(Alexandria, VA) Congress has released the text of the Consolidated Appropriations Act, 2023, an omnibus funding package that will fund the government through Fiscal Year 2023. As NHPCO advised its members in a Member Alert this morning, the legislation contains measures that will affect hospices positively and negatively. We expect the legislation to pass and be signed into law later this week.  

Key developments in this legislation include the following.  

• • Telehealth extension: The legislation extends hospice telehealth flexibilities through the end of 2024, which were initially enacted as part of the CARES Act in 2020. This allows hospice patients and providers to continue to use telehealth for low touch, face-to-face visits prior to recertification for the hospice benefit. Patients will also be able to continue to participate in telehealth visits from home. 
  • Continued slowdown of hospice caps: The legislation extends the cap calculation methodology implemented by the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014. For years that measure has slowed the growth of the hospice aggregate cap, reducing the total amount a hospice can be reimbursed for care provided to patients, as compared to the rates set prior to the IMPACT Act. The FY23 omnibus extends that IMPACT Act aggregate cap methodology by another year to 2032, meaning that for the next decade many hospices will have to do more with less to continue providing patient care. 
  • Cap cut avoided: Beyond extension of the IMPACT Act methodology, there was some consideration to MedPAC’s recommendation to outright decrease the hospice aggregate cap by 20 percent. That cut was averted, protecting hospice patients and providers.
  • Expanded definition of the IDT: The legislation will allow hospices, starting in 2024, to use marriage and family therapists (MFTs) and mental health counselors (MHCs) as part of the hospice interdisciplinary team. There is no requirement for hospices to use MFTs or MHCs and a social worker is still required if needed under a patient’s plan of care.
  • Focus on Grief and Bereavement: Noting that more Americans are experiencing grief due to COVID-19 losses, the bill designates $1,000,000 for assessing the feasibility of developing consensus-based quality standards for high-quality bereavement and grief care. It also directs the U.S. Department of Health and Human Services (HHS) Office of the Assistant Secretary for Planning and Evaluation (ASPE) to collaborate with other health officials to evaluate and report on the scope of need for high-quality bereavement and grief services, including a focus on the role of hospices in community services. 

“This package is a mixed bag for hospices. On the one hand, NHPCO members have been actively advocating for telehealth extension, against a 20 percent cap cut, and for national approaches to supporting grief and bereavement services. Those provisions are wins for patients, families, and communities across the country, as is the inclusion of marriage and family therapists and mental health counselors as part of the hospice interdisciplinary team,” said NHPCO COO and interim CEO, Ben Marcantonio “Thank you to everyone who has reached out to their elected officials on these issues. On the other hand, Congress has extended the slowdown of the growth of the hospice aggregate cap, even though the evidence shows that the seven percent reductions already implemented through the IMPACT Act have limited access to hospice care among patients with Alzheimer disease and other dementias.” 

Marcantonio continued, “Avoiding an across-the-board cap cut, while facing continued slowdown of cap growth is like two steps forward, one step back. Forty years after the creation of the Medicare Hospice Benefit, in bleak economic times, Congress has decided to put to the next ten years of hospice care at risk by continuing to recklessly use hospice as an ATM.” 

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A fourth year into the pandemic, its effects have hospices continuing to combat against financial and operational headwinds, as well as uncertainty about the future of telehealth rules.

The COVID-19 public health emergency (PHE) is likely to endure past another extension. Currently set to expire Jan. 11, 2023, the U.S. Department of Health & Human Services (HHS) has not issued a 60-day notice that the agency indicated it would prior to the PHE’s end. This means the PHE will presumably remain in place an additional 90 days, or until April.

If next year brings a halt to the PHE, this could also mean an end to some of the telehealth flexibilities it brought, spelling operational and patient delivery issues for hospices during times of short staffing.

Telehealth impacts for hospice

The pandemic has helped illuminate areas of fragility across the nation’s health care delivery system, as well as ways that virtual care could help fill gaps, according to U.S. Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure. The agency is giving careful consideration to the future of telehealth and its long-term impacts on health care, she said.

“We’re very focused on lessons learned. Some of the big ones are virtual care, which has been a lifeline for so many people across the country,” Brooks-LaSure said at the HLTH conference in Las Vegas. “CMS has extended virtual care in Medicare in mental health to the extent of our authority, and Congress has extended a lot of the telehealth flexibilities beyond the public health emergency. One of the biggest pieces is just how much we have to engage people. It’s critical as we think about how to eventually move to the other end of the public health emergency of really making sure that we build back our health system in a much stronger way.”

The Consolidated Appropriations Act of 2022 ensured that CMS would extend telehealth waivers set in place during the PHE for an additional 151 days (or roughly five months) after it expires to allow for a transitional adjustment period.

Some of these waivers will remain permanent, such as the ability for Medicare patients to receive mental or behavioral telehealth services if they meet certain criteria.

Other flexibilities will be phased out, such as those that permitted the use of telehealth to fulfill requirements typically done in person, according to a recent CMS report. This includes recertifications by physicians, which will again require in-person visitation following the PHE’s expiration.

Doing away with some of the telehealth flexibilities will add strain to the hospice clinical workforce, creating dangerous headwinds that will be difficult for many providers to manage and weather through in the post-pandemic era, according to Kathleen Benton, president and CEO of Georgia-based Hospice Savannah.

“The health care world has been turned upside down in a new wave of people who are more acutely ill. We were already preparing for a large baby boomer aging population to rear its head, but that happening simultaneously to COVID just formed a perfect storm,” Benton told Hospice News. “For any of us to survive financially and be able to continue to care for people, it’s going to take innovative health care and technology to help make us more efficient in care delivery. We should feel compelled and called to make telehealth part of our expectations, because health care can’t look the same as it did prior to COVID.”

Telehealth has played a vital role in hospices’ ability to sustain care delivery while also easing some of their staffing strains. Hospices have been able to do more with less clinical staffing resources as demand rose in part due to expanded virtual care, Benton said.

Hospices have seen rising turnover in recent years, with clinicians leaving the industry in higher volumes during the pandemic. Hospice and home health providers saw clinical turnover rise by 16% to 20% in 2020 compared to previous years, according to a study from BerryDunn.

Other disciplines have also seen high rates of loss. Case in point, social workers left the health care field at record-high rates that exceeded pre-pandemic levels by 35%, data from the Peterson-Kaiser Family Foundation Health System Tracker reflected.

Other PHE issues eating away at hospice sustainability in year four

The labor issues have had a significant adverse impact on hospices’ finances and operations. Rising expenses are a major concern, such as rising wages, costs for personal protective equipment and supplies, gas prices, as well as slimming census volumes caused by diminished capacity. Hospices have seen disruptions to their referral mixes, and reductions in referrals from hospitals and other facility-based settings during the outbreak.

While some of these COVID disruptions have eased, the trickle down effects could continue well past the pandemic, according to Benton.

Additionally, some of the pandemic’s long-term impacts may be less visible and more pressing on hospices when the public health emergency eventually ceases – particularly when it comes to staff retention, Benton added.

“The biggest constraints are the intangibles that represent a true problem. The pandemic has put this mentality shift upon us that is rampant among health care workers right now and hasn’t gone away,” Benton told Hospice News. “We are investing tons of dollars and efforts into boosting that morale and shaping our culture. It may sound more philosophical, but retention is the toughest thing to work on a daily basis and will be for years to come after the pandemic.”

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On November 2, 2022, the Centers for Medicare & Medicaid Services (CMS) issued the CY 2023 Medicare Physician Fee Schedule Final Rule (Final Rule), which will take effect January 1, 2023. The Final Rule includes noteworthy updates regarding billing and reimbursement for services provided via telehealth, providing practitioners with some guidance on navigating the transition away from the flexibilities afforded during the COVID-19 Public Health Emergency (PHE).

CMS will implement, through program instruction or other guidance, the Consolidated Appropriations Act, 2022 (CAA) provisions that extended reimbursement for certain telehealth services for 151 days following the end of the PHE. These updates are described in more detail below.

Evaluation of Services to Be Added to the Medicare Telehealth Services List

In evaluating new telehealth services for inclusion on the list of Medicare-covered codes, CMS assigns each requested addition to one of three defined categories.

Category 1 services are those similar to professional consultations, office visits and office psychiatry services already on the approved telehealth list. Category 2 services, which are not similar to services already on the approved telehealth list, are assessed by CMS to determine whether there is evidence of clinical benefit to patients when the service is provided via telehealth.

During the PHE, CMS created Category 3 to evaluate codes added on a temporary basis that would facilitate continued access to medically necessary services during the pandemic, but for which there is not yet sufficient evidence to evaluate the services for permanent addition under Category 1 or Category 2 criteria.

In the Final Rule, CMS makes the following changes with respect to the approved Medicare Telehealth Services List:

• Adds, on a Category 1 basis, certain prolonged observation codes (HCPCS codes G0316-G0318), determined to be sufficiently similar to already-approved prolonged service codes and to certain psychiatric diagnosis codes.
• Adds new chronic pain management (CPM) services (HCPCS codes G3002 and G3003) to the list, also on a Category 1 basis, with the condition that an in-person visit of at least 30 minutes is furnished the first time HCPCS code G3002 is billed.
• Approves, on a Category 3 basis, a number of services including certain therapy, neurotransmitter pulse generator, emotional/behavior assessment and psychological or neuropsychological testing and evaluation codes. CMS explains it has not received sufficient evidence to support the Category 2 addition of specific therapy codes (CPT codes 97537, 97763, 90901 and 98960-98962) because they involve direct observation of and/or physical contact with beneficiaries but believes that approving these codes on a Category 3 basis through the end of CY 2023 will allow time to gather additional information to potentially support their permanent addition.
• Declines to add GI tract imaging, continuous glucose monitoring and certain neurotransmitter pulse generator/transmitter services to the Medicare Telehealth Services List on a Category 3 basis.
• Declines to add telephone E/M visit codes to the Medicare Telehealth Services List on a Category 3 basis. As a general rule, CMS interprets the special payment rules for telehealth under the Social Security Act to require that, for a service to be reimbursable under the Medicare Physician Fee Schedule when rendered remotely, it must be “analogous” to and “essentially a substitute for” in-person services. Although telephone E/M services were approved for payment during the PHE on a temporary basis, CMS reiterates in the Final Rule that audio-only services are generally not analogous to in-person services and therefore will not be separately covered on the Medicare Telehealth Services List after the 151-day extension period following the PHE (and will revert to “bundled” status). CMS will continue to cover audio-only communications for mental health services under certain circumstances, as discussed more fully below.
• Clarifies that in the event the 151-day period after the PHE ends on a date that is later than December 31, 2023, services added on a Category 3 basis would remain on the Medicare Telehealth Services List until the end of such 151-day period, even if later than December 31, 2023.

See the chart on CMS’s website for a complete list of approved telehealth codes and their duration.

Aligning Reimbursement with Federal Budget Legislation

The CAA codified the extension, for 151 days following the end of the PHE, of certain flexibilities applied to telehealth reimbursement during the PHE. To align with the CAA, in the Final Rule, CMS confirms its intention to implement these changes until 152 days following the end of the PHE, which include the following:

• Allowing telehealth to be furnished in any geographic area and from any originating site in the U.S. where the beneficiary is located at the time of the telehealth service, including the individual’s home.
• Providing that no payment of an originating site facility fee may be made to any “new” approved originating sites during the PHE.
• Delaying the requirement for an in-person visit with a physician or other qualified practitioner within six months prior to mental health services furnished by telehealth. In response to commenters’ concerns about the administrative burdens of adjusting to meet the in-person visit requirement amidst the uncertainty of the end date of the PHE, as well as the potential impact on patients with complex mental health conditions, CMS stated that it does not interpret the statute as applying this in-person visit requirement for beneficiaries who began receiving mental health services via telehealth during the PHE or in the 151 days following the end of the PHE. Instead, the requirement for an in-person visit within six months prior to the initiation of mental health services via telehealth will apply to beneficiaries who begin receiving services after the 151-day period ends.
• Expanding the definition of eligible telehealth practitioners to include qualified occupational therapists, physical therapists, speech-language pathologists and audiologists.
• Continuing payment for Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) providing telehealth services and delaying the in-person visit requirements for mental health visits furnished by RHCs and FQHCs until 152 days after the end of the PHE.

In the Final Rule, CMS reminds stakeholders that on the 152nd day following the end of the PHE, Medicare telehealth services will again be subject to the restrictions set forth in the Social Security Act, including the geographic and originating site limitations placed on telehealth reimbursement. Although several legislative attempts have been made since the onset of the PHE to lift these restrictions permanently, none have been successful to date.

Use of Modifiers for Medicare Telehealth Services Following the End of the PHE

At the onset of the PHE, CMS instructed practitioners to use an in-person place of service (POS) code (i.e., the code that would have been used had the service been provided in-person) and created an interim CPT telehealth modifier (modifier “95”) to be used for the duration of the PHE. CMS also maintained the facility payment rate for services billed using POS code “02.”

In response to commenters’ concerns regarding payment stability in a post-PHE period, CMS instructs providers in the Final Rule to continue, through the latter of the end of CY 2023 or the end of the calendar year in which the PHE ends, to bill telehealth claims with modifier “95” and the place of service indicator that would be used for an in-person visit.

CMS also states that beginning January 1, 2023, CPT modifier “93” must be used for eligible mental health services provided using audio-only technology. All providers must also append Medicare modifier “FQ” for allowable audio-only Medicare telehealth services. Providers may choose one where both “FQ” and “93” modifiers are appropriate and accurate.

Direct Supervision

In March 2020, CMS waived certain requirements to permit “direct supervision” during the PHE to include virtual presence using real-time audio/video technology. In the Final Rule, CMS states it expects virtual direct supervision will be sufficient through the end of 2023 but that it will not continue to permit virtual direct supervision outside the calendar year in which the PHE ends. While commenters expressed support for allowing virtual direct supervision outside the circumstances of the PHE, CMS concluded that it needs more time to gather data and evidence before deciding whether to allow virtual direct supervision permanently.

Remote Therapeutic Monitoring

The Final Rule also includes changes affecting billing and payment for remote therapeutic monitoring (RTM).

Following its establishment of a new set of codes providing reimbursement for RTM in the CY 2022 Medicare Physician Fee Schedule, CMS heard from many stakeholders expressing concern about the need to increase beneficiary access to RTM and reduce the burden on providers created by the requirement for direct supervision of personnel performing associated clinical labor tasks. CMS also cites confusion among providers about the role of nonphysician practitioners in these services.

In response, for CY 2023, CMS proposed the creation of new G-codes to allow certain RTM functions to be provided by nonphysician practitioners, and to value clinical labor activities that may be furnished by auxiliary personnel under “general” supervision. However, in the Final Rule, CMS declines to finalize these codes, primarily citing continued confusion among providers about the coding and payment structure for RTM. Instead, CMS preserves its current payment policy for RTM with modifications; importantly, CMS clarifies that RTM services may be furnished under general supervision. Although CMS indicates that it will consider future rulemaking code revisions for RTM, including codes that may require fewer than 16 days of data collection for RTM devices, the 16-day requirement remains in effect for codes 98975, 98976 and 98977 for CY 2023.

Please contact the authors if you have any questions about the changes related to the telehealth in the Medicare Physician Fee Schedule for CY 2023.

Series: Changes to Medicare Physician Fee Schedule for CY 2023

On November 2, 2022, the Centers for Medicare & Medicaid Services filed a final rule implementing changes to the Medicare Physician Fee Schedule for CY 2023 (Final Rule). Within this Final Rule are significant changes for various healthcare industry sectors. The healthcare attorneys at Bass, Berry & Sims have reviewed the Final Rule and have provided an in-depth analysis broken down by topic. Additional installments in this series focus on updates related to:

• Clinical Laboratories
• Behavioral Health
• Medicare Provider and Medicare Shared Savings Program

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