The Comments are In! Responses to the Physician Fee Schedule Proposed Reg

Time’s up and pencils down! Comments on the calendar year (CY) 2024 physician fee schedule (PFS) proposed reg were due earlier this week. Now, the Centers for Medicare & Medicaid Services (CMS) will have to review them and issue a final reg on or before November 1, 2023—60 days before the start of the new year.

There are thousands of comments on this massive reg, and it will take a while to go through them all. However, my colleague Kristen O’Brien and I want to highlight some of the initial themes we have identified.

First, a note: physicians and other provider groups are not the only ones submitting comments.

And why is that? It’s because the policies and payment rates established in the PFS reg not only impact Medicare, but also can affect corresponding private insurance and Medicaid policies. As a result, a broad range of stakeholders, including hospital groups, technology companies and private insurers, typically weigh in as well. Even within certain stakeholder groups, there may not be consensus on certain issues. So, let’s dig in on some of the main themes in the PFS comments.

The Most Divisive Issue

Although provider groups expressed universal concern and disappointment about the proposed 3.3% cut to the PFS conversion factor (especially given the expected 4.5% increase in inflation next year), the groups were split on their opinions about the main contributor to the cut: the proposed add-on code for complexity, G2211. (As a reminder, CMS proposed this code as a way to capture the additional time and resources needed to care for a patient with a complex medical condition.) In general, family and internal medicine organizations supported the code, while others, mainly specialists like surgical groups and emergency medicine organizations who would not use the code as proposed, mainly opposed it. However, both stakeholders who supported the code and those who opposed it did agree that CMS overestimated how often the code would be used. While CMS significantly reduced its initial utilization assumptions (from 90% to 38%), they are still significantly higher than the actual utilization of other similar codes, such as chronic care management (found on 2.3% of total claims) and transitional care management services (found on 9.3% of eligible claims). Many were skeptical of CMS’s projections and asked for refinements in the final reg.

It is important to remember that CMS’s assumptions about utilization are just that: assumptions. They may be wrong. But whether they are correct or not, the impact of the assumptions on the PFS conversion factor is real and is creating concern across stakeholder groups. Given that it often takes time to change billing and coding practices, many believe that CMS should recognize there will likely be a delay in the uptake of the new codes, and that more conservative estimates might be more appropriate.

Asking for More Clarity

Telehealth 

CMS also received a lot of comments around the use of telehealth. Most provider groups and telehealth stakeholders supported the continued flexibility that CMS is proposing to provide, including 1) keeping the telehealth codes that were added to the Medicare Telehealth List during the COVID-19 public health emergency on the list through CY 2024; 2) extending the direct supervision waivers and 3) allowing providers to bill at the higher, non-facility rate for telehealth services provided while patients are located in their homes. The consensus was that telehealth continues to benefit patients, improve access, and should be supported beyond the pandemic.

Despite this support, many stakeholders wanted more clarity from CMS on the future direction of telehealth. Specifically, what will billing, coding and payment look like in the future, and why are we continuing to offer only incremental or temporary steps in some instances? While the agency proposed to refine its process for covering and paying for telehealth services, many wanted a clearer picture of how this would work in practice—and whether it still sets the bar too high based on the available evidence related to telehealth. The American Medical Association (AMA) Relative Value Scale Update Committee (RUC) has started evaluating 17 new telehealth evaluation and management (E/M) codes that could be implemented in the PFS in the future. And yet, the initial interim RUC recommendations for these new codes were not addressed in the proposed reg. Many commenters believed that it would be prudent for CMS to wait to alter its Medicare telehealth payment policies until the agency has a chance to evaluate the new codes and signal a clearer direction for telehealth in the future.

Remote Monitoring Services

Numerous stakeholders weighed in on CMS’s proposed clarifications to remote monitoring services, including both remote physiological monitoring and remote therapeutic monitoring services. CMS had also requested additional information from healthcare providers and other stakeholders regarding the use of remote monitoring, remote cognitive behavioral therapy (CBT) and other digital therapeutic modalities. Groups were overall concerned that the clarifications CMS provided would create restrictions or limitations that could temper the use of the clinically appropriate and medically necessary services. Further, groups in support of digital CBT services touted the effectiveness of these treatments and requested that CMS move forward immediately with establishing coverage pathways for them in the final reg.

United Voices

Where commenters seem to agree is in their concern over the direction CMS is heading with the Quality Payment Program (QPP), including the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs). Many physician groups opposed the proposed increase in the MIPS performance threshold from 75 points in 2023 to 82 points in 2024, noting that this increase is too sharp given that many clinicians have not had to report the last few years because of the COVID-19 hardship exemption. Further, they pointed to CMS’s own estimate that if the policy were finalized, more than half of all clinicians (including 60% of small groups) would fail to meet the threshold and would therefore receive a penalty. Groups also requested that CMS explore ways to make MIPS more meaningful to providers, including making changes to the MIPS Value Pathways (MVP) approach that CMS is moving toward. For example, the AMA believes that MVPs mirror traditional MIPS too closely, and that CMS should “meaningfully reduce burden for participants by increasing scoring simplicity and predictability, removing the population health measures unless relevant to the MVP, aligning performance goals across the four MIPS categories, and increasing flexibility for CEHRT [certified electronic health record technology] use and demonstration.”

With respect to Advanced APMs, groups were concerned about the lack of opportunities for specialists to meaningfully participate in innovative models. Further, they opposed CMS’s proposed change in determining who is a qualifying APM participant (QP). (In order to be exempt from MIPS and qualify for an Advanced APM bonus, clinicians must provide at least a certain percentage of their payments or care for a certain percentage of their patients through the Advanced APM. Clinicians who meet this threshold are called “QPs”.) Since the inception of the QPP, QP status has been determined at the Advanced APM entity level rather than at the individual clinician level. This year, CMS proposes that—beginning with the QP performance period for CY 2024—it would make all QP determinations at the individual level. Most groups believe that this change would make it even more difficult for specialists to meet the QP thresholds.

Finally, there was near-universal support for these proposals:

• To continue to delay the transition to using only time to determine the substantive portion of a split (or shared) service through the end of CY 2024
• To continue not imposing financial penalties on providers who fail to comply with the requirement regarding electronic prescribing of controlled substances
• To indefinitely delay implementing the Appropriate Use Criteria Program
• To establish new codes and payments for community health integration services, social determinants of health risk assessment, and principal illness navigation services provided by social workers, community health workers and other auxiliary personnel (although some commenters urged CMS to go even further and expand the scope of these services)
• To make certain changes to the Medicare Shared Savings Program and the national accountable care organization (ACO) program, including capping the regional risk scores and using the same risk model in the benchmark and performance years (there was, however, nearly universal opposition to requiring all ACOs to report the Promoting Interoperability category of MIPS, regardless of track or QP status)

As noted, we are still pouring over different stakeholder reactions and expect that more nuanced trends and themes could emerge. We also know that the possibility for congressional action could further shape both the outcome of CMS’s rulemaking and the ultimate impact on physician and clinician practices. We would love to hear any thoughts from you on reactions to the reg and key issues you’re seeing and tracking.

Until next week, this is Jeffrey (and Kristen) saying, enjoy reading regs with your eggs.