventive service furnished in the office or outpatient setting.</p><h4>Hospital Inpatient or Observation (I/O) E/M Add-on for Infectious Diseases</h4><p>For CY 2025, CMS finalized its proposal to add a new health care common procedure coding system (HCPCS) code (G0545) to describe the intensity and complexity inherent to I/O care associated with confirmed or suspected infectious disease performed by a physician with specialized training in infectious disease.</p><h3>Medicare Economic Index</h3><p>In CY 2023, CMS rebased and revised the Medicare Economic Index (MEI). Under the agency’s revised methodology, the portion of the MEI accounted for by practice expense increased, while the portions accounted for by physician work and malpractice decreased. The agency anticipated that these revised weights would not impact overall spending for PFS services but would impact payment distribution based on geography and specialty. As such, CMS delayed the rebased and revised MEI implementation. CMS again delays implementing the rebased and revised MEI beyond CY 2025.</p><h3>Changes to Payment for Medicare Telehealth Services</h3><h4>Medicare Telehealth Services List</h4><p>CMS received requests to “permanently” consider the HCPCS CPT codes currently included on the provisional Medicare Telehealth Services List for CY 2025. However, CMS states that it will not recategorize provisional codes as permanent until it can complete a comprehensive analysis of all provisional codes; as such, it expects to address recategorization in future rulemaking.</p><p>In addition, in a reversal of policies presented in the proposed rule, CMS does not add Home International Normalized Ratio Monitoring as a provisional telehealth service, and CMS maintains Radiation Treatment Management on the Medicare Telehealth List on a provisional basis. CMS also adds caregiver training services to the Medicare Telehealth List provisionally. Finally, CMS permanently adds Pre-exposure Prophylaxis (PrEP) for HIV as an approved telehealth service.</p><h4>Extensions of Certain Telehealth Waivers</h4><p>CMS finalizes its proposals to extend several telehealth waivers through 2025 including:</p><ul><li>Removing frequency limitations for subsequent care services in inpatient, nursing facility and critical care consultations.</li><li>Reporting of practice addresses instead of home addresses when providers perform services from their homes.</li><li>Billing of telehealth services by Federally Qualified Health Centers and Rural Health Clinics.</li><li>Definition of direct supervision to include virtual presence via audio/video real-time communications technology.</li><li>Virtual supervision of residents when the service is performed virtually across teaching settings (both metropolitan service areas and non-metropolitan service areas).</li></ul><p>CMS also permanently changes the definition of an interactive telecommunications system to include audio-only technology for any telehealth services delivered to the patient’s home when the patient is incapable of or does not consent to video technology use (when the home is an eligible originating site). CMS clarifies that no additional documentation, except for the appropriate modifier, is needed.</p><h3>Caregiver Training Services</h3><p>The agency finalizes proposals related to caregiver training services. Specifically, CMS finalizes code descriptors for three caregiver training codes (G0541, G0542 and G0543) and designated these as “sometimes therapy” services. This facilitates payment for caregiver training services for outpatient physical therapy, occupational therapy and speech-language pathology services.</p><h3>Request for Information on Services Addressing Health-related Social Needs</h3><p>In the proposed rule, CMS issued a request for information (RFI) for services addressing health-related social needs. In response to feedback from the RFI, CMS provides some clarification in the final rule on the definition of auxiliary personnel eligible to perform services incident to the billing practitioner’s professional services. Specifically, CMS clarifies that “certified or trained auxiliary personnel” can include clinical social workers.</p><p>In general, the agency will continue to review feedback on how Community Health Integration (CHI), Principal Illness Navigation (PIN), and Social Determinants of Health (SDOH) risk assessment services are currently being used and how these services could be improved in the future. The agency indicates that it will consider feedback for future rulemaking.</p><h3>Advanced Primary Care</h3><h4>Advanced Primary Care Management Services</h4><p>CMS finalizes three new bundled codes (G0556, G0557 and G0558) for Advanced Primary Care Management (APCM) services effective Jan. 1, 2025. The agency finalizes descriptors and levels of service as proposed (stratified based on the number of chronic conditions and risk factors as defined by Qualified Medicare Beneficiary status). CMS also finalizes overlap policies as proposed. Specifically, it will allow for concurrent billing of APCM services in conjunction with behavioral health integration (BHI), CHI, PIN and SDOH risk assessments.</p><h4>Advanced Primary Care RFI</h4><p>In the proposed rule, CMS sought input on hybrid payment models and how to update payment policies to incorporate advanced primary care services into Medicare. The agency states that it will consider feedback in future rulemaking and highlights some key areas of input from stakeholders, including recommendations to restrict APCM billing to accountable care organizations or total cost of care models, waive cost-sharing requirements and broaden data sources for determining hybrid payment rates.</p><h3>Cardiovascular Risk Assessment and Risk Management</h3><p>The agency finalizes a new HCPCS code (G0537) for the administration of a standardized, evidence-based Atherosclerotic Cardiovascular Disease (ASCVD) risk assessment and another (G0538) for ASCVD risk management services. Given feedback, CMS did not finalize the requirement for the ASCVD risk assessment to be performed on the same day as the associated E/M visit.</p><h3>Strategies for Improving Global Surgery Payment Accuracy</h3><p>CMS finalizes several proposals to improve global surgery payment accuracy. Specifically, beginning in 2025, modifier 54 will be required for all 90-day global surgical packages when a practitioner plans to furnish only the surgical procedure portion of the global package (including both formal and other transfers of care). The agency did not finalize changes regarding the use of modifier 55 and modifier 56 for CY 2025.</p><p>CMS also finalizes a new Post-operative Care Services Add-on code (G0559) for a global package provided by a practitioner who did not furnish the procedure.</p><h3>Behavioral Health Services</h3><p>CMS finalizes several provisions intended to advance payments for (and, in turn, expand access to) behavioral health services. These provisions include:</p><ul><li>A new standalone code to account for safety planning activities for patients at increased risk for suicide or overdose, billable in 20-minute increments. The agency originally proposed this as a one-time add-on code for E/M or psychotherapy services but adjusted the proposal in response to public comment.</li><li>A new monthly code representing a bundle of services (including phone calls) for post-discharge follow-up with patients who were discharged from the emergency department for a crisis episode.</li><li>Three new HCPCS codes for FDA-cleared digital mental health treatment devices used incident to professional services for behavioral health treatment.</li><li>Six new codes allowing clinical psychologists, licensed social workers, marriage and family therapists, and mental health counselors to bill for interprofessional consultations with other practitioners.</li></ul><p>In addition, CMS makes several updates to payments for services furnished by Opioid Treatment Programs (OTPs). Specifically, the agency makes permanent the ability for OTPs to conduct periodic assessments via telehealth, including audio-only phone calls when video is unavailable, as well as the ability to use audio/video communications to initiate treatment with methadone. The agency also adds payment for SDOH risk assessments conducted during intake and, in the final rule, includes more types of professionals who may conduct these assessments. CMS also finalizes payment for newly FDA-approved opioid agonist and antagonist medications. Finally, CMS clarifies that claims treatment provided by OTPs require a diagnosis of opioid use disorder specifically for payment; OTPs may provide treatment for patients with multiple diagnoses, which can be reflected on claims, but the OTP Medicare Part B benefit is specifically for opioid use disorder treatment.</p><h3>Electronic Prescribing for Controlled Substances for a Covered Part D Drug Under a Prescription Drug Plan or a Medicare Advantage Part D Plan</h3><p>In previous rulemaking, CMS adopted the requirement for all Schedule II-V controlled substances prescribed electronically under Part D to be prescribed using specific standards. In this rule, CMS finalizes an extension to the timeline for these prescriptions to be issued electronically for beneficiaries in long-term care facilities from Jan. 1, 2025, until Jan. 1, 2028.</p><h3>Clinical Laboratory Fee Schedule Phase-in of Payment Reductions</h3><p>Under regulations implementing the Protecting Access to Medicare Act, CMS required “applicable laboratories,” including certain physician office laboratories and hospital outreach laboratories, to collect the rates they were paid by private payers from Jan. 1, 2016, through June 30, 2016, (the data collection period) and report those rates to CMS between Jan. 1, 2017, and March 31, 2017, (the data reporting period). CMS calculated the weighted median private payer rate for each reported HCPCS code, and this became the clinical laboratory fee schedule (CLFS) payment amount effective Jan. 1, 2018, subject to the statutory provision that limited CLFS payment reductions to no more than 10% annually for 2018 through 2020.</p><p>The second data collection period was Jan. 1, 2019, through June 30, 2019. While the second data reporting period was originally Jan. 1, 2020, through March 31, 2020, Congress subsequently delayed the data reporting period several times. Most recently, the Continuing Appropriations and Extensions Act of 2025 (CAEA) delayed the data reporting period until Jan. 1, 2026, through March 31, 2026, but did not change the date of the second data collection period. The CAEA also limited the reduction in payment to 0% for 2025 and 15% for each year 2026 through 2028.</p><p>In the final rule, CMS conforms its regulations to the latest statutory amendments.</p><h3>Medicare Prescription Drug Inflation Rebate Program</h3><p>The Inflation Reduction Act of 2022 established requirements under which drug companies must pay inflation rebates to the government if they raise their prices for certain Part B and Part D drugs faster than the rate of general inflation. CMS finalizes policies originally outlined in the revised guidance documents for the Part B Drug Inflation Rebate Program and the Part D Drug Inflation Rebate Program, both published on Dec. 14, 2023. In addition, CMS finalizes new and revised policies for the inflation rebate program. These include:</p><ul><li>Exploring the establishment of a Medicare Part D claims data repository to identify and exclude Part D drugs purchased under the 340B drug pricing program starting Jan. 1, 2026. CMS will not pursue its proposed estimation methodology or a 340B claims modifier to identify Part D drugs purchased under the 340B program and will instead provide detailed policies and requirements of a claims data repository in future rulemaking.</li><li>Establishing the method and process for reconciliation of a rebate amount for rebate-eligible Part B and Part D drugs, including the circumstances that may trigger such a reconciliation.</li><li>Establishing a civil monetary penalty process when a drug company fails to pay the full rebate amount within the payment deadline.</li><li>Clarifying rebate calculations for rebate-eligible Part B and Part D drugs in specific circumstances, including exclusion of Part B units of single-dose container or single-use package drugs subject to discarded drug refunds.</li></ul><h3>Drugs and Biological Products Paid Under Medicare Part B</h3><h4>Requiring Manufacturers of Certain Single-dose Container or Single-use Package Drugs to Provide Refunds for Discarded Amounts</h4><p>In rulemaking over the last few years, CMS has finalized many policies to implement provisions of the Infrastructure Investment and Jobs Act, which established a refund for discarded amounts of certain single-dose container or single-use package drugs under Part B. In the final rule, CMS finalizes its proposed changes on how it will identify certain drugs that are excluded from the definition of “refundable drug” for which payment has been made under Part B for fewer than 18 months and how it identifies drugs from a single-dose container. The agency will also require the JW modifier if a billing supplier is not administering a drug but there are discarded amounts during the preparation process before supplying the drug to the patient. Finally, CMS will continue to exclude skin substitutes from the refund application.</p><h4>Payment Limits when Negative or Zero ASP Data Are Reported</h4><p>CMS finalizes an approach to how it will calculate payment limits when manufacturers report negative or zero average sales price (ASP) data. Generally, the agency establishes a policy that negative and zero ASP data are considered “not available,” and that positive ASP data are considered available. In circumstances in which negative or zero ASP data are reported for some, but not all, National Drug Codes (NDCs) associated with a billing and payment code for a drug, the agency will calculate the payment limit using only NDCs with positive ASP data. In certain circumstances, it will carry over the most recent positive ASP data for the drug to calculate a payment limit when the manufacturer’s ASP is negative or zero. For biosimilars with negative or zero ASP data for all NDCs, CMS modifies its proposal such that the finalized payment limit calculation will use the biosimilar’s own, most recently available, positive manufacturer’s ASP data.</p><h4>Radiopharmaceuticals Furnished in a Physician Office</h4><p>CMS finalizes its proposal that for radiopharmaceuticals furnished in a setting other than the hospital outpatient department, the Medicare Administrative Contractors (MACs) shall determine payment limits based on any methodology used to determine payment limits for radiopharmaceuticals in place on or prior to November 2003. Such methodology may include but is not limited to the use of invoice-based pricing.</p><h4>Reducing Barriers for Beneficiaries Receiving Immunosuppressive Drugs</h4><p>CMS finalizes its proposed policies to reduce barriers faced by beneficiaries receiving immunosuppressive drugs under Medicare Part B. Because some beneficiaries rely on compounded immunosuppressive drugs for maintenance therapy, CMS finalizes revisions to its regulations to include certain compounded formulations of FDA-approved drugs that have approved immunosuppressive indications or are used in conjunction with immunosuppressive drugs, or that have been determined by a MAC to be reasonable and necessary to prevent or treat rejection of a transplanted organ or tissue. Specifically, CMS finalizes the inclusion of certain compounded formulations that are orally or enterally administered.</p><p>In addition, CMS finalizes changes regarding supplying fees and refills for immunosuppressive drugs. This includes allowing payment of a supplying fee for a prescription of a supply of up to 90 days and allowing prescriptions for immunosuppressive drugs to be refillable.</p><h4>Blood Clotting Factor Policy</h4><p>CMS updates its regulations to clarify its existing policy that blood clotting factors must be self-administered to be considered clotting factors for which the furnishing fee applies. It also clarifies that therapies that enable the body to produce clotting factors and do not directly integrate into the coagulation cascade are not themselves clotting factors to which the furnishing fee applies. Additionally, CMS clarifies that the furnishing fee is only available to entities that furnish blood clotting factors unless the costs associated with furnishing the clotting factor are paid through another payment system, including the PFS.</p><h3>Medicare Parts A and B Overpayment Provisions of the Affordable Care Act</h3><p>The agency finalizes several proposals related to the reporting and returning of Medicare Parts A and B overpayments. Specifically, CMS finalizes circumstances that would suspend the 60-day deadline for reporting and returning overpayments for up to 180 days to allow time for providers to investigate and calculate overpayments. In such cases, the final rule provides that the 60-day period would be suspended until the investigation is concluded and overpayments are calculated or 180 days after the date where the initial overpayment was identified, whichever is earlier.</p><h3>Medicare Shared Savings Program</h3><h4>MSSP Measure Set Changes</h4><p>Last year, CMS announced the establishment of a <a href="https://www.cms.gov/medicare/quality/cms-national-quality-strategy/aligning-quality-measures-across-cms-universal-foundation" target="_blank">Universal Foundation</a> measure set that it intended to use across as many relevant CMS programs as possible. To further align the MSSP measure set with the Universal Foundation, CMS finalizes its proposal to establish a new “Alternative Payment Model Performance Pathway (APP) Plus” measure set. The APP Plus includes six existing measures and five additional measures from the Universal Foundation that will be added incrementally between the CY 2025 and CY 2028 reporting years.</p><p>CMS also streamlines the reporting types for MSSP quality measures to just two — the Medicare clinical quality measure (Medicare CQM), which includes only Medicare patients, and electronic CQM (eCQM) which would include all-payer data. However, in response to stakeholder concerns, CMS will retain the MIPS CQM reporting option for an additional two performance years (CYs 2025 and 2026) to allow for more transition time. To incentivize the use of eCQM reporting, CMS will extend its scoring incentive to report eCQMs into the CY 2025 reporting year and beyond. ACOs that report eCQMs have slightly relaxed thresholds for meeting the minimum quality performance standard that makes them eligible for shared savings or ensures they avoid owing maximum shared losses.</p><h4>Mitigating the Impact of Significant, Anomalous and Highly Suspect Billing Activity</h4><p>CMS finalizes policies to exclude payment amounts from expenditure and revenue calculations for the relevant CY for which a significant, anomalous and highly suspect (SAHS) billing activity is identified (for CY 2024 or subsequent calendar years). The agency will also carve out these amounts from historical benchmarks used to reconcile the ACO for a performance year corresponding to the CY for which the SAHS billing activity is identified. CMS also reinforces that the agency has sole discretion in determining whether to reopen payment determinations.</p><h4>Revised ENHANCED Track RFI</h4><p>In the proposed rule, CMS sought feedback on potential features of a revised ENHANCED Track, including a benchmark discount rate, tapered sharing arrangements, minimum savings rate/minimum loss rate, and a cap on regional adjustment weights. In the final rule, the agency indicates it would consider feedback in future rulemaking. CMS acknowledged several comments from stakeholders, noting that nearly all commenters were opposed to a higher-risk track replacing the existing ENHANCED track, and commenters indicated that a higher-risk offering should be provided alongside the current ENHANCED Track.</p><h3>Quality Payment Program</h3><p>As mandated by MACRA, the QPP includes two tracks — the default MIPS and APMs. The rule adopts updates to what eligible clinicians must report during the QPP’s 2025 performance period and beyond. There is a lag of two years between the QPP’s performance period and the payment year; for example, CY 2025 performance will affect PFS payments in CY 2027. As required by MACRA, eligible clinicians will receive positive or negative payment adjustments of up to 9% in CY 2027 based on CY 2025 performance.</p><p>Key QPP-related provisions in the final rule include the following:</p><ul><li><h4>MIPS Value Pathways (MVPs)</h4><p>In prior rulemaking, CMS adopted a framework for MVPs that the agency intends as a long-term replacement for the current MIPS. MVPs organize the reporting requirements for each MIPS category around specific medical conditions, clinical specialties or episodes of care. In this rule, CMS finalizes five additional MVPs that would be available for the CY 2025 performance period: dermatology, gastroenterology, ophthalmology, pulmonology, surgical care and urology.</p></li><li><h4>MIPS Quality Category</h4><p>CMS will add the APP Plus reporting option described in the MSSP section of this Special Bulletin to the MIPS program. CMS also finalizes its proposal to apply a complex organization adjustment for APM Entities and virtual groups. Starting in the CY 2025 reporting period, CMS will add one point for each successfully reported eCQM. The adjustment will be capped at 10% of each participant’s quality category achievement points.</p></li><li><h4>MIPS Improvement Activities</h4><p>CMS finalizes its proposal to simplify the scoring of the MIPS Improvement Activity category. Starting with the CY 2025 reporting period, CMS will remove activity weightings, ensuring that each activity receives an equal weight. CMS also will reduce the number of improvement activities in which MIPS participants must participate.</p></li></ul><h2>Further Questions</h2><p>The policies and payment rates will generally take effect Jan. 1, 2025. Watch for a more detailed analysis of the final rule in the coming weeks.</p><p>If you have further questions, contact Jennifer Holloman, AHA’s senior associate director of policy, at <a href="mailto:jholloman@aha.org?subject=RE: Special Bulletin: CMS Issues Physician Fee Schedule Final Rule for CY 2025">jholloman@aha.org</a>.</p></div><div class="col-md-4"><p><a href="/system/files/media/file/2024/11/Special-Bulletin-CMS-Issues-Physician-Fee-Schedule-Final-Rule-for-CY-2025.pdf" target="_blank" title="Click here to download the Special Bulletin: CMS Issues Physician Fee Schedule Final Rule for CY 2025 PDF."><img src="/sites/default/files/inline-images/Page-1-Special-Bulletin-CMS-Issues-Physician-Fee-Schedule-Final-Rule-for-CY-2025.png" data-entity-uuid="70fc6202-29c7-4e14-9763-98bb5706c2d4" data-entity-type="file" alt="Special Bulletin: CMS Issues Physician Fee Schedule Final Rule for CY 2025 page 1." width="696" height="900"></a></p></div></div></div> Mon, 04 Nov 2024 15:20:45 -0600 Physician Fee Schedule (PFS)/MACRA/QPP /news/headline/2024-11-01-cms-issues-cy-2025-physician-fee-schedule-final-rule <p>The Centers for Medicare & Medicaid Services Nov. 1 released its calendar year 2025 <a href="https://www.federalregister.gov/public-inspection/2024-25382/medicare-and-medicaid-programs-calendar-year-2025-payment-policies-under-the-physician-fee-schedule">final rule</a> for the physician fee schedule. The rule will cut the conversion factor by 2.8% to $32.35 in CY 2025 compared to $33.29 in CY 2024. This reflects the expiration of the 2.93% statutory payment increase for CY 2024; a 0.00% conversion factor update under the Medicare Access and CHIP Reauthorization Act; and a .02% budget-neutrality adjustment. <br><br>In addition, CMS extended several regulatory telehealth waivers through 2025. These include waivers for reporting of enrolled practice addresses instead of home addresses when providers perform services from their homes; another for Federally Qualified Healthcare Centers and Rural Health Clinics to bill for telehealth services; and another allowing virtual supervision for residents in all teaching settings when the services are provided virtually. The agency also updated the definition of an interactive telecommunications system to include two-way, audio-only communication for any Medicare telehealth service furnished to a beneficiary in their home (if the beneficiary is incapable or does not consent to video technology). Finally, CMS notes, absent congressional action, statutory limitations in place for Medicare telehealth services prior to the COVID-19 public health emergency will again take effect on Jan. 1.<br><br>The agency also finalized several proposals related to the reporting and returning of Medicare Parts A and B overpayments. Specifically, CMS finalized circumstances that would suspend the deadline for reporting and returning overpayments to allow time for providers to investigate and calculate overpayments.<br><br>For the Quality Payment Program, CMS adopted six new, optional Merit-based Incentive Payment System Value Pathways for reporting beginning in 2025. For the Medicare Shared Savings Program, CMS finalized policies to mitigate the impact of significant, anomalous, and highly suspect billing activity for CY 2024 and subsequent years. Specifically, CMS will exclude payment amounts from financial calculations for the relevant CY for which the SAHS billing activity is identified and from historical benchmarks used for reconciliation.<br><br>AHA members will receive a Special Bulletin with more details Nov. 4.</p> Fri, 01 Nov 2024 15:10:53 -0500 Physician Fee Schedule (PFS)/MACRA/QPP /lettercomment/2024-09-09-aha-comments-cms-physician-fee-schedule-cy-2025-proposed-rule <div class="container"><div class="row"><div class="col-md-8"><p>September 09, 2024</p><p>The Honorable Chiquita Brooks-LaSure<br>Administrator<br>Centers for Medicare & Medicaid Services<br>Hubert H. Humphrey Building<br>200 Independence Avenue, S.W., Room 445-G<br>Washington, DC 20201<br>Submitted Electronically</p></div><div class="col-md-4"><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2024/09/AHA-Comments-on-CMS-Physician-Fee-Schedule-CY-2025-Proposed-Rule.pdf" target="_blank" title="Click here to download the AHA Comments on CMS Physician Fee Schedule CY 2025 Proposed Rule letter PDF.">Download the Letter PDF</a></div></div></div><div class="row"><div class="col-md-8"><p><em><strong>RE: CMS–1807–P Medicare and Medicaid Programs; CY 2025 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Prescription Drug Inflation Rebate Program; and Medicare Overpayments</strong></em></p><p>Dear Administrator Brooks-LaSure:</p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations; our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers; and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) physician fee schedule (PFS) proposed rule for calendar year (CY) 2025.</p><p><strong>The AHA applauds CMS’ proposals to extend many telehealth regulatory flexibilities through 2025.</strong> There are, however, many statutory waivers that are also scheduled to expire at the end of the year. <strong>As such, we urge CMS to work with Congress to extend these telehealth provisions.</strong> Their expiration would result in a telehealth “cliff,” risking reducing access to care for the millions of Americans who rely on virtual modalities to receive necessary services. As we have previously advocated, we cannot emphasize enough how essential waivers like removing geographic and originating site restrictions are to the provision of care and continued access to services.<a href="#fn1"><sup>1</sup></a></p><p><strong>We are also pleased that the agency proposes to exclude significant, anomalous and highly suspect (SAHS) from Medicare Shared Savings Program (MSSP) financial calculations.</strong> As we have previously commented, the inclusion of SAHS billing can have a significant impact on these calculations, in many cases resulting in a loss of shared savings.<a href="#fn2"><sup>2</sup></a> We applaud the agency for taking quick action to develop proposals to address concerns raised by stakeholders.</p><p><strong>However, we are deeply concerned with the proposed payment update, which would reduce payments by approximately 2.8% from their CY 2024 levels.</strong> This negative update comes after over two decades of conversion factor decrements and in the face of significant staffing shortages, rising inflation and unrelenting financial pressures. We are concerned that such a reduction in payment would pose significant risks to patients’ access to care. Indeed, a recent Medicare Trustees report highlights the potential impact of continued payment decrements on disparities in care. <strong>We urge CMS to work with Congress to provide a payment increase for 2025 and to develop a long-term plan for sustainable physician payment.</strong></p><p>Finally, we have concerns regarding CMS’ proposed updates to Medicare Parts A and B overpayment policies. As we have previously commented, we continue to assert that CMS’ reliance on <em>UnitedHealthcare Insurance Co. v. Azar</em> to remove “reasonable diligence” standards does not, in our view, hold what CMS understands it to hold.<a href="#fn3"><sup>3</sup></a> <strong>Additionally, while we appreciate that CMS acknowledges that additional time beyond 60 days is needed to complete investigations of overpayments, the proposed 180-day window to suspend reporting and repayment is insufficient. We urge CMS to provide sufficient exceptions when complex, multi-year or multi-site investigations necessitate additional time beyond 180 days.</strong></p><p>We appreciate your consideration of these issues. Our detailed comments are attached. Please contact me if you have questions or feel free to have a member of your team contact Jennifer Holloman, AHA’s senior associate director of policy at <a href="mailto:jholloman@aha.org?subject=RE:AHA Comments on CMS Physician Fee Schedule CY 2025 Proposed Rule letter">jholloman@aha.org</a>.</p><p>Sincerely,</p><p>/s/</p><p>Ashley B. Thompson<br>Senior Vice President<br>Public Policy Analysis and Development</p><p><a href="/system/files/media/file/2024/09/AHA-Comments-on-CMS-Physician-Fee-Schedule-CY-2025-Proposed-Rule.pdf#page=3"><em>Enclosure</em></a></p><hr><ol><li id="fn1"><a href="/system/files/media/file/2023/01/aha-feedback-to-the-senate%20on-the-creating-opportunities-now-for-necessary-and-effective-care-technologies-connect-act-letter-1-30-23.pdf" target="_blank">/system/files/media/file/2023/01/aha-feedback-to-the-senate%20on-the-creating-opportunities-now-for-necessary-and-effective-care-technologies-connect-act-letter-1-30-23.pdf</a></li><li id="fn2"><a href="/system/files/media/file/2024/07/Comment-Letter-on-CMS-Proposed-Rule-to-Mitigate-the-Impact-of-Significant-Anomalous-and-Highly-Suspect-Billing-Activity.pdf">/system/files/media/file/2024/07/Comment-Letter-on-CMS-Proposed-Rule-to-Mitigate-the- Impact-of-Significant-Anomalous-and-Highly-Suspect-Billing-Activity.pdf</a></li><li id="fn3"><a href="/system/files/media/file/2023/02/aha-comments-on-the-cms-proposed-rule-for-policy-andtechnical-changes-to-the-medicare-advantage-program-in-cy-2024-letter-2-13-23.pdf">/system/files/media/file/2023/02/aha-comments-on-the-cms-proposed-rule-for-policy-andtechnical-changes-to-the-medicare-advantage-program-in-cy-2024-letter-2-13-23.pdf</a></li></ol></div><div class="col-md-4"><p><a href="/system/files/media/file/2024/09/AHA-Comments-on-CMS-Physician-Fee-Schedule-CY-2025-Proposed-Rule.pdf" target="_blank" title="Click here to download the AHA Comments on CMS Physician Fee Schedule CY 2025 Proposed Rule letter PDF."><img src="/sites/default/files/inline-images/Page-1-AHA-Comments-on-CMS-Physician-Fee-Schedule-CY-2025-Proposed-Rule.pdf_.png" data-entity-uuid="8cf6c5cb-af68-430a-8798-cc5c88d76126" data-entity-type="file" alt="AHA Comments on CMS Physician Fee Schedule CY 2025 Proposed Rule letter page 1." width="692" height="900"></a></p></div></div></div> Mon, 09 Sep 2024 14:40:10 -0500 Physician Fee Schedule (PFS)/MACRA/QPP /2024-08-12-aha-comments-340b-drug-pricing-program-irf-payments-physician-fee-schedule-and-telehealth <div class="container"><div class="row"><div class="col-md-8"><p>August 12, 2024</p><p>Michael Chernew, Ph.D.<br>Chairman<br>Medicare Payment Advisory Commission<br>425 I Street, NW, Suite 701<br>Washington, D.C. 20001</p></div><div class="col-md-4"><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2024/08/aha-comments-on-mepac-topics-340b-inpatient-rehab-facility-payments-physician-fee-schedule-and-telehealth-letter-8-12-2024.pdf" target="_blank" title="Click here to download the AHA Comments on 340B Drug Pricing Program, IRF Payments, Physician Fee Schedule and Telehealth letter PDF.">Download the Letter PDF</a></div></div></div><div class="row"><div class="col-md-8"><p>Dear Dr. Chernew: </p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to share our comments as Medicare Payment Advisory Commission (MedPAC) begins its 2024-2025 cycle.</p><p>As the commission continues to consider topics related to the 340B Drug Pricing Program, inpatient rehabilitation facility (IRF) payments, the physician fee schedule (PFS) and telehealth in the new cycle, we urge MedPAC to:</p><ul><li><strong>Carefully consider the negative consequences for beneficiaries, providers and communities of any future efforts to cut Medicare payments to 340B hospitals.</strong></li><li><strong>Reconsider its pursuit of an IRF-skilled-nursing facility (SNF) site-neutral payment policy and discourage it from recommending potential changes to the IRF payment system.</strong></li><li><strong>Directionally support updates to physician reimbursement that more appropriately account for inflation.</strong></li><li><strong>Recommend repealing the in-person visit requirements for tele-behavioral health services and to not pursue policy options that would remove telehealth “incident to” options, as these policies limit patient access.</strong></li></ul><p>Our detailed comments on these issues follow.</p><h2>340B Drug Pricing Program</h2><p>We have serious concerns about the direction that MedPAC has taken with regard to its analysis of the 340B program. Specifically, at its April 2024 meeting, MedPAC shared results of an analysis comparing Medicare fee-for-service payments for covered outpatient drugs purchased under the 340B program to 340B ceiling prices. While we appreciate that MedPAC did not offer any recommendations based on this analysis at this time, we think it is important for it to consider the facts we outline below should it continue this work in the 2024 – 2025 cycle.</p><p>For more than 30 years, the 340B Drug Pricing Program has provided financial help to hospitals (and other providers) serving highly marginalized communities to manage rising prescription drug costs.<sup>1</sup> The program works by permitting certain hospitals to purchase covered outpatient drugs at a discounted price, generate savings, and use those savings to stretch limited federal resources to address the unique health care needs of their patients and communities. For example, hospitals often use their 340B savings to establish behavioral health clinics and implement medication management and community health programs, as well as offer free or discounted medications.<sup>2</sup> These important patient benefits are put at risk when hospitals’ 340B savings are cut.</p><p>The 340B program statute intentionally provides covered entities with additional funds by reducing the acquisition price on 340B drugs without changing hospitals’ reimbursement under the Medicare program. It is precisely this delta between the hospital’s acquisition price for the drug and the reimbursement received that allows 340B hospitals to meet the intent of the program and expand access to care for more patients. <strong>Therefore, MedPAC’s finding that Medicare payments exceeded 340B ceiling prices is consistent with the purpose and design of the 340B program.</strong> If Medicare payments for 340B drugs were reduced, it would diminish the funding available to 340B hospitals to fulfill Congress’ intent to allow these hospitals to use savings to expand the services they can provide. Thus, any Medicare cuts for 340B drugs undermine the congressional intent of the program by reducing the 340B savings available for covered entities to maintain, improve and expand access to health care services for patients.</p><p>We also encourage MedPAC’s to analyze how 340B ceiling prices are set and the factors that influence those prices. 340B ceiling prices are based on two components: the average manufacturer price of the drug and a unit rebate amount. For brand-name drugs, which account for a majority of 340B volume, the unit rebate amount is statutorily set at 23.1%. However, the unit rebate amount is subject to an inflationary penalty where it can exceed 23.1% if a drug company decides to increase the price of their drug faster than the rate of general inflation. Drug companies routinely increase their prices faster and higher than the rate of inflation. A study by the Assistant Secretary for Planning and Evaluation found that from January 2022 through January 2023, approximately 2,000 drugs experienced price increases greater than inflation, with an average price increase of 15.2%.<sup>3</sup> As a result, for many 340B drugs, the ceiling price is well <em>below</em> what is statutorily required, which leads to a greater difference between the ceiling price and the Medicare payment rate. Put another way, any gaps between ceiling prices and Medicare payment rates are a direct result of decisions by drug companies to increase drug prices — not hospitals. As such, already-struggling 340B hospitals should not suffer rate cuts that mainly benefit drug companies. In fact, MedPAC itself has calculated that hospitals’ Medicare margins are nearly <em>negative </em>12%.<sup>4</sup> Payment cuts for 340B drugs would make these margins worse, further jeopardizing hospitals’ ability to furnish programs and services that are supported by 340B savings.</p><p><strong>Given the important role that the 340B program plays in allowing hospitals to expand access to care for the patients and communities they serve, we urge MedPAC to carefully consider the negative consequences for patients and providers in any future efforts to cut Medicare payments to 340B hospitals.</strong></p><h2>IRF Payments</h2><p>MedPAC has considered potential approaches to lowering Medicare payments for select conditions in IRFs but we<strong> continue to discourage it from recommending such changes.</strong> Specifically, at the April 2024 meeting, the commissioners specifically considered whether conditions that fall outside the 13 that must account for 60% of IRF beneficiaries (the “60% rule”) should be paid at a lower rate than the one currently provided under the IRF prospective payment system (PPS). As the AHA detailed in response to the first session held on this topic (see AHA’s <a href="/2023-10-27-aha-comments-medpacs-site-neutral-nurse-staffing-requirements-october-2024-meeting-discussion">October 2023 letter</a>), such an approach not only would be far less precise and patient-centric than the current IRF PPS but also would have the potential to curtail access to needed rehabilitation services. <strong>To that end, the AHA is pleased that staff and commissioners seemed to acknowledge even more shortcomings of this approach.</strong></p><p>In AHA’s October 2023 letter, we explained why use of the 60% rule for payment determinations is misplaced. This letter will not recount those points in their entirety, but we would reiterate that the 60% rule was never intended as and has never been used as a tool to determine coverage or payment for IRF services. Instead, this rule has served <em>solely </em>as a tool to distinguish IRFs from other hospitals at the very highest level. Therefore, applying this broad classification tool to patient-specific determinations regarding payment or coverage is misguided.<strong> </strong>Further, and as MedPAC acknowledged, Medicare coverage regulations require that 100% of all Medicare beneficiaries treated in IRFs meet specific, detailed medical necessity requirements.<sup>5</sup> As such, we urge the commission’s to refrain from using terms “compliant” and “noncompliant” to describe IRF patient groups that fall into and out of the 60% rule, respectively, despite the explanations that MedPAC staff provided regarding these terms.</p><p>To this point, the AHA appreciated discussion from MedPAC commissioners and staff during this session acknowledging the difficulty involved in determining the appropriateness of IRF admissions for individual patients. Indeed, medical necessity determinations do not rely on the primary condition of the patient but instead involve a thorough assessment of the patient's medical and functional status and prognosis.<sup>6</sup> Therefore, the AHA endorses the view that this decision is a judgement call best made by the expert clinicians treating the patient.<strong> </strong>Thus, while it may appear based on the data alone that there is significant overlap in patient types treated in IRF and SNFs, experienced clinicians have utilized their expertise to screen patients and distinguish those that are best suited for IRFs based on characteristics that may not be readily apparent in the data MedPAC has available to them. <strong>Thus, we are concerned MedPAC’s premise for leveling payment for supposedly overlapping patient types is misguided, as those placed in IRFs have been properly screened and distinguished from other patients.</strong></p><p>The IRF PPS is a sophisticated payment system that takes numerous factors into account to provide a targeted payment amount. Through the IRF PPS, CMS analyzes the relative resource use of each diagnosis group (referred to as case-mix groups) and assigns a relative weight. Through this mechanism, the agency is already accounting for differences in resource use among patients and adjusts payments accordingly. <strong>However, despite the use of this refined payment system, MedPAC is considering imposing a blunt and imprecise instrument — one that would group a third or more of the current patient population into a single noncompliant category — to summarily reduce payment. It would be both inconsistent with MedPAC’s overarching goal of improving payment accuracy, as well as harmful to patients, to modify the current payment system in this way.</strong> The AHA appreciates the need to explore avenues to improve the accuracy of payments but does not believe such a broad instrument is appropriate to do so.</p><p>Beyond the use of the 60% rule, the AHA does not believe that attempting to align payments between IRFs and SNFs more generally is a worthwhile endeavor. This is due to the vastly different regulatory environments under which IRFs (hospitals) and SNFs (subacute facilities) operate. The difficulties in aligning payment incentives and other important factors between these and other sites of care became apparent during MedPAC’s work on the Unified Post-Acute Care payment system. In addition, and as was noted during the commission’s discussion, IRFs provide a vastly more intensive course of treatment than SNFs. Further, Medicare cost sharing, lifetime coverage and several other factors vary greatly between the two types of facilities. Therefore, to the extent MedPAC continues work on the IRF PPS, the AHA encourages it to examine payment accuracy within the IRF PPS, rather than attempt to analogize IRFs and SNFs.</p><p>When comparing IRFs and SNFs, MedPAC has expressed a reluctance to utilize functional data due to it being provider reported and tied to payment and therefore potentially prone to inaccuracies. The AHA urges MedPAC to reconsider this position. While no data are perfect, the functional data provided, especially on aggregate, should not be considered any more flawed than other Medicare data which require provider submitted information, including information that impacts payment. This includes cost reports, claims and other data on which MedPAC regularly relies, and all of which influences reimbursement for providers. Instead of dismissing this data, we respectfully request that it be considered as one of many points of insight into the experience of patients treated at IRFs.</p><h2>Physician Fee Schedule Updates</h2><p>We appreciate MedPAC’s recognition that the current framework for physician payment is inadequate and that it is considering policy approaches to address these issues. The impacts of inflation and rising input costs continue to outpace the reimbursement for services covered by the PFS. There is a widening gap between physician payment and increases in the Medicare Economic Index (MEI), and we have previously <a href="/system/files/media/file/2023/01/aha-comments-re-medpac-final-payment-update-recommendations-1-3-23.pdf">commented</a> on the need to right size payment with inflation. As detailed below, we have specific feedback on the three policy approaches MedPAC is considering.</p><p>We oppose updating physician practice expenses (PEs) based on the hospital market basket minus productivity, as this approach would add unnecessary complexity by creating two conversion factors (one for practice expenses and another for malpractice and work expenses) and would inappropriately penalize clinicians performing low practice expense services and those operating in facility settings. We directionally support updating physician payments by the MEI but do not think the discussed MEI minus one percentage point update is nearly sufficient to cover the existing shortcomings in physician reimbursement. Finally, we support extending Advanced-Alternative Payment Model (A-APM) incentive payments to support transition to value-based care.</p><p><strong>However, we are concerned that MedPAC seems to be framing many of their discussions and approaches on physician payment updates with a goal of reducing site-of-service payment differentials. The AHA strongly opposes site-neutral payments, which reduce access to critical health care services, especially in rural and other underserved areas.</strong> <strong>Site-neutral policies ignore fundamental differences between hospital outpatient departments (HOPDs) and other outpatient care settings.</strong> Hospitals and health systems provide unique benefits to their community like 24/7 standby capacity for emergencies and special service capabilities such as burn, neonatal, psychiatric services, and more. HOPDs also are required to comply with more regulatory and safety codes and care for sicker, more complex patients than other care settings. Expanding site-neutral cuts would endanger the critical role hospitals and health systems play in their communities, including access to care for patients. </p><h3>Approach 1: Update Physician PEs Based on Hospital Market Basket Minus Productivity.</h3><p><strong>We oppose MedPAC’s approach to increase the PE portion of fee schedule payments by the hospital market basket minus productivity. </strong>First, this proposal would exacerbate disparities in reimbursement in certain specialty areas by effectively penalizing clinicians performing low PE services because their payments would be increased at a lower rate than clinicians performing high PE services. It also would penalize clinicians performing services in facility settings such as those in critical care, hospital medicine, emergency medicine and behavioral health. Decreasing reimbursement for certain physicians in order to augment reimbursement for others risks reducing patient access and exacerbating provider shortages.</p><p>In addition, this option would add unnecessary complexity by creating separate conversion factors for the PE versus the work and malpractice components of the physician reimbursement equation. Yet, physician work and malpractice insurance are also impacted by inflation that has not been adequately accounted for by payment updates. Indeed, a recent report from AMA found that increases in malpractice insurance premiums are accelerating. In 2018, 13.7% of malpractice premiums increased year-to-year, yet from 2020 through 2022, 30% of premiums increased annually.<sup>7</sup> All three factors contributing to physician reimbursement (practice expense, work and malpractice relative value units (RVUs)) require updates to account for inflation and rising input costs.</p><p>We also reiterate our previous concerns regarding site-neutral payments. Both Approach 1 and Approach 2 (listed below) are framed in the context of reducing site of service payment differentials. Proposals that attempt to treat HOPDs the same as independent physician offices and other ambulatory sites of care ignore the very different level of care provided by hospitals and the needs of the patients and communities cared for in that setting. These outpatient departments treat more patients from medically underserved populations who tend to be sicker and more complex to care for than Medicare patients treated in independent physician offices and ambulatory surgical centers. They also are held to more rigorous licensing, accreditation and regulatory requirements.</p><p>The cost of care delivered in hospitals and health systems, including HOPDs, is fundamentally different than other sites of care and thus needs to consider the unique benefits that only they provide to their communities. This includes maintaining standby capacity for natural and man-made disasters, public health emergencies, other unexpected traumatic events, and the delivery of 24/7 emergency care to all who come through their doors regardless of ability to pay or insurance status. Since the hospital safety-net and emergency standby roles are funded through the provision of all outpatient services, expanding site-neutral cuts to additional HOPDs and the outpatient services they provide would endanger the critical role that they play in their communities, including access to care for patients, especially the most medically complex<strong>. The AHA strongly opposes further site-neutral payment cuts, which threaten access to care. </strong></p><h3>Approach 2: Update Payment Rates by MEI Minus One Percentage Point.</h3><p><strong>While we directionally support updating rates consistent with the MEI, MEI minus 1% is insufficient to cover existing shortcomings in physician reimbursement.</strong> Indeed, we echo the concerns expressed by many commissioners that this could result in a negative compounding effect over time. We encourage MedPAC to pursue annual updates to payment rates that are more in line with inflation and are made outside budget neutrality.</p><p><strong>We also are encouraged that MedPAC is evaluating strategies to improve RVU calculations. </strong>We suggest that the commission revisit this issue once updated Physician Practice Information Survey (PPIS) data are available. The AMA PPIS provides critical data to support updates to the MEI and Resource Based Relative Value Scale. Indeed, integration of PPIS data was phased into CMS RVU calculations over the course of 2010-2014. Current rate setting is based on AMA PPIS data, supplemental data sources as required by Congress, and in certain circumstances, crosswalks in indirect PE allocation. PPIS surveys are still in the field through June 2024, with data available to CMS in early 2025. We believe it would be premature to discuss strategies to improve RVU calculations without the latest data. Additionally, the agency is still evaluating trends and impact on data from COVID-19.</p><p>We also caution that any updates to RVUs would cause a redistribution of<strong> </strong>payments based on physicians’ geography and specialty. The same can be said for efforts to rebase and rescale MEI, as was suggested by the discussion.<strong> </strong>Historically, the MEI had been based on 2006 data representing only self-employed physicians. In the calendar year (CY) 2023 PFS final rule, CMS rebased and revised the MEI to use publicly available data sources for 2017 input costs that represent all types of physician practice ownership. However, the agency has delayed implementation of the rebased and revised MEI. This was because while it anticipated that revised weights would not impact overall spending for PFS services, they would impact distribution of payments based on geography and specialty. <strong>We have echoed CMS’ concerns about the redistributive effects of the new MEI and therefore support a further delay in its implementation as we commented in response to the CY 2024 PFS proposed rule.</strong><sup>8</sup> Updating the MEI would cause significant cuts for certain specialties like cardiac surgery, neurosurgery and emergency medicine. In addition to significant specialty redistribution, geographic redistribution also would occur. For example, a significant reduction in the weight of office rent would lead to reductions in payments for urban localities. These changes would, of course, come on top of the other substantial cuts physicians have seen in recent years, including the year over year decreases to the conversion factor. As such, careful evaluation is necessary particularly given current workforce shortage concerns.</p><p><u></u></p><h3>Approach 3: Extend the A-APM Participation Bonus.</h3><p><strong>We support MedPAC’s approach to extend A-APM incentive payments. Indeed, we have urged Congress to do the same to facilitate the transition to value-based payment. </strong>Specifically, the Medicare Access and CHIP Reauthorization Act (MACRA) provided 5% incentive payments for clinicians participating in A-APMs to support non-fee-for-service programs like meal delivery programs, transportation services, digital tools and care coordinators which promote population health, among other services. These incentive payments have been critical to support organizations in transitioning to value-based care. However, MACRA only provided the A-APM bonuses through the CY 2024 payment period. The Consolidated Appropriations Act (CAA) of 2023 extended these bonus payments through 2025 (albeit at 3.5% vs. 5%), and the most recent CAA of 2024 included an extension through 2026 at 1.88%.</p><p>In addition, we encourage MedPAC to recommend removal of CMS’ problematic high- and low-revenue thresholds for APMs. CMS has used this label as a proxy measure to, for example, determine if an organization is supporting underserved populations. Yet, there is no valid reason to conclude that this delineation is an accurate or appropriate predictor of whether an organization treats an underserved population. In fact, analysis suggests that critical access hospitals, federally qualified health centers and rural health centers are predominantly classified as high revenue. Further, both low- and high-revenue organizations are working to address health equity as part of their care transformation work. Assistance investing in these efforts would help across the board.</p><h2>Telehealth Status Report</h2><p>We appreciate MedPAC’s continued discussion of telehealth utilization. Telehealth has always provided patients with increased access and convenience, but waivers implemented during the COVID-19 pandemic have allowed broader portions of the population to experience the benefits of virtual care.</p><p>Prior to the public health emergency (PHE), telehealth utilization was minimal due to limited fee-for-service coverage. Artificial barriers, such as requirements for patients to be located in specific settings (like clinics) or geographies (limited to rural areas), meant that relatively few patients could benefit from telehealth services. Telehealth waivers implemented as a result of the PHE have contributed to improved access for millions of Americans, especially those with transportation or mobility limitations. Continuing these flexibilities is necessary to ensure patients’ continued access to high-quality care. Yet, there is currently a patchwork of temporary waivers for telehealth services that, barring further action, will expire at the end of 2024. If this occurs, we risk a telehealth “cliff” that would negatively impact patient access in all communities.</p><p><strong>Recognizing both the immediate and potential long-term benefits of telehealth, we recommend permanent extension of certain telehealth waivers, as we have communicated to Congress.</strong><sup>9</sup></p><ul><li>Permanently eliminate originating- and geographic-site restrictions, thus allowing telehealth visits to occur at any site where the patient is located, including urban areas and the patient’s home.</li><li>Permanently eliminate in-person visit requirements for tele-behavioral health, which would ensure that patients do not need an in-person visit before initiating virtual treatment.</li><li>Permanently remove distant site restrictions on federally qualified health centers and rural health clinics, which would ensure that they can continue to provide telehealth services.</li><li>Permanently allow payment and coverage for audio-only telehealth services.</li><li>Permanently expand eligible telehealth provider types to include physical therapists, occupational therapists, speech-language pathologists and audiologists.</li></ul><p><strong>We encourage MedPAC to also recommend permanent extension of these provisions to support continued access for patients.</strong></p><p>We also have specific feedback regarding a few of the guardrail proposals the commission has discussed, per below.</p><h3>In-person Visit Requirements</h3><p>e appreciate the concerns identified by many of the commissioners regarding in-person visit requirements and the potential disruption these options would have on existing care patterns, particularly in clinical areas like behavioral health.<strong> </strong>While some patients may benefit from a periodic in-person evaluation, it should be left to clinical judgment when and how frequently these should occur, rather than an arbitrary general requirement. Indeed, adding a requirement for an in-person visit at specific cadences may unintentionally lead to scheduling of additional appointments that otherwise are not clinically necessary simply to “check the box” that the patient had an in-person visit to continue virtual services. <strong>As such, we urge MedPAC to recommend repealing the in-person visit requirements for tele-behavioral health services.</strong></p><p>The CAA of 2021 required that a patient must receive an in-person evaluation six months before they can initiate tele-behavioral health treatment and also must have an in-person visit annually thereafter. This requirement has been waived since the start of the PHE; however, there are concerns about the impact that reinstatement of this policy or enactment of similar in-person visit policies for other specialty areas could have on patient access.</p><p>This requirement was derived as a cost savings measure rather than a policy to support clinical necessity. As such, we are very concerned about its potentially negative impacts on access to care. Specifically, particularly for behavioral health, there is a widening gap between provider capacity and patient demand. Over 30% of the U.S. adult population has reported symptoms of anxiety and depression since the start of the pandemic (compared to 11% prior), and provider shortages in areas like psychiatry are only expected to grow (estimates for 2024 indicate a shortfall of between 14,280-31,091 psychiatrists nationally).<sup>10,11</sup></p><p>We also know that the widening gap between patient demand and provider capacity is being felt even more acutely in rural and underserved communities. This may be part of the reason that the majority of patients utilizing tele-behavioral health services during the pandemic were in rural areas (55%).<sup>12 </sup>These patients are not able to readily see an in-person provider given the shortages in their geographic area and in many cases would need to drive several hours to see the closest provider in person. Therefore, in-person visits may simply not be an option for many patients in rural and underserved communities.</p><h3>Guardrail Policies</h3><p>While we appreciate the commission’s discussion of guardrail policy options to ensure appropriate utilization of telehealth, we point to recent publications issued by the Department of Health and Human Services Office of Inspector General (OIG) that found no widespread instances of fraud, waste and abuse attributed to telehealth during the PHE.<sup>13 </sup>In its most recent telehealth report, the OIG did not make “recommendations because providers generally met Medicare requirements when billing for E/M services provided via telehealth and unallowable payments we identified resulted primarily from clerical errors or the inability to access records.”<sup>14 </sup>In addition, a previous OIG report found that only 0.2% of all telehealth providers were “potentially high-risk” for fraud, waste and abuse during the PHE.<sup>15</sup> Policies should support the 99.8% of providers safely and compliantly delivering services.</p><p>We recognize and appreciate the importance of identifying program integrity risks and establishing reasonable guardrails to prevent fraud, waste and abuse. However, the fact remains that virtually all providers who administered telehealth services during the PHE did so in a compliant manner; as such, concerns about propensity for widespread fraud, waste and abuse are not supported by the data.<strong> Therefore, establishing additional guardrails above and beyond the existing policies for the general Medicare program are not warranted at this point.</strong></p><p><u></u></p><p>MedPAC also considered “outlier guardrail” policies that focus on providers who bill disproportionately more telehealth services. <strong>We are concerned that such a focus also would do little to identify fraud and abuse. </strong>For example, given physician shortages in areas like behavioral health, an increasing number of clinicians are solely providing virtual services. Doing so does not indicate a lack of compliance, but only an effort to provide access to as many patients as possible — something providers should not be penalized for through increased administrative burden and review.</p><p><u></u></p><h3>Incident-to Services</h3><p>We disagree with policy options to remove incident-to billing for telehealth. Doing so would limit the ability to leverage telehealth to support certain services, such as virtual supervision. As an example, prior to the PHE, CMS required that physicians serving in supervisory capacities be physically present in the same office suite when auxiliary personnel performed visits under their supervision and be available if assistance was needed. However, during the PHE, this supervision could be completed virtually using real-time audio-video technology, which supported improved access for geographically dispersed patients. Such flexibilities that leverage geographically dispersed providers are becoming more critical, especially as staffing shortages become more severe. This is also true for hospitals and health systems operating across multiple locations. <strong>Therefore, we encourage MedPAC </strong><em><strong>not</strong></em><strong> to pursue policy options that would remove telehealth incident-to options, as this would limit patient access.</strong></p><p>We thank you for your consideration of our comments. Please contact me if you have questions or feel free to have a member of your team contact Shannon Wu, AHA’s director of payment policy, at <a href="mailto:swu@aha.org">swu@aha.org</a> or 202-626-2963.</p><p>Sincerely,</p><p>/s/</p><p>Ashley B. Thompson<br>Senior Vice President<br>Public Policy Analysis and Development </p><p>Cc: Paul Masi, M.P.P.<br>MedPAC Commissioners<br>__________<br> <br><sup>1</sup> <a href="https://www.healthaffairs.org/content/forefront/30-years-340b-preserving-health-care-safety-net">https://www.healthaffairs.org/content/forefront/30-years-340b-preserving-health-care-safety-net</a></p><p><sup>2</sup> <a href="/340b-case-studies">/340b-case-studies</a> <br><sup>3</sup> <a class="ck-anchor" href="https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs" id="https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs">https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs</a><br><sup>4</sup> <a class="ck-anchor" href="https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_Ch3_MedPAC_Report_To_Congress_SEC.pdf" id="https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_Ch3_MedPAC_Report_To_Congress_SEC.pdf">https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_Ch3_MedPAC_Report_To_Congress_SEC.pdf</a><br><sup>5</sup> These medical necessity requirements include requiring at least 15 hours of therapy per week, a multiple disciplinary approach to care, close physician supervision, rehabilitation nursing and several others.<br><sup>6</sup> The preadmission screening requirement at 42 C.F.R. § 412.622(a)(4)(i) must be conducted by a licensed clinician within 48 hours of admission, include a detailed review of the patient’s condition, history, prior and expected level of function, expected level of improvement, expected duration of treatment, evaluation of patient’s risk for complications, conditions causing the need for rehabilitation, the detailed therapies needed by the patient, and the discharged expectations for the patient. The rehabilitation physician at the IRF must review and concur with the findings of this screening.<br><sup>7</sup> <a class="ck-anchor" href="https://www.ama-assn.org/practice-management/sustainability/medical-liability-premium-hikes-continue-4th-straight-year" id="https://www.ama-assn.org/practice-management/sustainability/medical-liability-premium-hikes-continue-4th-straight-year">https://www.ama-assn.org/practice-management/sustainability/medical-liability-premium-hikes-continue-4th-straight-year</a> <br><sup>8</sup>   <a class="ck-anchor" href="/system/files/media/file/2023/09/aha-comments-on-cms-physician-fee-schedule-proposed-rule-for-calendar-year-2024-letter-9-11-23.pdf" id="/system/files/media/file/2023/09/aha-comments-on-cms-physician-fee-schedule-proposed-rule-for-calendar-year-2024-letter-9-11-23.pdf">/system/files/media/file/2023/09/aha-comments-on-cms-physician-fee-schedule-proposed-rule-for-calendar-year-2024-letter-9-11-23.pdf</a><br><sup>9</sup> <a class="ck-anchor" href="/2024-04-10-aha-house-statement-legislative-proposals-support-patient-access-telehealth-services" id="/2024-04-10-aha-house-statement-legislative-proposals-support-patient-access-telehealth-services">/2024-04-10-aha-house-statement-legislative-proposals-support-patient-access-telehealth-services</a><br><sup>10 </sup><a href="https://www.kff.org/statedata/mental-health-and-substance-use-state-fact-sheets/">https://www.kff.org/statedata/mental-health-and-substance-use-state-fact-sheets/</a></p><p><sup>11</sup> <a href="https://pubmed.ncbi.nlm.nih.gov/29540118/">https://pubmed.ncbi.nlm.nih.gov/29540118/</a> <br><sup>12</sup> <a class="ck-anchor" href="https://www.kff.org/coronavirus-covid-19/issue-brief/telehealth-has-played-an-outsized-role-meeting-mental-health-needs-during-the-covid-19-pandemic/" id="https://www.kff.org/coronavirus-covid-19/issue-brief/telehealth-has-played-an-outsized-role-meeting-mental-health-needs-during-the-covid-19-pandemic/">https://www.kff.org/coronavirus-covid-19/issue-brief/telehealth-has-played-an-outsized-role-meeting-mental-health-needs-during-the-covid-19-pandemic/</a></p><p><sup>13</sup><a href="https://oig.hhs.gov/oas/reports/region1/12100501.asp">https://oig.hhs.gov/oas/reports/region1/12100501.asp</a></p><p><sup>14</sup> <a href="https://oig.hhs.gov/oas/reports/region1/12100501.asp">https://oig.hhs.gov/oas/reports/region1/12100501.asp</a></p><p><sup>15</sup><a href="https://www.pandemicoversight.gov/media/file/telehealthfinal508nov30pdf">https://www.pandemicoversight.gov/media/file/telehealthfinal508nov30pdf</a> <br> </p></div></div></div> Mon, 12 Aug 2024 18:56:30 -0500 Physician Fee Schedule (PFS)/MACRA/QPP <p>In this webinar, AHA staff discussed the recently released <a href="https://chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://public-inspection.federalregister.gov/2024-14828.pdf">CY 2025 Physician Fee Schedule proposed rule.</a> This rule proposes updates to physician fee schedule rates, changes to telehealth services, updates for behavioral health and opioid use disorder, and other aspects of physician payment. The rule also proposes changes to the Medicare Shared Savings Program (MSSP) and Quality Payment Program (QPP) created by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. <br> </p><p>See the <a href="/2024-07-31-medicare-physician-fee-schedule-proposed-rule-cy-2025">AHA Regulatory Advisory</a> for a summary of the rule.</p><p><br>Members can <a href="https://aha-org.zoom.us/rec/share/Ozc6eCdUVw5YQz3c3Mnwjt9iQWektk9lsKKRQJMQHdjjoxJ1f_EKjKU-T_TW1JKw.yyusAHVAqgI0hus4?startTime=1723222710000">view the recording of the session </a>and download slides below for further review.</p> Mon, 12 Aug 2024 17:57:51 -0500 Physician Fee Schedule (PFS)/MACRA/QPP <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) July 10 issued its physician fee schedule (PFS) <a href="https://public-inspection.federalregister.gov/2024-14828.pdf">proposed rule</a> for calendar year (CY) 2025. The rule also includes proposals related to the Medicare Shared Savings Program (MSSP) and the Quality Payment Program (QPP), both of which were created by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. Comments on the proposed rule are due to CMS by Sept. 9. The final rule will be published on or around Nov. 1, and finalized policies will generally take effect Jan. 1, 2025.</p><div class="panel module-typeC"><div class="panel-heading"><h2>Key Highlights</h2><p>CMS’ proposed policies would:</p><ul><li>Reduce the PFS conversion factor by 2.8% to $32.36, as compared to $33.29 in CY 2024.</li><li>Delay implementation of the rebased and revised Medicare Economic Index (MEI) until future rulemaking.</li><li>Extend certain telehealth waivers through 2025, including the waiver allowing for reporting of enrolled practice addresses instead of home addresses when providers perform services from their home.</li><li>Establish new payments for practitioners offering certain behavioral health crisis services and digital mental health treatment as well as for interprofessional consultations by non-physician mental health practitioners.</li><li>Codify policies established in its revised guidance for the Medicare Part B and Part D Drug Inflation Rebate Programs and propose new and revised policies for these programs.</li><li>Revise the data reporting period and phase-in of payment reductions for clinical laboratory tests under the Clinical Laboratory Fee Schedule (CLFS).</li><li>Add provisions for Medicare Parts A and B overpayment, including adoption of  new standards for investigation and identification of overpayments, and extension of deadlines to investigate and calculate overpayments in certain circumstances.</li><li>Exclude suspected anomalous spending from financial calculations for the MSSP.</li><li>Require MSSP accountable care organizations (ACOs) to report a new Advanced Alternative Payment Model (APM) Pathway Plus measure set and streamlines reporting options.</li><li>Add six new Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) for CY 2025 and solicit feedback on mandating MVP participation starting with the 2029 reporting period.</li></ul></div></div><h2><a><span>AHA Take</span></a></h2><p>CMS’ proposed payment update poses a significant threat to patient access to care and provider financial stability, particularly for safety-net providers. Our concern is heightened because this proposed cut comes in the wake of decreases to physician payment over the last two decades. Indeed, inflation and rising input costs continue to outpace reimbursement for services covered by the PFS.</p><p>The AHA also is concerned with policy proposals regarding Medicare Parts A and B overpayments. While we appreciate that CMS is seeking to ensure providers have adequate time to conduct appropriate investigations of potential overpayments, the proposed 180-day window for investigations is not sufficient for large health care providers, such as hospitals and health systems to fully investigate and calculate overpayments. Additional flexibility is needed to support providers that are making good-faith efforts to investigate and calculate overpayments but may not be able to complete this process in six months.</p><p>We thank CMS for proposing to extend certain telehealth flexibilities through 2025. However, the AHA urges CMS to work with Congress to adopt permanent waivers of other provisions, such as eliminating the originating and geographic site restrictions for all telehealth services and expanding telehealth eligibility to certain practitioners. Without action, many of these critical waivers are scheduled to expire at the end of 2024.</p><p>We also are pleased that CMS proposes to exclude suspected anomalous spending from financial calculations for the MSSP, specifically excluding such spending from performance year financial calculations and benchmarking.</p><h2><a><span>What You Can Do</span></a></h2><ul><li><strong>Share </strong>this advisory with your chief medical officer, chief financial officer and other members of your senior management team, as well as key physician leaders and nurse managers.</li><li><strong>Register </strong><a href="https://aha-org.zoom.us/webinar/register/WN_vJNHoZDBRZmc__V7S_2wSw"><strong>here</strong></a><strong> to participate in AHA’s members-only webinar on Friday, Aug. 9 at 1 p.m. ET to discuss the proposed rule.</strong></li><li><strong>Assess </strong>the potential impact of the proposed payment and quality changes on your Medicare revenue and operations.</li><li><strong>Submit comments to CMS with your specific concerns by Sept. 9 at </strong><a href="http://www.regulations.gov"><strong>www.regulations.gov</strong></a><strong>.</strong></li></ul><p>See the PDF below for the complete analysis of the proposed rule.</p></div><div class="col-md-4"><p><a href="/system/files/media/file/2024/07/medicare-physician-fee-schedule-proposed-rule-for-cy-2025-advisory-7-31-2024.pdf" target="_blank" title="Click here to download the Regulatory Advisory: Medicare Physician Fee Schedule Proposed Rule for CY 2025 PDF."><img src="/sites/default/files/2024-07/cover-medicare-physician-fee-schedule-proposed-rule-for-cy-2025-advisory-7-31-2024.png" data-entity-uuid data-entity-type="file" alt="Regulatory Advisory: Medicare Physician Fee Schedule Proposed Rule for CY 2025 cover." width="NaN" height="NaN"></a></p></div></div></div> Wed, 31 Jul 2024 11:47:24 -0500 Physician Fee Schedule (PFS)/MACRA/QPP /lettercomment/2024-07-15-aha-comment-letter-senate-pay-pcps-act-s-4338 <div class="container"><div class="row"><div class="col-md-8"><p>July 15, 2024</p><div class="row"><div class="col-md-6"><p>The Honorable Sheldon Whitehouse<br>U.S. Senate<br>530 Hart Senate Office Building<br>Washington, DC 20510</p></div><div class="col-md-6"><p>The Honorable Bill Cassidy<br>U.S. Senate<br>455 Dirksen Senate Office Building<br>Washington, DC 20510</p></div></div><p>Dear Senators Whitehouse and Cassidy:</p><p>On behalf of AHA’s nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) writes to you to provide comment on your request for information (RFI) based on the Pay PCPs Act (S. 4338).</p><p>We appreciate your leadership in identifying ways to improve physician reimbursement and value-based primary care, as doctors continue to face reimbursement challenges under the physician fee schedule (PFS). Current reimbursement for physicians is woefully inadequate and fails to account for inflation, which continues to outpace updates to reimbursement for services covered under the physician fee schedule. The latest Medicare Trustee’s Report indicates physician reimbursement has dropped over 20% over the last 20 years when accounting for inflation. In addition, there is a widening gap between physician payment and increases in the Medicare Economic Index (a proxy measure for physician cost inflation).</p><p>These reimbursement shortfalls to Medicare physician payment have come at a time of other headwinds. Hospitals and health systems are facing a national staffing emergency which could jeopardize access to high-quality, equitable care for patients and the communities they serve. The Association of Medical Colleges projects a physician shortage of over 86,000 by 2036. We have also seen how increased administrative burden contributes to physician burnout and clinicians leaving the field. The aging beneficiary population is also increasing service demand, while the supply of clinicians continues to decline, in no small part because an increasing proportion of physicians themselves are reaching retirement age. We appreciate the actions Congress has taken to support physicians by passing one-time adjustments to partially offset decreases to the conversion factor. However, we continue to advocate for more sustainable solutions to ensure that updates to the PFS more accurately reflect the cost of delivering services.<a href="#fn1"><sup>1</sup></a></p><p>Considering these challenges, the AHA offers the following feedback on the Pay PCPs Act to ensure that the legislation can achieve the goal of providing more sustainable physician reimbursement and facilitating the transition to value-based primary care.</p><h2>Hybrid Payments for Primary Care Providers</h2><p>The Pay PCPs Act would establish a hybrid per-member-per-month (PMPM) and fee-for-service payment structure in the PFS for primary care. This type of structure can support migration to value-based models. However, we have concerns that the current proposal may result in payment cuts. Given the continued decreases in physician payment, further cuts cannot be absorbed.</p><p>While the proposal states that the PMPM should be “actuarily equivalent” to PFS amounts and “based on historical payments,” we are concerned this still may result in payment decreases for certain providers. The proposal also states that the “Secretary may consider applying certain factors for different types of primary care providers.” This implies that there may be variation in the PMPM depending on the type of provider without clarity of what and how it will be defined.</p><p>The bill also states “The Secretary <em>may</em> assess the need to risk adjust the prospective, PMPM payment and develop appropriate risk adjustment methodologies, taking into consideration <em>only</em> those factors that predict levels of primary care service utilization. Risk adjustment methodologies may incorporate clinical diagnoses, demographic factors, and other relevant factors such as social determinants of health.” We are concerned that this provides latitude for the PMPM to not be risk-adjusted and would also restrict what could be included in the risk adjustment. Limiting the risk adjustment only to those factors that predict primary care utilization does not necessarily account for clinical complexity or social risk factors that may impact care management and the intensity of services required.</p><p>The proposed categories within the PMPM include care management services, communications (e.g., e-mails, phone calls and patient portal messages), behavioral health integration services, and office-based emergency and management (E/M) visits for new and established patients. These vary significantly in terms of effort and time required. For example, the office-based E/M codes for new and established patients vary significantly in time and required medical decision-making (hence the different reimbursement rates). Without appropriate risk adjustment, this provision could cut reimbursement for providers supporting patient panels with higher clinical complexity.</p><p>We are also concerned the bill includes a provision that “the Secretary may continue to pay <em>through reduced fee-for-service payments</em> for all other services not specified in paragraph (2).” This means that providers may receive decreased amounts for services like screenings, preventive services, annual wellness visits, vaccinations and preventive physical exams. These population health activities not only support prevention and early detection and treatment they also support reductions in long-term costs. These payment reductions could decrease access to these services.</p><p>The legislation also proposes to give CMS the ability to award bonus payments based on quality measures. Physicians participating in hybrid primary care payments also would be exempt from participation and payment adjustments under the existing physician Quality Payment Program. The AHA support the concept of bonus payments for delivering higher quality and safer care. We also appreciate that the legislation does not mandate specific measures or measurement topics, which would afford CMS and the field greater flexibility to select the measures that are most relevant and meaningful for assessing care, and to evolve any measures used in the program over time. However, to ensure that CMS uses multi-stakeholder engagement to identify appropriate measures for the model, we recommend that CMS be required to use the multi-stakeholder pre-rulemaking measure review process established under Section 1890A of the Social Security Act to review measures it is considering for bonus payments. Furthermore, to ensure that any bonus payments provided under the model are distributed fairly, CMS should be instructed to ensure measures include appropriate risk adjustment for clinical and social risk factors when relevant. Finally, while we support the concept of bonus payment for quality, we note that the exemption of participating physicians from the QPP may affect the overall distribution of performance in the Merit-Based Incentive Payment System (MIPS). We encourage you to consider giving CMS the flexibility under the MIPS to minimize precipitous payment swings to the physicians still in the program.</p><p>Lastly, this section of the bill does not provide a timeline for when this hybrid payment model would be enacted. Providers need flexibility (the ability to opt in and out of participation) and a gradual on-ramp in adopting value-based models.</p><h2>Cost-Sharing Adjustments for Certain Primary Care Services</h2><p>The Pay PCPs Act would reduce beneficiary cost-sharing for primary care services by 50% under the hybrid payment model. We support reducing beneficiary barriers to receiving care and appreciate your commitment to working toward that objective with this provision.</p><h2>Technical Advisory Committee for Fee Schedule Rates</h2><p>The Pay PCPs Act would establish a new technical advisory committee on relative value unit (RVU) updates and revisions. This technical advisory committee (TAC) would be comprised of 13 members including Medicare providers and providers from the Department of Veterans Affairs, Department of Defense, and primary care and family medicine providers. The committee would be chaired by the Centers for Medicare & Medicaid Services (CMS) who would review valuation methodologies, recommend changes in valuations, evaluate collapsing of codes and identify bundling opportunities.</p><p>We are concerned that the proposed membership of the TAC does not appear to include members who are part of the current Relative Value Scale Update Committee (RUC) process. There is a robust process already in place through the RUC for RVU valuation, updates, and revisions, which includes an expert panel of physicians to make recommendations on resource requirements for medical services. The TAC should be synchronized with these existing infrastructure elements and processes.</p><p>Additionally, we have concerns that the committee would be funded by transfers from the Medical Insurance Trust Fund ($5 million for fiscal years 2025-2029 for implementation and $10 million for research and development). This funding source means that the committee would be resourced out of cuts from other areas within the trust fund, not dedicated appropriations. We urge reconsideration of different ways for how the technical advisory committee is subsidized.</p><h2>Incentivizing Participation in Alternative Payment Models and Value-based Care</h2><p>Our members support the U.S. health care system moving toward the provision of more outcomes-based, coordinated care and are continuing to redesign delivery systems to increase value and better serve patients.</p><p>While the RFI focuses on a proposed hybrid primary care payment model, we would encourage solutions to foster growth in certain Alternative Payment Models (APMs).</p><p>Over the last 14 years, many of our hospital and health system members have participated in a variety of APMs, including primary care APMs and accountable care organizations (ACOs). While the movement to value holds tremendous promise, the transition has been slower than anticipated and more needs to be done to drive long-term system transformations.</p><h3>Programmatic Design Principles</h3><p>There are principles that we believe should guide the development of APM design to make participation more attractive for potential participants. These principles are also relevant to approaching hybrid payment models. These include:</p><ul><li><strong>Appropriate On-ramp and Glidepath to Risk.</strong> Model participants should have an adequate on-ramp and glidepath to transition to risk. They must have adequate time to implement care delivery changes (integrating new staff, changing clinical workflows, implementing new analytics tools, etc.) and review data before initiating the program.</li><li><strong>Adequate Risk Adjustment.</strong> Models should include adequate risk adjustment methodologies for social needs and clinical complexity. This will ensure models do not inappropriately penalize participants treating the sickest, most complicated and underserved patients.</li><li><strong>Voluntary Participation and Flexible Design.</strong> Model designs should be flexible and incorporate features such as voluntary participation, the ability to choose individual clinical episodes, the ability to add components/waivers and options for participants to leave the model(s).</li><li><strong>Balanced Risk Versus Reward.</strong> Models should also balance the risk versus reward in a way that encourages providers to take on additional risk but does not penalize those who need additional time and experience before they can do so. A glidepath approach should be implemented, gradually migrating from upside only to downside risk.</li><li><strong>Guardrails Ensure Long-term Performance Gains.</strong> Models should provide guardrails to ensure that participants do not have to compete against their own best performance and have incentives to remain in models for the long-term.</li><li><strong>Resources to Support Initial Investment.</strong> Upfront investment incentives should be provided to support organizations in transitioning to value-based payment. For example, to be successful in such models, hospitals, health systems and provider groups must invest in additional staffing and infrastructure to support care delivery redesign and outcomes tracking.</li><li><strong>Transparency.</strong> Models’ methodology, data and design elements should be transparently shared with all potential participants. Proposed changes should be vetted with stakeholders.</li><li><strong>Adequate Model Duration.</strong> Model duration should be long enough to truly support care delivery transformation and assess the impact on outcomes. Historically, models have been too short and/or have had multiple, significant design changes even within the designated duration, making it difficult for participants to self-evaluate and change course when necessary.</li><li><strong>Timely Availability of Data.</strong> Model participants should have readily available, timely access to data about their patient populations. We would encourage CMS dedicated resources (staff and technology) to provide program participants with more complete data as close to real-time as possible.</li><li><strong>Waivers to Address Barriers to Clinical Integration and Care Coordination.</strong> This entails waiving Medicare program regulations that frequently inhibit care coordination and work against participants’ efforts to ensure that care is provided in the right place at the right time.</li></ul><h3>Extension of Advanced APM Incentive Payments.</h3><p>The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 provided advanced APM incentive payments (5%) for providers participating in advanced APMs through 2024. These payments were designed to assist with the provision of non-fee-for-service programs like meal delivery programs, transportation services, digital tools and care coordinators which promote population health, among other services.</p><p>We appreciate Congress acting through a provision in the Consolidated Appropriations Act (CAA) of 2023 to extend the advanced APM incentive payments at 3.5% for the CY 2025 payment period and again in the CAA of 2024 to extend through 2026 at 1.88%. While lower than the current 5% incentive payment rate, the incentive provides crucial resources. Because participation in the advanced APM program has fallen short of initial projections, spending on advanced APM bonuses has fallen well short of the amount the Congressional Budget Office projected when MACRA was originally scored. Repurposing the spending shortfall for APM bonuses in future years will accelerate our shared goal of increasing APM adoption. <strong>We urge the extension of these incentive payments.</strong></p><h3>Eliminate Low-revenue/High-revenue Qualifying Criteria.</h3><p>Congress also should urge CMS to eliminate its designation of ACOs as either low- or high-revenue. The agency has used this label as a proxy measure to, for example, determine if an organization is physician-led in order to qualify for advance investment payments. Yet, there is no valid reason to conclude that this delineation — which measures an ACO’s amount of “captured” revenue — is an accurate or appropriate predictor of whether it treats an underserved region. In fact, analysis suggests that critical access hospitals, federally qualified health centers and rural health centers are predominantly classified as high revenue. Further, both low- and high-revenue ACOs are working to address health equity as part of their care transformation work; assistance investing in these efforts would help across the board. <strong>We urge the removal of problematic high/low revenue thresholds that preclude rural and critical access hospitals from obtaining necessary resources for infrastructure investment.</strong></p><h3>Support Investment in Resources for Rural Hospitals.</h3><p>Congress should encourage CMS to continue investing resources and infrastructure to support rural hospitals’ transition to APMs. According to a Government Accountability Office report, only 12% of eligible rural providers in 2019 participated in the advanced APM program; of those that participated, just 6% of rural providers participated in two or more advanced APMs, compared to 11% of those not in rural areas. These models are often not designed to allow broad rural participation, and the AHA supports continued efforts to better support rural hospitals’ migration to advanced APM models. <strong>In particular, the AHA since 2021 has supported the establishment of a Rural Design Center within the Center for Medicare and Medicaid Innovation (CMMI), which would focus on smaller-scale initiatives to meet rural communities’ needs and encourage participation of rural hospitals and facility types. A Rural Design Center would help develop and increase the number of new rural-focused CMMI demonstrations, expand existing rural demonstrations and create separate rural tracks within new or existing CMMI models.</strong></p><h2>Conclusion</h2><p>We appreciate your efforts to address the primary care payment system. We look forward to continuing working with you on this important initiative.</p><p>Sincerely,</p><p>/s/</p><p>Lisa Kidder Hrobsky<br>Senior Vice President<br>Advocacy and Political Affairs</p><hr><ol><li id="fn1"><a href="/lettercomment/2024-06-17-aha-letter-senate-finance-committee-medicare-part-b-white-paper" target="_blank" title="AHA Letter to Senate Finance Committee on Medicare Part B White Paper">/lettercomment/2024-06-17-aha-letter-senate-finance-committee-medicare-part-b-white-paper</a></li></ol></div><div class="col-md-4"><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2024/07/AHA-Comment-Letter-on-the-Senate-Pay-PCPs-Act-S-4338-20240715.pdf" target="_blank" title="Click here to download the AHA Comment Letter on the Senate Pay PCPs Act (S. 4338) PDF.">Download the Letter PDF</a></div><p><a href="/system/files/media/file/2024/07/AHA-Comment-Letter-on-the-Senate-Pay-PCPs-Act-S-4338-20240715.pdf" target="_blank" title="Click here to download the AHA Comment Letter on the Senate Pay PCPs Act (S. 4338) PDF."><img src="/sites/default/files/inline-images/Page-1-AHA-Comment-Letter-on-the-Senate-Pay-PCPs-Act-S-4338-20240715.png" data-entity-uuid="ab166105-6512-423b-8568-dd31dada9782" data-entity-type="file" alt="AHA Comment Letter on the Senate Pay PCPs Act (S. 4338) page 1." width="692" height="900"></a></p></div></div></div> Mon, 15 Jul 2024 16:12:16 -0500 Physician Fee Schedule (PFS)/MACRA/QPP