The Centers for Medicare & Medicaid Services (CMS) aims to further advance its overall value-based care strategy with the finalized 2024 Medicare Physician Fee Schedule (PFS) – adding ways for medically complex, high-cost beneficiaries like those in nursing homes to participate in Medicare Shared Savings Programs (MSSPs).

Additionally, CMS therapy assistants can be more generally supervised for remote therapeutic monitoring services with changes in the PFS for 2024.

The agency also finalized its proposal to make payment when practitioners train caregivers to support patients with certain diseases, including dementia, when carrying out a treatment plan in 2024.

“Medicare will pay for these services when furnished by a physician or a non-physician practitioner (nurse practitioners, clinical nurse specialists, certified nurse-midwives, physician assistants, and clinical psychologists) or therapist (physical therapist, occupational therapist, or speech language pathologist) as part of the patient’s individualized treatment plan or therapy plan of care,” CMS said.

The PFS was finalized late Thursday, with payment amounts reduced by 1.25% overall compared to 2023. CMS is also finalizing increases in payment for visits for many services, such as primary and longitudinal care. Overall, the finalized 2024 PFS conversion factor is $32.74, a decrease of $1.15, or 3.4%, from CY 2023.

The rule involves numerous updates to accountable care organizations (ACOs), including financial benchmarking methodology for ACOs starting in January 2024 and subsequent years. There will now be a cap to risk score growth in an ACO’s regional service area.

The same risk adjustment methodology will be applied to benchmark and performance years, eliminating overall negative regional adjustment. CMS hopes this will encourage ACO participation by providers caring for medically complex, high-cost beneficiaries.

“We are finalizing our proposal to modify the calculation of the regional component of the three-way blended benchmark update factor (weighted one-third [Accountable Care Prospective Trend], and two-thirds national-regional blend), for agreement periods beginning on January 1, 2024, and in subsequent years,” according to a statement from the agency.

Such broadened criteria and an attractive high needs population track may be a major draw for those in the skilled nursing space, leaders said in October.

CMS anticipates this change will improve accuracy of regional update factors, if an ACO operates in an area with high-risk growth. The move also maintains a disincentive against coding intensity for ACOs with high market share.

“We sought to reduce the impact of negative regional adjustments in several ways for agreement periods beginning on January 1, 2024, and subsequent years, to incentivize ACOs that serve high-cost beneficiaries to join or continue to participate in the Shared Savings Program,” the agency said in a statement. “ACOs that would have had an overall negative regional adjustment under the methodology adopted in the CY 2023 PFS final rule will benefit from this policy.”

Potential future developments to MSSP policies include incorporating a higher risk track than the ENHANCED track, modifying the amount of prior savings adjustment and potential refinements to the Accountable Care Prospective Trend.

While advocacy groups like the National Association of ACOs (NAACOS) appreciated the agency’s efforts to engage more high risk beneficiaries, there was disappointment that “several favorable policies only apply to new or renewing ACOs in 2024, leaving out existing ACOs,” NAACOS President and CEO Clif Gaus said in a statement.

The agency hopes these changes will increase MSSP participation by 10% to 20%.

ACO beneficiary assignment methodology added a third step as well to provide greater recognition of the role of nurse practitioners, physician assistants and clinical nurse specialists in delivering primary care services.

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On May 10, 2023, HHS announced that many telehealth and teleprescribing flexibilities will remain in place after the end of the COVID-19 Public Health Emergency (PHE) on May 11, 2023. Congress extended many telehealth flexibilities under the Medicare program through December 31, 2024, via the 2023 Consolidated Appropriations Act. The Drug Enforcement Agency (DEA) and HHS Substance Abuse and Mental Health Services Administration (SAMHSA) also extended behavioral telehealth and prescribing flexibilities through November 11, 2023, with some opioid flexibilities through May 11, 2024, pending the issuance of new final rules. HIPAA flexibilities have expired but will be phased out through a 90-day transition period.

Telehealth Coverage

Coverage for telehealth following the expiration of the PHE will vary by program and plan type.

• Medicare. During the PHE, individuals with Medicare had broad access to telehealth services without the application of geographic or location limits as a result of Medicare telehealth waivers issued by the HHS Secretary. Through the 2023 Consolidated Appropriations Act, Congress extended many telehealth flexibilities for Medicare patients, including waiving geographic limitations for telehealth access, allowing patients to stay in their home for telehealth visits rather than traveling to a health care facility, and permitting some visits to be conducted via audio-only technology if the patient is unable to use both audio and video. These flexibilities are set to expire on December 31, 2024, but after the expiration, some Accountable Care Organizations (ACOs) may permit participating practitioners to offer telehealth services to patients without an in-person visit, regardless of where the patient lives.
• Medicare Advantage. Medicare Advantage Organizations (MAOs) must cover, at a minimum, the telehealth benefits provided by Medicare. However, MAOs may offer additional flexibilities.
• Medicaid and CHIP. Telehealth flexibilities under Medicaid and CHIP vary by state, and states continue to have great flexibility with respect to determining the scope of coverage. HHS is encouraging states to continue to cover Medicaid and CHIP services delivered via telehealth, and CMS published a State Medicaid & CHIP Telehealth Toolkit and a Supplement that identify policies that should be addressed by states to facilitate a broader adoption of telehealth.
• Private Health Insurance. Telehealth flexibilities for private insurance plans varied by insurance plan during the PHE. The PHE’s conclusion will not change this variation between payors.

HIPAA Rules

HHS Office of Civil Rights (OCR) exercised enforcement discretion for providers using non-HIPAA compliant technologies for telehealth during the COVID-19 PHE. The discretion applied to telehealth provided for any reason, regardless of whether the telehealth service was related to the diagnosis and treatment of health conditions related to COVID–19. OCR announced that the enforcement discretion will expire with the PHE on May 11, 2023. OCR is providing a 90-calendar day transition period for covered health care providers to make any changes to their operating systems to ensure that telehealth is provided in a private and secure manner. OCR will exercise enforcement discretion and will not impose penalties on health care providers providing care in good faith during the transition period. The transition period will expire on August 9, 2023.

Tele-Behavioral Health and Prescribing

HHS also clarified a number of flexibilities specific to tele-behavioral health and prescribing of opioids.

• Opioid Prescribing without In-Person Evaluation. SAMHSA and the DEA have extended flexibilities for Opioid Treatment Programs (OTPs) through May 11, 2024. OTPs are exempt from performing in-person physician evaluations for patients who will be treated with buprenophrine if a program physician, primary care physician, or authorized healthcare professional supervised by a program physician determines that an adequate evaluation of the patient can be accomplished via telehealth. SAMHSA has proposed to make this flexibility permanent.
• Take Home Doses. In March 2020, SAMHSA issued an exemption to OTPs that allowed a state to request a “blanket exception” for stable patients in OTPs to receive twenty-eight days of take-home doses of the patient’s medication for opioid use disorder, and for less stable patients to receive fourteen days of a take-home dose if the OTP believes that the patient can safely handle it. OTPs, states, and stakeholders have reported increased treatment engagement and improved patient satisfaction with care as a result of this flexibility, with few incidents of misuse or mediation diversion. SAMHSA released new guidance in April 2023 that will be effective on the conclusion of the PHE, and will be effective through May 11, 2024, or until HHS publishes final rules revising 42 C.F.R. Part 8. States will need to affirmatively register for this exemption for the OTPs in the state to use it. SAMHSA has proposed to make this flexibility permanent.
• Controlled Substance Prescribing via Telehealth. DEA and SAMHSA issued a temporary rule extending the controlled substance telemedicine flexibilities through November 11, 2023. Under this rule, practitioners who have established relationships with patients via telemedicine prior to November 11, 2023, may continue prescribing medications to these patients without an in-person medical evaluation regardless of whether the practitioner is registered with the DEA in the state in which the patient is located through November 11, 2024. DEA and SAMHSA plan to issue updated final rules regarding controlled medication prescribing via telehealth by November 11, 2023.
• Behavioral Healthcare Provider License Portability. HHS expressed continued support for increased licensure portability, which enables health care professionals licensed in one state to practice health care in another state through a transfer, recognition, or issuance of a license with decreased limitations or restrictions. HHS recognized a continued shortage of behavioral health providers and encouraged states to take advantage of resources to support interstate licensure, and other licensing flexibilities.

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As the nation’s largest health care payer, responsible for more than one in five dollars spent on health care within the United States, Medicare plays a key role in transitioning the health care system away from fee-for-service, which incentivizes quantity of care, and towards value-based care, which incentivizes high-quality care and smarter spending. The passage of the Affordable Care Act served as a catalyst for innovative payment and care delivery models that reward better care, smarter spending, and health in all facets of life. Over the past decade, Medicare has made significant progress in moving towards value and advancing accountable care.  

In Traditional Medicare, the Medicare Shared Savings Program brings together groups of doctors, hospitals, and other health care providers as Accountable Care Organizations (ACOs) to take responsibility for improving quality of care, care coordination, and health outcomes for groups of beneficiaries. The Shared Savings Program went from recruiting its first health care provider participants in 2011 to its current status as one of the largest value-based purchasing programs in the country, covering more than 11 million people with over 525,000 participating clinicians. Physician groups in the Shared Savings Program achieve higher quality ratings compared to their counterparts not in the program, and the program has saved the Medicare Part B Trust fund $6 billion dollars or more over the past five years.

The relationship between a Shared Savings Program Accountable Care Organization (ACOs) and their assigned beneficiaries is a good example of an accountable care relationship. In Medicare Advantage (MA), which makes up 45 percent of Medicare enrollment, an increasing percentage of payments to health care providers have also been made in advanced value-based arrangements.

Reflecting on the significant progress towards value-based care across the nation, CMS announced the ambitious goal of having all people with Traditional Medicare in an accountable care relationship with a health care provider by 2030 in its CMS Innovation Center strategy refresh and vision for Medicare. The agency is additionally working to ensure MA reflects these value goals. CMS also recently released the National Quality Strategy, with quality being an integral component of value. This article builds off of these recent publications to outline a cohesive Value-Based Care strategy for Medicare along three main pillars: alignment, growth, and equity.

Alignment

From a health care provider perspective, alignment of value-based payment arrangements within Medicare and across multiple payers is critical, since providers often interface with a multitude of payers across Traditional Medicare, MA, Medicaid, the Marketplaces, and other commercial insurance. If value-based arrangements are not aligned, provider organizations face challenges focusing attention on the right quality metrics and making the investments necessary to improve care. Aligning key aspects of value-based arrangements across CMS can help set the stage for broader synchronization of our health system and move health care providers to higher levels of delivery system transformation.

First, CMS is exploring how to better leverage and align its programs to move toward more accountable care models and programs, which can help transform care delivery. The Merit-based Incentive Payment System (MIPS) is an important pay-for-performance program in Traditional Medicare, whereby clinicians get positive, neutral, or negative adjustments to their fee-for-service payments based on their performance in four categories: quality, cost, promoting interoperability, and improvement activities (improving care processes, enhancing patient engagement, and increasing access). MIPS and more advanced value-based arrangements operate on a continuum, with clinicians making decisions annually about whether to continue in MIPS or join more advanced payment models. MIPS should be the welcome mat, rather than the landing-pad, so that through participation in MIPS, clinicians are prepared to progress to the Shared Savings Program or other value-based arrangements.

Currently, MIPS is structured in such a way to accommodate as much clinician participation as possible. But allowing clinicians to select their own quality measures out of almost two hundred options means that they may identify the most financially favorable measures based on their current performance, rather than truly making the investments to improve care delivery that could be important stepping stones to accountable care. In contrast, MIPS Value Pathways (MVPs), which CMS has been developing and implementing over the past few years, are a discreet set of measures for each specialty, allowing for quality to be compared across clinicians within a specialty  and could help drive accountable care. For example, a primary care MVP that uses the same quality measures as those used in the Shared Savings Program and other advanced value-based arrangements could help clinicians develop familiarity with the quality measures used in these more advanced programs, thereby easing the transition to accountable care.

Second, also in Traditional Medicare, CMS is aligning value-based arrangements across the Center for Medicare and the Innovation Center. As one example, CMS’s recently published strategy for ACOs describes how this alignment is important to prevent selective participation by health care providers and to ensure that lessons learned lead to improvements and advancements in quality, equity, and value in the Shared Savings Program and other ACO models. 

Third, CMS is exploring ways to align MA with value-based efforts in Traditional Medicare, including the Shared Savings Program and Innovation Center models. Currently, CMS has limited insight into the types and quality of value-based arrangements between plans and health care providers in MA.  The evaluation of the Innovation Center’s MA Value-based Insurance Design (VBID) model has not focused on the effect of each individual benefit design change being tested in the model, which means that the model has not driven decision-making by plans, provider partners, and CMS in the MA program to the extent it could. Working across centers, CMS intends to better identify MA policy improvements that are core to alignment, so that policies that drive value can be aligned across MA and Traditional Medicare.

Finally, CMS intends to further align our Medicare value-based efforts with Medicaid. Alignment between Medicare and Medicaid, the two largest public purchasers of health care, would amplify health system transformation. Since Medicaid movement towards value-based care occurs differently across each state, the Health Care Payment Learning and Action Network recently launched State Transformation Collaboratives in Arkansas, California, Colorado, and North Carolina to provide an opportunity for multi-payer alignment between Medicare and Medicaid at the state level.

Growth

Growth of accountable care relationships in both Traditional Medicare and MA can improve quality and increase savings for Medicare beneficiaries by promoting innovative care delivery that better provides whole-person care. However, over the past several years, the number of beneficiaries assigned to ACOs participating in the Shared Savings Program has plateaued. Barriers to entry for small physician group practices and health care providers with less capital, who tend to predominantly serve underserved communities, represent limitations to growth. The use of regional expenditures to adjust ACO benchmarks may also provide a limited business case for participation amongst health care providers who are less efficient.

In the recent Calendar Year 2023 Physician Fee Schedule proposed rule, CMS proposed a number of changes to address these barriers in the Shared Savings Program. First, the agency proposed creation of new incentive payments for smaller ACOs to provide upfront capital to build the infrastructure necessary to succeed in the program and better address the social- determinants-of-health needs of underserved people with Medicare. These changes are based on the CMS Innovation Center’s ACO Investment Model, tested from 2016-2018 and successful at bringing ACOs treating rural and underserved communities into the Shared Savings Program. Additionally, CMS is proposing that smaller ACOs that are inexperienced with performance-based risk be allowed to remain in upside-only arrangements for their initial five-year participation agreement with Medicare, so that they can gradually develop familiarity with the shift towards value and recruit additional health care providers that might be reticent to quickly adopt downside risk. Finally, CMS has proposed financial benchmarking changes, such as updating benchmarks based in part on projections of per capita cost growth, and is seeking comment on further movement towards administrative benchmarks in the future. The expectation is that these benchmarking proposals would provide a better business case for participation for all different types of health care providers and fuel further growth in ACOs. 

There are also opportunities to grow the specialty footprint in value-based care. CMS is encouraging specialists to report the specialty MVP that is most relevant for their practice, which would help develop a set of comparable quality metrics that could be aligned with the quality metrics in specialist-focused value-based arrangements. CMS is further exploring how to best facilitate the intersection between specialist- and primary-care-focused models, with the goal of growing specialist involvement in accountable care and driving improvements in quality, cost, and patient experience through better coordinated care.

In MA, though progress has been made in moving towards value, we are eager to see more aligned growth in value-based arrangements to deliver better care to beneficiaries. The progress towards advanced value-based arrangements that has been reported in MA offers little insight into aspects of payment such as risk sharing, benchmarking, quality rewards, alignment with other value-based programs, and these mechanisms’ overall impact on patient outcomes. There is a great opportunity to gain knowledge on the relative successes of these types of arrangements in MA and build off of them, which becomes even more pressing as enrollment in MA grows. Thus, even as we encourage growth in accountable models, we are also striving to improve oversight and transparency so that we know the impact of these accountable care arrangements on people enrolled in MA plans.

Equity

Health equity is fundamental to high-quality care for all people. For far too long, profound inequities have existed across our health care system that are often rooted in intersecting social determinants of health. The design of value-based arrangements in Medicare can be an important tool for advancing health equity by encouraging the movement of care upstream to address the health-related social needs and disparities that can lead to or exacerbate poor health outcomes. There have been proposals (described above) within the Shared Savings Program to bring the benefits of accountable care to the communities that need them most by increasing participation among ACOs treating rural, underserved, higher cost, or more clinically complex populations.

Additionally, CMS recently proposed to adopt a health equity adjustment to quality performance scores in the Shared Savings Program, which would reward ACOs that provide high-quality care to people who are dually eligible for Medicare and Medicaid or who live in underserved communities. This proposed adjustment avoids possible pitfalls of pay-for-equity approaches, in that it does not risk-adjust away disparities in care and does not set lower standards for underserved populations. And through the ACO REACH Model, the Innovation Center is testing a novel benchmark adjustment that rewards ACOs that serve a higher proportion of underserved beneficiaries. If this approach proves successful in addressing health disparities, it may inform future policy in the Shared Savings Program.

CMS is also seeking comment on ways to promote health equity across Medicare through its value-based programs. For example, for hospitals subject to hospital readmission reduction program (HRRP), researchers have identified that patients’ poverty, disability, housing instability, and residence in a disadvantaged neighborhood were associated with higher readmission rates, and safety net institutions are disproportionately penalized as a result. Accounting for social risk factors can reduce negative unintended consequences of the HRRP, so Medicare requested comment on the concept in a recently proposed rule.

Equity also presents further opportunity for alignment across programs. In MA and Medicare Part D, the Star Ratings system currently rewards insurance plans for high performance on quality measures; these quality measures, in turn, are often incorporated into the value-based contracts between plans and health care providers. However, Star Ratings have not historically considered equity beyond individual measure case-mix adjustments. CMS solicited comments on a health equity index that would—similar to the approach described above in the Shared Savings Program—reward plans that perform well for those beneficiaries who are dually eligible for Medicare and Medicaid, receive low-income subsidies, or who are persons with disabilities. CMS is committed to ensuring the highest-quality care for underserved communities served by MA and Part D plans and will take comments submitted on the health equity index discussion into consideration for future efforts.

Finally, CMS is identifying how our nation’s health care infrastructure can better address social needs for people with Medicare. CMS is newly requiring that special needs plans screen for housing, food, and transportation through an annual health risk assessment. CMS has also proposed adoption of social-determinants-of-health quality measures in the Hospital Inpatient Quality Reporting (IQR) Program to assess whether health care providers are appropriately screening for health-related social needs; CMS has also solicited comment on a similar measure for MA Star Ratings.

However, screening for health-related social needs, in and of itself, may not be sufficient if local community-based organizations— the organizations that most often address such needs—do not have the capacity to handle increased referrals. As such, Medicare has proposed that the new advanced incentive payments in the Shared Savings Program discussed above can be used to address health related social needs in collaboration with local community-based organizations, one of the first times Traditional Medicare payments would be permitted for such use. CMS will also partner with other federal agencies, such as the Administration for Children and Families and the Administration for Community Living, to link community-based organizations with ACOs, and with the Office of the National Coordinator for Health IT on ways that the health information technology infrastructure can further facilitate a team-based approach to care for people across the health care and social service sectors.

Summing Up

These three strategic priorities of alignment, growth, and equity are interrelated and reinforce each other. Alignment and growth are connected: When value-based models are aligned it becomes easier for health care providers to understand how they can succeed and provide high quality care, which lowers barriers to participation and accelerates adoption of value-based arrangements. Growth and equity are also connected: When value-based models and programs are intentionally designed with equity in mind, it can improve participation by health care providers in underserved communities and increasingly drive growth towards value-based care. Finally, equity and alignment are intertwined: As strategies to advance equity are developed and advanced across all programs and initiatives within CMS, it sends a signal to our partners that we are working together to advance equity across our nation’s health care system.

To achieve these objectives, CMS is looking forward to close partnerships with health care providers, payers, people with Medicare, and stakeholders across our health care system. CMS remains committed to advancing value-based care in a way that best meets the needs of people with Medicare, who deserve high-quality, equitable care.

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Physician payment cuts are coming, significant changes to E/M services are finalized, and key reporting revisions are hitting telehealth and audio-only services, according to the final 2023 Medicare physician fee schedule.

Proposed payment cuts that drew vocal criticism from physician advocacy groups will move forward as planned, as CMS announced a 4.5% reduction to the 2023 Medicare Part B conversion factor (CF), effective January 1.

The CF will fall to $33.0607 in 2023, down from $34.6062 in 2022, largely due to budget neutrality adjustments. The final CF for 2023 is two cents lower than the rate CMS first proposed in July, according to Part B News.

The anesthesia conversion factor will also take a hit next year, down 4.4% as proposed.

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Much like what we heard from the proposed rule, medical groups are not faring well with the finalized rule.

“As expected, CMS finalized a substantial reduction to the conversion factor — negatively impacting physician reimbursement across the board. It is more critical than ever that Congress act to avert these cuts, as well as the 4% PAYGO sequestration, before the end of the year,” MGMA Senior Vice President Government Affairs Anders Gilberg said in a release.

“Ninety percent of medical practices reported that the projected reduction to 2023 Medicare payment would reduce access to care. This cannot wait until next Congress—there are claims processing implications for retroactively applying these policies,” Gilberg said. “MGMA looks forward to working with both Congress and the Administration to mitigate these cuts and develop sustainable payment policies to allow physician practices to focus on treating patients instead of scrambling to keep their doors open.”

Jack Resneck Jr., M.D. president of the American Medical Association (AMA) noted the same grievances and doubled down on the negative impact to access to care.

“The Medicare payment schedule released today puts Congress on notice that a nearly 4.5 percent across-the-board reduction in payment rates is an ominous reality unless lawmakers act before Jan. 1. The rate cuts would create immediate financial instability in the Medicare physician payment system and threaten patient access to Medicare-participating physicians. The AMA will continue working with Congress to prevent this harmful outcome,” Resneck said.

Updates to E/M, telehealth, and more

CMS confirmed in the final rule that it will adopt the framework of the AMA’s revised E/M guidelines for facility and residential visits, including payment based on medical decision-making or time.

CMS intends to adopt the telehealth waiver extension that Congress passed in Consolidated Appropriations Act of 2022. The extension locks in a wide range of telehealth waivers for 151 days after the PHE expires, including the audio-only exceptions that have been popular with providers; the waiver of geographic and other limits ordinarily required for telehealth services; and the ability of therapists, occupational therapists, speech-language pathologists, and audiologists to bill such codes under telehealth.

For the Merit-based Incentive Payment System (MIPS), the category weight in 2023 will be 30% for Quality, 30% for Cost, 15% for Improvement Activities, and 25% for Promoting Interoperability. The data completeness threshold rises from 70% to 75%.

CMS will take applications for the MIPS Value Pathways (MVP) program that will eventually replace the current MIPS structure. The agency will also add five new MVPs to the seven in its MVP inventory.

As proposed, CMS will front money to ACOs with low revenue that treat underserved communities with advance investment payments (aka advance shared savings payments). The agency also will provide “greater flexibility in the progression to performance-based risk” to some ACOs, a CMS press release says, “allowing these organizations more time to redesign their care processes to be successful under risk arrangements.”

CMS also will extend its incentive for voluntary reporting of eCQMs/MIPS CQMs through performance year 2024 (at which time it will replace the Web Interface reporting method for all Shared Savings ACOs) and institute a “health equity adjustment” for Medicare Shared Savings Program (MSSP) performance reporting. 

“Premier applauds CMS for finalizing reforms to certain aspects of the MSSP that incentivize provider participation. As Premier has long advocated, we must ensure that providers in ACOs have an adequate budget, and that we create incentives for rural and other vulnerable providers to move to value, ” Soumi Saha, senior vice president of government affairs at Premier, said in a release. “We remain disappointed, however, that CMS is continuing to distinguish between low- and high-revenue for ACOs, especially in light of a Premier analysis demonstrating the differences between ACOs have more to do with cherry picking locations and attribution methodology than with real performance,” Saha said.

National Association of ACOs (NAACOS) President and CEO Clif Gaus, Sc.D., had a similar sentiment.

“Today’s finalized changes to Medicare’s largest ACO program bring a win to patients and will absolutely help providers deliver accountable care to more beneficiaries. NAACOS thanks CMS for its leadership and following through on its promise to create a stronger Medicare program by improving accountable care models and speeding the movement toward value for all patients. On balance, we believe this final rule will grow participation in accountable care organizations, which have already generated billions of dollars of savings for our health system,” Gaus said.

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WASHINGTON — Physician groups expressed concerns over what one group called a “substantial” decrease in Medicare fee-for-service physician payments under a final rule for 2023 issued Tuesday by the Centers for Medicare & Medicaid Services (CMS).

The 2023 Medicare Physician Fee Schedule includes a 4.5% decrease in the conversion factor — the multiplier that Medicare applies to relative value units (RVUs) to calculate reimbursement for a particular service or procedure under Medicare’s fee-for-service system. After budget neutrality adjustments required by law, CMS explained that the final conversion factor for the 2023 fee schedule is $33.06, which is a drop of $1.55 from the 2022 fee schedule conversion factor of $34.61. The $33.06 figure is slightly lower than the $33.08 conversion factor suggested in the proposed rule.

In a press release, Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association (MGMA) called the 4.5% drop “expected” but “substantial.”

“Ninety percent of medical practices reported that the projected reduction to 2023 Medicare payment would reduce access to care,” Gilberg said, adding that the changes cannot wait until the next Congress. “MGMA looks forward to working with both Congress and the administration to mitigate these cuts and develop sustainable payment policies to allow physician practices to focus on treating patients instead of scrambling to keep their doors open.”

Transition to Value-Based Care

CMS said in a fact sheet that it is hoping to accelerate the transition to value-based care and to “reverse certain trends,” including the number of beneficiaries assigned to accountable care organizations (ACOs). The agency is especially hoping to increase the number of beneficiaries in a particular type of ACO known as the Medicare Shared Savings Program (MSSP), whose enrollment CMS said has “plateaued.”

Data have shown access to MSSPs has had lower representation among higher-spending populations — including sicker patients on whom Medicare spends more money per capita — and among minority groups, including Black, Hispanic, Asian Pacific Islander, and American Indian/Alaska Native beneficiaries. Those groups are all less likely to be assigned to a shared savings program than non-Hispanic white beneficiaries, noted the fact sheet.

To that end, the agency is finalizing policies to advance shared savings payments, known as “advanced investment payments,” to low-revenue ACOs, those that don’t have experience with performance-based risk, those that are new to shared savings programs, and those that care for underserved populations.

“These advance investment payments will increase when more beneficiaries who are enrolled in the Medicare Part D low-income subsidy (LIS), are dually eligible for Medicare and Medicaid, live in areas with high deprivation,” or some combination of these factors, “are assigned to the ACO, and these funds will be available to address the social and other needs of people with Medicare,” CMS said.

Making Some Telehealth Changes Permanent

With regard to telehealth, the agency reaffirmed its intention to extend certain telehealth provisions enacted during the pandemic for a period after the COVID-19 public health emergency (PHE) ends, in order to collect data with an eye toward making certain services permanently available through telehealth; doing so also would be in keeping with the Consolidated Appropriations Act (CAA) of 2022, according to a CMS fact sheet.

“These policies, such as allowing telehealth services to be furnished in any geographic area and in any originating site setting (including the beneficiary’s home); allowing certain services to be furnished via audio-only telecommunications systems; and allowing physical therapists, occupational therapists, speech-language pathologists, and audiologists to furnish telehealth services, will remain in place during the PHE for 151 days after the PHE ends,” the fact sheet states.

Additionally, the CAA of 2022 also postpones the in-person visit requirement for mental health services delivered via telehealth until 152 days after the end of the PHE.

The rule also includes a proposal allowing physicians to continue billing using the place of service, or POS, indicator that would have been used if the service had been part of an in-person visit, along with the inclusion of a modifier to indicate that the services were in fact delivered via telehealth.

Acknowledging the need to expand access to behavioral health for Medicare beneficiaries, CMS has made the following changes:

• Allowing certain behavioral health clinicians, such as licensed professional counselors and licensed marriage and family therapists, to provide services under “general” supervision of a Medicare practitioner, instead of direct supervision, when those services are provided “incident to the services of a physician”
• Enabling Medicare to pay opioid treatment programs that use telehealth to initiate treatment for patients with buprenorphine
• Clarifying that opioid treatment programs can bill Medicare for services provided by mobile units, such as vans

Other Stakeholders Respond to Cuts

Like MGMA, the American Medical Group Association (AMGA) also urged Congress to reverse the cuts to the conversion factor, arguing that they would further strain medical group and health system members that are “facing financial headwinds due to inflation, increased supply costs, and an unprecedented shortage in the healthcare workforce.”

“This reduction, combined with a looming Pay-As-You-Go (PAYGO) cut and the recently reinstituted Medicare sequester, would cut Medicare payments to medical groups and health systems by more than 10% starting in January 2023,” AMGA noted in a press release. (PAYGO, a 2010 statute, calls for any new bill to be budget-neutral and not increase forecast deficits.)

“This annual brinksmanship with Medicare payments is not sustainable and does not support better care for patients,” said Jerry Penso, MD, president and CEO of AMGA, adding that such cuts hurt patients by limiting members’ ability to invest in the infrastructure, technology, and staff that members need to transition to value-based care.

The National Association of ACOs (NAACOS) praised many of the CMS changes, particularly those targeting the MSSP.

“Today’s finalized changes to Medicare’s largest ACO program bring a win to patients and will absolutely help providers deliver accountable care to more beneficiaries,” wrote NAACOS President and CEO Clif Gaus, ScD, in a press release. “On balance, we believe this final rule will grow participation in accountable care organizations, which have already generated billions of dollars of savings for our health system.”

However, Gaus did raise lingering concerns over using a “prospectively projected administrative growth factor” as ACO benchmarks or spending targets, which he said would hurt more than a third of ACOs. “Instead, we ask for more collaboration between CMS and the ACO community to build a better bridge to a more sustainable benchmarking strategy.”

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On November 01, 2022, the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2023 Physician Fee Schedule (PFS) final rule that includes changes to the Medicare Shared Savings Program (Shared Savings Program) to advance CMS’ overall value-based care strategy of growth, alignment, and equity.

Through the changes we finalized, we seek to reverse certain recent trends^[1],[2] in the Shared Savings Program: in recent years growth in the number of beneficiaries assigned to ACOs in the Shared Savings Program has plateaued; higher spending populations are increasingly underrepresented in the program since the change to regionally-adjusted benchmarks; and access to ACOs appears inequitable as shown by data indicating that Black (or African American), Hispanic, Asian/Pacific Islander, and American Indian/Alaska Native beneficiaries are less likely to be assigned to a Shared Savings Program ACO than their Non-Hispanic White counterparts.

Several of the provisions in this final rule are expected to advance equity within the Shared Savings Program. Based on feedback from health care providers treating rural and underserved populations that they require upfront capital to make the necessary investments to succeed in accountable care and may also need additional time under a one-sided model before transitioning to performance-based risk, we are finalizing policies to advance shared savings payments (referred to as advance investment payments) to low revenue ACOs, inexperienced with performance-based risk Medicare ACO initiatives, that are new to the Shared Savings Program (that is, not a renewing ACO or a re-entering ACO), and that serve underserved populations. These advance investment payments will increase when more beneficiaries who are enrolled in the Medicare Part D low-income subsidy (LIS), are dually eligible for Medicare and Medicaid, live in areas with high deprivation (measured by the area deprivation index (ADI)), or a combination of those, are assigned to the ACO, and these funds will be available to address the social and other needs of people with Medicare. We are also finalizing other modifications to certain existing policies under the Shared Savings Program to support organizations new to accountable care by providing greater flexibility in the progression to performance-based risk, allowing these organizations more time to redesign their care processes to be successful under risk arrangements.

As we seek to increase the percentage of people with Medicare in accountable care arrangements, we are balancing incentives and participation options to serve a dual purpose of sustaining participation by existing ACOs and increasing program growth, recognizing that ACOs vary in their composition of providers/suppliers, the needs of the populations they serve, and have varying degrees of efficiency relative to their region and experience with accountable care initiatives. In this final rule, we are building on the existing Shared Savings Program benchmarking methodology by finalizing modifications to strengthen financial incentives for long- term participation by reducing the impact of ACOs’ performance on their benchmarks, to

address the impact of ACO market penetration on regional expenditures used to adjust and update benchmarks, and to support the business case for ACOs serving high-risk and high dually eligible populations to participate, which will help sustain participation and grow the program. Additionally, we are finalizing modifications to the benchmarking methodology to mitigate bias in regional expenditure calculations that benefit ACOs electing prospective assignment. The changes we are finalizing to the benchmarking methodology used in the Shared Savings Program align with our consideration of the more long-term benchmarking concepts that would move toward the use of administratively set benchmarks in order to grow and sustain long- term program participation as discussed in the related comment solicitation included in the CY 2023 PFS proposed rule. We are also finalizing policies to expand opportunities for certain low revenue ACOs participating in the BASIC track to share in savings even if they do not meet the minimum savings rate (MSR) to allow for investments in care redesign and quality improvement activities among less capitalized ACOs.

We are finalizing changes to the quality reporting and the quality performance requirements that are responsive to interested parties’ feedback, and designed to support transition of ACOs to all payer quality measure reporting. These provisions include reinstitution of a sliding scale reflecting an ACO’s quality performance for use in determining shared savings for ACOs, regardless of how they report quality data, and to revise the approach for determining shared losses for ENHANCED track ACOs. We are finalizing an extension of the incentive for reporting eCQMs/MIPS CQMs through performance year 2024 to align with the sunsetting of the CMS Web Interface reporting option. We are also finalizing a health equity adjustment to an ACO’s quality performance category score to recognize high quality performance by ACOs with high underserved populations. We are finalizing benchmarking policies to establish quality measure benchmarks and minimum attainment level for the CMS Web Interface measures for performance years 2022, 2023 and 2024 under the Shared Savings Program.

Many of these provisions are the result of our efforts to align policies under the Shared Savings Program and under the Center for Medicare and Medicaid Innovation’s (Innovation Center) ACO models. For example, the advance investment payments are derived from learnings from the ACO Investment Model (AIM), an Innovation Center model that tested the effects of making advanced payments of shared savings to certain ACOs participating in the Shared Savings Program.  Incorporation of advance investment payments into the Shared Savings Program payment methodology is an example of how our larger ACO strategy of having the Innovation Center test new payment and service delivery models on the Shared Savings Program “chassis” can better harmonize policies across Medicare ACO initiatives and enable us to scale any findings.

In this final rule, we also summarize comments received in response to the comment solicitation that sought to gather information on a potential alternative approach to calculating ACO historical benchmarks that would use administratively set benchmarks that are decoupled from ongoing observed FFS spending including the design of a potential approach. CMS has observed that the benchmarking methodology for the Shared Savings Program and Innovation Center models may include ratchet effects that reduce benchmarks for successful ACOs and jeopardizes their continued participation over multiple agreement periods, resulting in selective participation (including limited participation by inefficient ACOs).  

Finally, we are finalizing changes that we believe improve the operations of the Shared Savings Program by reducing administrative burden. While ACOs have to continue to comply with marketing material requirements, we are finalizing the elimination of the requirement for an ACO to submit marketing materials to CMS for review and approval prior to disseminating materials to beneficiaries and ACO participants, and modifications to streamline the SNF 3-day rule waiver application review process.  We are also finalizing modifications to the beneficiary notification requirements including to reduce the frequency with which beneficiary information notices are provided to beneficiaries from annually to a minimum of once per agreement period, with a follow-up beneficiary communication to promote beneficiary comprehension of the standardized written notice.  Further, we are finalizing updates to the data sharing regulations to allow ACOs acting as organized health care arrangements (OHCAs) to request certain aggregate reports and beneficiary-identifiable claims data from CMS.  ACOs that choose to structure themselves as OHCAs may reduce their administrative burden when collecting and reporting all-payer eCQMs/MIPS CQMs data to CMS.

This fact sheet summarizes the major changes to the Shared Savings Program that are included in the CY 2023 PFS final rule. Unless specified otherwise, CMS is finalizing its proposed changes to the Shared Savings Program, including changes to the program’s participation options, and quality reporting and performance requirements, and financial methodology, as well as changes to policies within other programmatic areas, including the program’s beneficiary assignment methodology, requirements related to marketing material review and beneficiary notifications, the SNF 3-day rule waiver application, and data sharing requirements. Based on commenters’ suggestions, these final policies include certain refinements to the original proposals, including to incorporate use of LIS enrollment, in addition to dually eligible beneficiary status and ADI score in the methodologies used to determine quarterly advance investment payments and the health equity adjustment for quality performance scores.

We are finalizing as proposed that the initial application cycle for ACOs to apply to enter an agreement period to participate under the modified participation options, including the opportunity to apply for advance investment payments, and the revised financial methodology including the revised benchmarking methodology, will occur during CY 2023 for a January 1, 2024 start date. More information on how to apply and the application cycle for a January 1, 2024 start date will be available through the Shared Savings Program’s website in the Spring 2023.

Increasing Participation in Accountable Care Models in Underserved Communities by Providing an Option for Advance Investment Payments to Certain ACOs

Advance Investment Payments

Given the positive results from the Innovation Center’s AIM, and based on our experience with this model, we have finalized, beginning January 1, 2024, a new option in the Shared Savings Program to make advance shared savings payments to certain ACOs. The expectation is that advance investment payments will provide an opportunity for many entities in rural and underserved areas to join together as ACOs, build the infrastructure needed to succeed in the program, and promote equity by holistically addressing beneficiary needs, including social needs. Under the final policy, an eligible ACO that is new to the Shared Savings Program (that is, not a renewing ACO or a re-entering ACO), and identified as being low revenue and inexperienced with performance-based risk Medicare ACO initiatives, may receive a one-time fixed payment of $250,000 and quarterly payments for the first two years of the 5-year agreement period. Quarterly payments will be based on a score set to 100 if the beneficiary is enrolled in  the LIS or is dually eligible for Medicare and Medicaid and otherwise set to the ADI national percentile rank (an integer between 1 and 100) of the census block group in which the beneficiary resides, with higher payment amounts for assigned beneficiaries with a higher risk factors-based score. ACOs will not receive a payment for beneficiaries with a risk factor-based score below 25. Payments will be capped at 10,000 assigned beneficiaries. The advance investment payments will be recouped once the ACO begins to achieve shared savings in their current agreement period and in their next agreement period, if a balance persists. If the ACO doesn’t achieve shared savings, we will not recoup the funding, except if the ACO terminates during the agreement period in which it received the advance investment payments. Under the final policy, an ACO must use an advance investment payment to improve the quality and efficiency of items and services furnished to beneficiaries by investing in increased staffing, health care infrastructure, and the provision of accountable care for underserved beneficiaries, which may include addressing social determinants of health.  ACOs will also publicly report on their website the amount of any advance investment payments and the actual amount spent in each of the spend plan categories.

Smoothing the Transition to Performance-Based Risk

For agreement periods beginning on January 1, 2024, and in subsequent years, we are finalizing our proposal to allow ACOs inexperienced with performance-based risk to participate in one 5-year agreement under a one-sided shared savings model only by entering the BASIC track’s glide path and remaining in Level A for all 5 years. These ACOs may be eligible for a second agreement period within the BASIC track’s glide path, with 2 additional years under a one-sided model for a total of 7 years before transitioning to two-sided risk. For performance years beginning January 1, 2023, and January 1, 2024, we are finalizing our proposal to allow ACOs currently participating in Level A or B the option to elect to continue in their current level of the BASIC track glide path for the remainder of their agreement.

For agreement periods beginning on January 1, 2024, and in subsequent years, we are finalizing our proposal to remove the limitation on the number of agreement periods an ACO can participate in Level E of the BASIC track; participation in the ENHANCED track will be optional.

These changes are responsive to interested parties’ concerns that  smaller health care providers in rural and underserved settings need additional time to transition to two-sided risk, and that quickly forcing ACOs to adopt two-sided risk models was a barrier to participation in the Shared Savings Program.

Strengthening Program Participation by Reducing the Effect of ACO Performance on Historical Benchmarks, Addressing Market Penetration, Strengthening Incentives for ACOs Serving Medically Complex and High Cost of Care Populations

The following provisions ensure rebased benchmarks remain accurate and serve as a reasonable baseline, when benchmark years correspond to performance years of the ACO’s preceding agreement period, requiring ACOs to continually beat their own performance; address a single ACO’s or multiple ACOs’ collective effects on their own regional expenditures, which are used to calculate the regional adjustment and the regional portion of the trend and update factors; and ensure the benchmarking methodology results in benchmarks of sufficient value to encourage program entry and continued participation by ACOs, ACO participants, and ACO providers/suppliers serving medically complex, high cost populations, and to address selective participation in the program  resulting from the program’s benchmarking methodology.

We are finalizing a combination of policies to ensure a robust benchmarking methodology that will reduce the effect of ACO performance on ACO historical benchmarks and increase options for ACOs caring for high-risk populations, specifically to: 1) modify the methodology for updating the historical benchmark to incorporate a prospective, external factor, 2) incorporate a prior savings adjustment in historical benchmarks for renewing and re-entering ACOs, and 3) reduce the impact of the negative regional adjustment. We believe these modifications could serve as “stepping stones” to a longer-term approach to the benchmarking methodology, and they are designed to be consistent with the potential approach for incorporating a methodology for administratively set benchmarks, which was described in the related comment solicitation.

We will monitor the collective impact of the Accountable Care Prospective Trend (ACPT) and other benchmark changes on new and renewing ACOs in order to assess impacts and implementation experience to inform any future refinements, which would be made through future rulemaking.

These changes, and the other changes we are finalizing to the Shared Savings Program’s benchmarking methodology within this final rule, will be applicable to establishing, updating, and adjusting the benchmark for agreement periods beginning on January 1, 2024, and in subsequent years.

Incorporating a Prospective, External Factor in Growth Rates Used to Update the Historical Benchmark 

We are finalizing our proposal to incorporate a prospectively projected administrative growth factor, a variant of the United States Per Capita Cost (USPCC) referred to in this final rule as the ACPT, into a three-way blend with national and regional growth rates to update an ACO’s historical benchmark for each performance year (PY) in the ACO’s agreement period. Incorporating this prospective trend in the update to the benchmark will insulate a portion of the annual update from any savings occurring as a result of the actions of ACOs participating in the Shared Savings Program and address the impact of increasing market penetration by ACOs in a regional service area on the existing blended national-regional growth factor.

A three-way blend will be calculated as the weighted average of the ACPT (one-third) and the national-regional blend (two-thirds) for use in updating an ACO’s historical benchmark between benchmark year (BY) 3 and the PY. The ACPT will be projected by the CMS Office of the Actuary (OACT) and will be a modification of the existing FFS USPCC growth trend projections used annually for establishing Medicare Advantage rates, excluding indirect medical education (IME), disproportionate share hospital (DSH) payments, and the  new supplemental payment for Indian Health Service (IHS)/Tribal Hospitals and hospitals located in Puerto Rico, and including payments associated with hospice claims to be consistent with Shared Savings Program’s expenditure calculations.

We are finalizing the proposal to set the ACPT growth factors for the ACO’s entire 5-year agreement period near the start of the agreement period. The ACPT factors will remain unchanged throughout the ACO’s agreement period, providing a degree of certainty to ACOs. We are also finalizing a “guardrail” to provide protection for ACOs from larger shared losses (or potentially from the negative implications of financial monitoring) based on an updated benchmark computed using the three-way blend than would have been experienced under the national-regional blend. This guardrail will not apply to the calculation of shared savings. CMS also retains flexibility to reduce the weight of the prospectively determined ACPT portion of the three-way blend if unforeseen circumstances occur during an ACO’s agreement period.

Adjusting ACO Benchmarks to Account for Prior Savings 

We are finalizing our proposal to incorporate an adjustment for prior savings that will apply in the establishment of benchmarks for renewing ACOs and re-entering ACOs, that were reconciled for one or more performance years in the three years preceding the start of their agreement period. Such an adjustment will help to mitigate the rebasing ratchet effect on an ACO’s benchmark by returning to an ACO’s benchmark an amount that reflects its success in lowering growth in expenditures. Furthermore, we believe that returning dollar value to benchmarks through a prior savings adjustment could help address an ACO’s effects on expenditures in its regional service area that result in reducing the regional adjustment added to the historical benchmark. Overall, this provision will help ensure that high performing ACOs have incentives to remain in the program for the long-term. CMS will adjust an ACO’s benchmark based on the higher of either the prior savings adjustment or the ACO’s positive regional adjustment. We will also use a prior savings adjustment to offset negative regional adjustments for ACOs that are higher spending compared to their regional service area.

Reducing the Impact of the Negative Regional Adjustment

We are finalizing two proposed policy changes designed to limit the impact of negative regional adjustments on ACO historical benchmarks and further incentivize program participation among ACOs serving high cost beneficiaries. The first change reduces the cap on negative regional adjustments from negative 5% of national per capita expenditures for Parts A and B services under the original Medicare FFS program in BY3 for assignable beneficiaries to negative 1.5%. The second change is that after the cap is applied to the regional adjustment, to gradually decrease the negative regional adjustment amount as an ACO’s proportion of dually eligible Medicare and Medicaid beneficiaries increases or its weighted-average prospective HCC risk score increases.

Calculating County FFS Expenditures to Reflect Differences in Prospective Assignment and Preliminary Prospective Assignment with Retrospective Reconciliation

To remove the favorable bias and bring greater precision to the calculation of factors based on regional FFS expenditures, we are finalizing our proposal to calculate risk-adjusted regional expenditures using county-level values computed using an assignment window that is consistent with an ACO’s assignment methodology selection for the applicable performance year. That is, for ACOs selecting prospective assignment, we will use an assignable population of beneficiaries that is identified based on the offset assignment window (for example, October through September preceding the calendar year) and for ACOs selecting preliminary prospective assignment with retrospective reconciliation, we will continue to use an assignable population of beneficiaries that is identified based on the calendar year assignment window.

Improving the Risk Adjustment Methodology to Better Account for Medically Complex, High Cost Beneficiaries and Guard Against Coding Initiatives

We are finalizing modifications to the risk adjustment methodology previously established for ACOs in agreement periods beginning on or after July 1, 2019, under which we use prospective HCC risk scores to adjust the ACO’s historical benchmark at the time of reconciliation for a performance year to account for changes in severity and case mix for the ACO’s assigned beneficiary population between BY3 and the performance year, subject to a cap of positive 3% for the agreement period (referred to herein as the “3% cap”). Under the current approach, the 3% cap is applied separately for the population of beneficiaries in each Medicare enrollment type (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries). That is, any positive adjustment between BY3 and any performance year in the agreement period cannot be larger than 3 percent for any Medicare enrollment type.

 We are finalizing our proposal to account for all changes in demographic risk scores for the ACO’s assigned beneficiary population between BY3 and the performance year prior to applying the 3 percent cap on positive adjustments resulting from changes in prospective HCC risk scores, and to apply the cap in aggregate across the four Medicare enrollment types (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual eligible Medicare and Medicaid beneficiaries). The revised risk adjustment methodology will be applicable to agreement periods beginning on or after January 1, 2024.

Increased Opportunities for Low Revenue ACOs to Share in Savings

We are finalizing our proposal to expand the eligibility criteria to qualify for shared savings for agreement periods beginning on January 1, 2024, and in subsequent years. This policy will enable certain low revenue ACOs participating in the BASIC track to share in savings even if the ACO does not meet the minimum savings rate (MSR) requirement. Eligible ACOs that meet the quality performance standard required to share in savings at the maximum sharing rate will receive half of the maximum sharing rate for their level of participation (20% instead of 40% under Levels A and B, and 25% instead of 50% under Levels C, D, and E). For eligible ACOs that do not meet the quality performance standard required to share in savings at the maximum sharing rate but meet the alternative quality performance standard being established with this final rule, the sharing rate will be further adjusted according to the finalized sliding scale approach for determining shared savings. We believe this approach will provide payments to ACOs with the greatest need for capital, in particular smaller, rural ACOs which tend to be less capitalized, allowing for investments in care redesign and quality improvement activities. This modification will also align with the other changes we are finalizing to encourage participation by new ACOs and ACOs that focus on underserved populations, such as to offer advance investment payments to new low revenue ACOs joining the BASIC track.

Ongoing Consideration of Concerns About the Impact of the Public Health Emergency (PHE) for COVID-19 on ACOs’ Expenditures

CMS’s analysis of current data indicates that ACOs exhibiting sharp declines in spending in 2020 tend to show rebounds in spending in 2021 such that historical benchmarks averaged across a base period including both 2020 and 2021 appear to represent a reasonable basis from which to update ACO spending targets going forward. We believe that use of a three-way blend of the ACPT / national-regional growth rates to update benchmarks, as finalized within this final rule for agreement periods beginning on January 1, 2024, and in subsequent years, will further mitigate any potential adverse effects of the PHE for COVID-19 on historical benchmarks while also protecting against unanticipated variation in performance year expenditures and utilization resulting from a future PHE. We will continue to monitor the impact of the PHE for COVID-19 to determine whether any further changes may be necessary to account for the effects of this PHE or future PHEs.

New Supplemental Payment for Indian Health Service and Tribal Hospitals and Hospitals Located in Puerto Rico  

As described in the Fiscal Year (FY) 2023 Medicare Hospital Inpatient Prospective Payment Systems (IPPS) / Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) final rule (87 FR 49047 through 49051), we established a new supplemental payment for IHS/Tribal hospitals and hospitals located in Puerto Rico, beginning in FY 2023. Consistent with our policy that excludes disproportionate share hospital and uncompensated care payments from ACO benchmark year expenditures and performance year expenditures, we are finalizing our proposal to exclude these new supplemental payments for IHS/Tribal hospitals and hospitals located in Puerto Rico from the determination of Medicare Parts A and B expenditures for purposes of calculations under the Shared Savings Program and to include the new supplemental payment to IHS/Tribal hospitals and hospitals located in Puerto Rico in Shared Savings Program calculations of ACO participant revenue. This policy is applicable for the performance year beginning January 1, 2023, and subsequent performance years.

Alternative Options for Addressing Concerns About the Effect of an ACO’s Assigned Beneficiaries on Regional FFS Expenditures in Establishing, Adjusting, Updating, and Resetting the ACO’s Historical Benchmark

Interested parties have suggested that including an ACO’s assigned beneficiaries in the determination of the ACO’s regional expenditures results in relatively lower benchmarks for ACOs, particularly ACOs with high market penetration. In the CY 2023 PFS proposed rule, we sought comment on alternative benchmarking policies – a) exclude the ACO’s own assigned beneficiaries from the assignable beneficiary population used in regional expenditure calculations; b) expand the definition of the ACO regional service area to use a larger geographic area to determine regional FFS expenditures; or c) both – in order to provide interested parties the opportunity to consider the merits of those alternatives relative to the package of policies we proposed.

We believe the changes to the benchmarking methodology we are finalizing in this final rule will adequately address concerns raised by interested parties about the ability of ACOs with high market penetration to generate shared savings.

We continue to be concerned that serious unintended consequences may arise from removing an ACO’s assigned beneficiaries from the assignable beneficiary population used in regional expenditure calculations. We believe such an approach would amplify the benefit to ACOs  of selecting lower cost patients and avoiding higher needs groups and drive market consolidation,  while still failing to mitigate the  problem in  cases where multiple ACOs work in combination to drive down regional spending. Furthermore, it would increase program spending to such a degree that compliance with the requirements of section 1899(i)(3) of the Act related to the use other payment models in the Shared Savings Program would be violated.

 However, we will continue to explore approaches for expanding the definition of the ACO’s regional service area to use a larger geographic area to determine regional FFS expenditures that could be incorporated into the regional component of the three-way blend we are finalizing with this final rule, and may revisit this topic in future rulemaking.

Transitioning ACOs to All Payer Quality Measure Reporting and Adjusting for Health Equity

Using a Sliding Scale Approach for Determining Shared Savings and Shared Losses Beginning in Performance Year 2023 and Extending the Incentive for Reporting eCQMs/MIPS CQMS for Performance Year 2024

Beginning on January 1, 2023, and subsequent years, we are finalizing to change the all-or-nothing approach to determining an ACO’s eligibility for shared savings based on quality performance to allow for scaling of shared savings rates for ACOs that fall below the 30th/40th percentile quality standard threshold required to share in savings at the maximum sharing rate, but who meet minimum quality reporting and performance requirements. Under the final rule, an ACO’s quality score for a performance year and the determination of whether the ACO met the Shared Savings Program quality performance standard will affect the determination of shared savings for that performance year and, for ACOs participating in the ENHANCED track, the amount of any shared losses owed. We are finalizing that, beginning with performance year 2023 and for subsequent performance years, if an ACO fails to meet the existing criteria under the quality performance standard to qualify for the maximum sharing rate but the ACO achieves a quality performance score equivalent to or higher than the 10th percentile of the performance benchmark on at least one of the four outcome measures in the APP measure set then the ACO will share in savings (if otherwise eligible) at a lower rate that reflects the ACO’s quality performance category score. The intent of this approach is to lead to more predictable savings, avoid a cliff whereby small differences in quality scores would lead to elimination of all shared savings, and to promote quality improvement to drive high-quality care for all people with Medicare that receive care at ACOs.

Additionally, we are finalizing to extend the incentive for reporting eCQMs/MIPS CQMs through performance year 2024 to align with the sunsetting of the CMS Web Interface reporting option and allow ACOs an additional year to gauge their performance on the eCQM/MIPS CQMs before full reporting of the measures are required beginning in performance year 2025.

Health Equity Adjustment

We are finalizing our proposal to implement a health equity adjustment of up to 10 bonus points to an ACO’s MIPS quality performance category score when reporting all-payer eCQMs/MIPS CQMs and based on (1) high quality measure performance and (2) providing care for a higher proportion of underserved or dually eligible beneficiaries. We will use the area deprivation index (ADI) score, enrollment in the LIS, and Medicare and Medicaid dual eligibility status to assess underserved populations which will allow capturing of broader neighborhood level and individual beneficiary characteristics. The policy will add bonus points to the ACO’s MIPS quality performance category score based on a combination of the ACO’s performance for each quality measure and the proportion of their assigned beneficiary population that is underserved. This policy will only positively impact ACOs and not penalize them.

This policy represents one of the first that will promote equity in a value-based care program, while simultaneously avoiding the pitfalls of other pay-for-equity type approaches. This health equity adjustment will not risk adjust away disparities (thereby masking them), and does not set lower quality standards for underserved populations— rather, this provision will reward those providers who provide excellent care for underserved populations. Because the upside-only reward will only go to those providers who serve a minimum percentage of underserved populations, this means that there will also be greater incentive to care for underserved populations. This provision will also address concerns raised by interested parties that in the switch to all-payer eCQMs/ MIPS CQMs that those providers who treat a higher proportion of underserved populations will receive lower quality scores and lower shared savings or higher shared losses as a result. This provision also operates synergistically with the provision to revise the all-or-nothing approach to one of a sliding scale, in that it will possibly lead to higher shared savings or reduced shared losses for a broader array of ACOs treating underserved populations.

Addressing MIPS Quality Performance Category Score Corrections in the Shared Savings Program’s Reopening Authority

In this final rule, we are also clarifying that the Shared Savings Program will reopen an ACO’s initial determination to correct errors in the MIPS quality performance category score identified through the MIPS targeted review process. In the event that we learn of errors in the calculation of MIPS quality performance category scores (from a MIPS targeted review or some other MIPS quality performance category score-related corrections) that change the percentile score an ACO must achieve in order to meet the quality performance standard, we would exercise our discretion to reopen the initial determination of an ACO’s financial performance for good cause to correct errors in the determination of whether an ACO is eligible for shared savings, the amount of shared savings due to the ACO, or the amount of shared losses owed by the ACO due to the miscalculation of MIPS quality performance category scores.

Clarifying the Use of Unweighted MIPS Quality Performance Category Scores for Quality Performance Standard Determinations under the Shared Savings Program

Historically, we have used the unweighted distribution of quality performance category scores submitted by ACOs, groups, and individuals to calculate benchmarks for quality measure performance under MIPS and the Shared Savings Program. We are clarifying that we use the submission level MIPS quality performance category scores (unweighted distribution of scores) to determine the 30^th percentile and 40^th percentile MIPS quality performance category scores for purposes of establishing the applicable quality performance standard under the Shared Savings Program. We are also clarifying that we use an ACO’s submission, which is considered the unweighted distribution of quality performance category scores, to calculate its MIPS quality performance category score for purposes of determining whether the ACO meets the quality performance standard under the Shared Savings Program in performance year 2021 and subsequent performance years, which is consistent with our original intended methodology of using the unweighted distribution based on submission data.

Benchmarking Policies for CMS Web Interface Measures for Performance Years 2022, 2023, and 2024

In the CY 2022 PFS final rule, we extended the CMS Web Interface as a collection type for performance years 2022, 2023 and 2024 for Shared Savings Program ACO’s reporting under the APP, however, the benchmarking policies under § 425.502(b) that were used to establish quality measure benchmarks in the Shared Savings Program prior to the development and implementation of the APP were sunset with the 2020 performance year. We are finalizing our proposal to amend the regulation at § 425.512, which governs the ACO quality performance standard for performance years beginning on or after January 1, 2021, to include a new paragraph (a)(6), which will provide that for performance years 2022, 2023, and 2024, CMS designates a performance benchmark and minimum attainment level for each CMS Web Interface measure and establishes a point scale for the measure as described in § 425.502(b). In addition, we are finalizing our proposal to use the approach to set flat percentage benchmarks for the Preventive Care and Screening: Screening for Depression and Follow-up Plan (Quality ID 134) measure and the Preventative Care and Screening: Tobacco Use: Screening and Cessation Intervention (Quality ID# 226) measure for performance year 2022.

Reducing Administrative Burden for ACOs

Marketing Materials

ACOs must continue to comply with marketing material requirements and CMS maintains its ability to review marketing materials upon request along with our requirements regarding the content of marketing materials and our ability to issue a compliance action if a marketing material is out of compliance in the future.  However, beginning January 1, 2023, ACOs will no longer be required to submit marketing materials for CMS review and approval prior to use.

Beneficiary Notifications

Beginning January 1, 2023, ACOs will be required to provide a beneficiary notice prior to or at the first primary care service visit of the agreement period, rather than annually, and a new follow-up communication that must take place within 180 days after the beneficiary information notice is provided. This follow-up beneficiary communication is designed to promote beneficiary comprehension of the standardized written notice and provide an opportunity for beneficiaries to ask any outstanding questions.  We also improved beneficiary notification materials, poster template, and Medicare & You handbook content to make it more beneficiary-friendly to improve comprehension.

We are also finalizing our provision to further clarify that all ACO participant practices and facilities must post signs notifying beneficiaries of their participation in an ACO, and their ability to decline claims data sharing and voluntary align to their primary clinicians. CMS retains the requirement for ACO participants providing primary care services to make the standardized written notice available upon request.

SNF 3-day Rule Waiver Application

Beginning January 1, 2023, ACOs applying for the SNF 3-day rule waiver will no longer be required to provide narratives describing their communication plan, care management plan, and beneficiary evaluation and admission plan. ACOs will be required to submit attestations that they have established the relevant narratives and care plans and that they are available for review upon CMS request.

Data Sharing

Beginning January 1, 2023, updated data sharing regulations will allow ACOs acting as organized health care arrangements (OHCAs) to request certain aggregate reports and beneficiary-identifiable claims data from CMS. This policy change may reduce administrative burden for ACOs that organize as OHCAs and will allow for the timely exchange of patient information across an ACO’s continuum of care.

Updates to ACO Beneficiary Assignment Methodology

We are finalizing revisions to the definition of primary care services that are used for purposes of beneficiary assignment, including to incorporate new prolonged services codes and new chronic pain management codes to ensure that the Shared Savings Program assignment methodology remains consistent with billing and coding guidelines. These changes are applicable for the performance year starting on January 1, 2023, and subsequent performance years.

We are also finalizing modifications to our approach for identifying facilities, such as Federally Qualified Health Centers, Rural Health Clinics, Electing Teaching Amendment hospitals, and Method II Critical Access Hospitals, identified by CMS Certification Numbers (CCNs) used to assign beneficiaries, to account for changes in CCN enrollment during the performance year. These updates are applicable for the performance year starting on January 1, 2023, and subsequent performance years.

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Today, the U.S. Department of Health and Human Services (HHS), through its Centers for Medicare & Medicaid Services (CMS), is expanding access to behavioral health care, cancer screening coverage, and dental care. The Calendar Year 2023 Physician Fee Schedule (PFS) final rule announced today also promotes innovation and coordinated care in the Medicare program through Accountable Care Organizations (ACOs). This rule directly supports President Biden’s Cancer Moonshot Goal to cut the death rate from cancer by at least 50% and also supports the Administration’s commitment of strengthening behavioral health, which the President outlined in his first State of the Union Address and the comprehensive strategy to tackle the nation’s mental health crisis, which HHS leaders have furthered through the National Tour to Strengthen Mental Health.

“The Biden-Harris Administration is committed to expanding access to vital prevention and treatment services,” said HHS Secretary Xavier Becerra.  “Providing whole person support and services through Medicare will improve health and wellbeing for millions of Americans and even save lives.” 

“Access to services promoting behavioral health, wellness, and whole-person care is key to helping people achieve the best health possible,” said CMS Administrator Chiquita Brooks-LaSure. “The Physician Fee Schedule final rule ensures that the people we serve will experience coordinated care and that they have access to prevention and treatment services for substance use, mental health services, crisis intervention, and pain care.”

“Together, we are building a stronger Medicare program,” said Deputy Administrator and Director for the Center for Medicare, Dr. Meena Seshamani. “No matter who you are, or what diagnoses you have, these changes will help ensure that Medicare treats the whole person— caring for physical health, behavioral health, and social needs that are integral to health— and ensuring access to the high-quality care all people deserve.”

Coverage for Behavioral Health Services and Opioid Use Disorder Treatment

In line with the 2022 CMS Behavioral Health Strategy, CMS is strengthening access to vital behavioral health services. CMS is making it easier for Medicare beneficiaries to get behavioral health services, by allowing behavioral health clinicians like licensed professional counselors and marriage and family therapists to offer services under general (rather than direct) supervision of the Medicare practitioner. Medicare will pay Opioid Treatment Programs that use telecommunications with patients to initiate treatment with buprenorphine. CMS is also clarifying that Opioid Treatment Programs can bill for opioid use disorder treatment services provided through mobile units, such as vans, in accordance with Substance Abuse and Mental Health Services Administration (SAMHSA) and Drug Enforcement Administration (DEA) guidance.  These policies may increase access in rural and other underserved areas.

CMS is also finalizing policies to pay for clinical psychologists and licensed clinical social workers to furnish integrated behavioral health care as part of a primary care team. Finally, Medicare will provide a new monthly payment for comprehensive treatment and management services for patients with chronic pain. These new services offer a whole-person approach to care.

Expanding and Enhancing Accountable Care
CMS is finalizing changes to the Medicare Shared Savings Program, the nation’s largest Accountable Care Organization program, covering more than 11 million people with Medicare and including more than 500,000 health care providers. These policies represent some of the most significant reforms since the program was established in 2011, and the first Accountable Care Organizations (ACOs), which are groups of health care providers who come together to give coordinated, high-quality care to people with Medicare, began participating in 2012. Through these policies, which are central to the Medicare Value-Based Care Strategy, CMS will take important steps toward our 2030 goal of having 100% of Traditional Medicare beneficiaries in an accountable care relationship with their healthcare provider by 2030. CMS is finalizing proposals to incorporate advance shared savings payments to certain new ACOs that can be used to support their participation in the Shared Savings Program, including hiring additional staff or addressing social needs of people with Medicare. CMS is also finalizing a health equity adjustment to an ACO’s quality score, revising the benchmarking methodology, and allowing longer periods of time for ACOs to become accustomed to accountable care before being liable for downside risk, all of which are expected to increase participation in rural and underserved areas.

Reducing Barriers and Expanding Coverage for Colon Cancer Screening

Colon and rectal cancers continue to be a leading cause of death in the United States with even higher new cases and death rates for Black Americans, American Indians, and Alaska Natives. Medicare will now reduce the minimum age for colorectal cancer screening from 50 to 45 years, in alignment with recently revised policy recommendations by the U.S. Preventive Services Task Force. Additionally, Medicare will now cover as a preventive service a follow-on screening colonoscopy after a non-invasive stool-based test returns a positive result, which means that beneficiaries will not have out-of-pocket costs for both tests.

Finalizing Payment for Dental Services that are Integral to Covered Medical Services

CMS is codifying current policies in which Medicare Parts A and B pay for dental services when that service is integral to treating a beneficiary’s medical condition. Medicare will also pay for dental examinations and treatments in more circumstances, such as to eliminate infection preceding an organ transplant and certain cardiac procedures beginning in CY 2023 and prior to treatment for head and neck cancers beginning in CY 2024. Finally, CMS is establishing an annual process to review public input on other circumstances when payment for dental services may be allowed.

Payment Rates for CY 2023

The CY 2023 PFS conversion factor is $33.06, a decrease of $1.55 to the CY 2022 PFS conversion factor of $34.61. This conversion factor reflects the statutorily required update of 0% for CY 2023, expiration of the temporary 3% supplemental increase in PFS payments for CY 2022 provided by the Protecting Medicare and American Farmers From Sequester Cuts Act, and the statutorily required budget neutrality adjustment to account for changes in payment rates.

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The Centers for Medicare & Medicaid Services (CMS) has finalized changes in CMS’s annual Physician Fee Schedule (PFS) proposed rule to significantly expand access to behavioral health services and moves the health system closer to achieving equitable outcomes through high quality, affordable, person-centered care. These changes will ensure CMS continues to deliver on our goals of advancing health equity, driving accountable care, and protecting the sustainability of the Medicare program.

Building on the CMS Innovation Center’s successful ACO Investment Model (AIM), CMS is changing the Medicare Shared Savings Program to make more Accountable Care Organizations (ACOs) available in rural and underserved areas, which builds upon our continuing efforts to advance health equity. We are launching a payment adjustment for ACOs that reward them when they provide excellent care to underserved populations.

The Innovation Center also sought comment on an alternative approach to calculating ACO historical benchmarks that would use administratively set benchmarks that are decoupled from ongoing observed FFS spending including the design of the approach, as described in the Request for Information (RFI). CMS has observed that the benchmarking methodology for the Shared Savings Program and Innovation Center models may include ratchet effects that reduce benchmarks for successful ACOs and jeopardize their continued participation over multiple agreement periods, resulting in selective participation (including limited participation by inefficient ACOs). The RFI gathered information regarding the future use of administrative benchmarking, and comments will be considered for future rulemaking.

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Despite bad news on the fee cut, some provisions on ACOs have doctors cheering

by Joyce Frieden, Washington Editor, MedPage  July 15, 2022

WASHINGTON — Physician group responses to the proposed 2023 Medicare Physician Fee Schedule ranged from disappointment over the proposed 4.4% overall payment cut to praise for many of the provisions related to accountable care organizations (ACOs).

“The scary part for most of us is we’re getting these reductions despite the fact that we’re still fighting the pandemic and despite the fact we have a relatively large inflation rate,” Sterling Ransone Jr., MD, president of the American Academy of Family Physicians, said in a phone interview. “Seeing 9% inflation for the goods and services we have to pay for, while [also having] a 4.4% reduction in what we’re being paid, is scary.”

The 4.4% decrease CMS proposed includes a decrease in the conversion factor, a multiplier used to calculate physician reimbursement for fee-for-service payments under Medicare. The proposed conversion factor for the 2023 Physician Fee Schedule rule is $33.08, a decrease of $1.53 from last year, according to a CMS fact sheet. The proposed conversion factor accounts for the statutorily required update of 0%, the expiration of a 3% increase in physician payments required by Congress, and the required budget neutrality adjustment to account for changes in relative value units, CMS said.

The total Physician Fee Schedule cut would be on top of a 4% Medicare “pay-as-you-go,” or PAYGO cut — delayed from last year — that is scheduled to take effect in January 2023.

Hoping for Help From Congress

Brian Outland, director of regulatory affairs at the American College of Physicians, noted that Congress had previously passed a 3% increase in the conversion factor “but that 3% did not transpire over to Medicare as of yet. We’re hoping Congress will act before January 1 to add that money back into the fee schedule.”

Telehealth was another area of concern for Outland. Although CMS has a waiver to continue its current payment schedule for telehealth visits for 150 days after the COVID-19 public health emergency ends, the waiver doesn’t apply to audio-only visits. which are the only type of telehealth used by some seniors who are not tech-savvy. The proposed fee schedule didn’t indicate any action would be taken on that issue, he said.

Another concern about the fee schedule, particularly for the surgery community, is that CMS is not properly valuing the evaluation and management visits that surgeons provide for their surgical patients during the “global” reimbursement period for surgery, John Ratliff, MD, chair of the Washington committee of the American Association of Neurological Surgeon/Congress of Neurological Surgeons, said in a phone interview. “The non-surgeon is getting more reimbursement for the follow-up visit than a proceduralist would for the same work being done during the global period” in which a surgeon gets a single flat fee no matter what services are provided.

“This is setting up a two-tiered system of physician reimbursement, meaning I see a patient in the outpatient clinic for, say, a Level 3 follow-up visit and they haven’t had surgery, then I get paid one value. But if I’m doing a comparable amount of work and spending a comparable amount of time on a patient I’ve recently done surgery on, the evaluation of those services are different, because one is in the global period and one isn’t,” Ratliff said. The American College of Surgeons and other surgery organizations, he said, “asked CMS to consider correcting this imbalance within the fee schedule, but CMS has consistently refused that, and it’s another challenge America’s practicing physicians face in trying to achieve appropriate reimbursement for the work we’re doing.”

Good News for Would-Be ACOs

On the other hand, the proposed fee schedule also contains several provisions aimed at encouraging more physicians to form ACOs.

For instance, in the Medicare Shared Savings program, the fee schedule would “allow eligible ACOs to receive a one-time fixed payment of $250,000 and quarterly payments for the first 2 years of their 5-year agreement period,” healthcare attorneys with the law firm Morgan Lewis said in a blog post. “Quarterly payments would be determined using a 100-point scoring methodology, which would pay greater amounts to ACOs serving high numbers of dual eligible beneficiaries or those living in areas of high deprivation … with the goal that such increased funding would be used to address the beneficiaries’ social and other health needs.”

The agency would recoup these advanced payments once the ACO begins to show shared savings, but if it doesn’t accrue savings, CMS wouldn’t recoup any funds unless the ACO gets out of the program during the agreement period, according to the blog post. ACOs could start applying for the advance funding next year, with a target start date of Jan. 1, 2024.

Such provisions are very welcome, Susan Dentzer, president and CEO of America’s Physician Groups, an organization for physician-led ACOs, said in a phone interview. “Having the advanced incentive payments up-front going to be extremely helpful in getting lot of smaller practices into the program soon,” she said.

CMS also proposes to give ACOs more time in programs that are only “upside risk” — they receive money back if they show savings compared with traditional Medicare, but they don’t have to pay any money if they don’t produce savings — before they are required to accept downside risk as well, Dentzer added. “It’s basically major encouragement for smaller practices to get into [these arrangements], and that will clearly lead to formation of ACOs in parts of country where they haven’t had much of a role.”

“Given the goals of getting everybody [now] in traditional Medicare into an ACO by 2030, they have to push on a whole bunch of levers in value-based care. So the whole new approach they borrowed from other experiments in the past” is very positive, Dentzer said.

Updating Pricing Data

America’s Physician Groups also was pleased with changes CMS is proposing to ACO performance benchmarks, Garrett Eberhardt, the organization’s director of federal affairs, said on the same phone call. “We’re very pleased they’re trying to make some accounting for fact that ACOs often have their benchmark [negatively] affected by some of the prior savings they accrued,” he said.

The American Academy of Family Physicians’ Ransone also lauded CMS’s proposal to update the data used in its clinical labor pricing, which is part of its calculation of Medicare payment rates. “Last year we found out that [their data] from the Bureau of Labor Statistics was from 2002, so it was 20 years old,” Ransone said. In his own practice, “we pay our RNs about 60% more than in 2002, and our medical assistants 40% more,” he said. “We’re happy they’re going to update [those data] so we can continue to pay our staff what they deserve,” particularly at a time when many providers have seen staff members leave for other jobs, such as travel nursing, that pay much higher rates.

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The CY 2023 Medicare Physician Fee Schedule proposed rule would follow through on several cuts to physician reimbursement while aiming to bolster behavioral and ACO care.

By Jacqueline LaPointe

July 11, 2022 – CMS has proposed a decrease to the Medicare Physician Fee Schedule conversion factor, which would lead to significant cuts to physician reimbursement next year.

The federal agency released the Medicare Physician Fee Schedule for calendar year (CY) 2023 earlier today. The proposed rule includes a $1.53 decrease in the conversion factor, resulting in a CY 2023 conversion factor of $33.08.

CMS explained in the proposed rule that the conversion factor is slated to be lower next year due to the expiration of the 3 percent increase in Physician Fee Schedule reimbursements in CY 2022 as required by the Protecting Medicare and American Farmers From Sequester Cuts Act. Congress temporarily boosted physician reimbursement to mitigate the impact of pandemic-related expenses.

CMS is also obligated by federal statute to implement a 0 percent conversion factor in FY 2023 and ensure payment rates for individual services do not significantly impact estimated Medicare spending.

Physician advocacy organizations have been calling on CMS and Congress to expand specific pandemic-era relief measures, such as the boost in physician reimbursement, to provide continued support to struggling providers. Physicians dodged a nearly 10 percent cut to their reimbursement this year when Congress prevented statutory reductions in Medicare payments in December 2021.

Physicians may be facing more payment cuts in the coming year. However, CMS has also proposed other payment policies to increase access to care, including behavioral healthcare and access to accountable care organizations (ACOs).

In the proposed rule, CMS put forth a policy to allow licensed professional counselors, marriage and family therapists (LMFTs), and other behavioral health practitioners to provide behavioral health services under general (rather than direct) supervision. Medicare would also pay for clinical psychologists and licensed clinical social workers to provide integrated behavioral health services as part of a patient’s primary care team.

Additionally, the proposed rule would bundle certain chronic pain management and treatment services into monthly payments to increase team-based care access. Medicare would also cover opioid treatment and recovery services furnished in mobile units to boost access for homeless and rural populations.

The proposed rule also contains changes to Medicare’s flagship ACO program, the Medicare Shared Savings Program. CMS is floating a policy to include advance shared savings payments to certain new Shared Savings Program ACOs. The agency intends for the upfront payments to support activities that address patient social needs and encourage providers in rural and underserved areas to join an ACO.

CMS also proposed to give smaller ACOs more time to transition to downside financial risk.

Under the previous administration, CMS revamped the Shared Savings Program to transition ACOs to downside financial risk faster. The administration believed downside financial risk was key to advancing value-based care while bringing down healthcare costs. However, many ACOs criticized the move for pushing providers too aggressively. Participation in the Shared Savings Program has decreased since the revamp.

The CY 2023 Medicare Physician Fee Schedule proposed rule would also add a health equity adjustment to an ACO’s quality performance score to reward providers for delivering quality care to underserved populations. This policy, in addition to other benchmark adjustments proposed in the rule, aims to advance health equity and help CMS meet its goal of having all Traditional Medicare beneficiaries cared for by providers in accountable care models by 2030.

“At CMS, we are constantly striving to expand access to high quality, comprehensive health care for people served by the Medicare program,” CMS Administrator Chiquita Brooks-LaSure said in an announcement earlier today. “Today’s proposals expand access to vital medical services like behavioral health care, dental care, and cancer treatment options, all while promoting access, innovation, and cost savings in the Medicare program.” 

To view the complete proposed rule, click here—more coverage of the proposed rule to follow.

PHYSICIAN GROUPS CALL CUTS A THREAT TO PATIENT ACCESS

The physician community is not pleased with the CY 2023 Medicare Physician Fee Schedule proposed rule based on immediate reactions from physician advocacy groups. Many groups have suggested that the proposed cuts to physician reimbursement actually threaten patient access to care.

“It is immediately apparent that the rule not only fails to account for inflation in practice costs and COVID-related challenges to practice sustainability, but also includes a significant and damaging across-the-board reduction in payment rates,” Jack Resneck Jr., MD, president of the American Medical Association (AMA), said in a statement last night.

“Such a move would create long-term financial instability in the Medicare physician payment system and threaten patient access to Medicare-participating physicians. We will be working with Congress to prevent this harmful outcome,” Resneck added, pointing to an AMA statement from June emphasizing the unsustainable nature of the current Medicare physician payment system.

The Surgical Care Coalition, a group of 14 surgical professional associations representing nearly 150,000 surgeons in the US, shared similar thoughts on the proposed rule. The Coalition had previously launched a campaign to stop reductions in Medicare physician payment.

“The current Medicare Physician Fee Schedule is broken. It fails to incentivize collaboration and pits doctor against doctor every year,” stated Joseph C. Cleveland Jr., MD, chair of The Society of Thoracic Surgeons Council on Health Policy and Relationships. “It’s crucial that Congress work to address these cuts and create a more sustainable payment system. Failure to do so presents a serious risk to patients during a time of declining access to surgical care and rising prices for services and treatments.”

Given the financial impact of the COVID-19 pandemic over the past two years, groups like the Medical Group Management Association (MGMA) are also calling for changes to Medicare physician payment policies.

“These proposed cuts, coupled with the 4% PAYGO sequestration scheduled to take effect on Jan. 1, 2023, will have a detrimental impact on group practices, with 58% of recently surveyed groups indicating they are considering limiting the number of new Medicare beneficiaries served,” Anders Gilberg, senior vice president of government affairs at MGMA, said in an email to RevCycleIntelligence.

“The extension of regulatory Medicare telehealth flexibilities to align with the 151 days of congressionally extended telehealth policies will ensure practices have the ability to continue furnishing the highest quality care to patients,” Gilberg added.

ACOS APPLAUD SHARED SAVINGS PROGRAM CHANGES

Despite widespread dismay regarding Medicare physician payment policies in the proposed rule, ACOs are happy with potential changes to the Shared Savings Program. Specifically, ACOs are applauding CMS for proposing to give ACOs more time before taking on higher downside financial risk, altering financial benchmarking to account for projected administrative growth, and adding a health equity adjustment for high-performing ACOs that treat a higher proportion of underserved populations.

The National Association of ACOs also said proposals to provide advanced shared savings payments to smaller ACOs, accounting for an ACO’s prior savings in rebased benchmarks, and changing quality scoring were also positive steps.

“NAACOS sends a big bravo to the Centers for Medicare and Medicaid Services (CMS) for taking steps to reach its goal of creating a stronger Medicare by strengthening accountable care models and speed the movement toward value for all patients,” Clif Gaus, ScD, CEO of the organization said in a statement last week.

“While we are still studying the major changes, policies in today’s proposed Physician Fee Schedule will help grow participation in accountable care organizations (ACOs), helping realize the CMS Innovation Center’s recent Strategy Refresh to have every Medicare beneficiary in a relationship with a provider accountable for his or her quality and total cost of care by 2030. “

NAACOS estimates that the proposals would save Medicare over $15 billion and produce $650 million in higher shared savings payments to ACOs.

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