Doc Groups Unhappy With 4.5% Cut in the 2023 Medicare Fee Schedule Final Rule

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.”