AOA members can take action now by urging Congress to support H.R. 2474
Summary attributable to the AOA Public Policy Team:
On Nov. 2, the Centers for Medicare & Medicaid Services (CMS) issued the CY2024 Medicare Physician Fee Schedule final rule which includes updates to physician payment policies and the Quality Payment Program (QPP). The rule makes critical changes to payment that we want to highlight. The Public Policy team will continue to go through the final rule and develop a more detailed outline and assessment, which will be available in the coming days.
Most significantly, CMS has reduced the CY2024 conversion factor by 3.37 percent from $33.8872 to $32.7442. The anesthesia conversion factor will also decrease from $21.1249 to $20.4349. These reductions, which apply to services across the fee schedule, are the result of statutorily mandated reductions that AOA has been fighting to address. Statutory requirements prevent CMS from upwardly adjusting payment under the physician fee schedule each year. Statute also requires that any changes to the fee schedule are applied in a budget neutral manner. This means that any changes to RVUs may not result in a net increase to Medicare expenditures when accounting for anticipated utilization.
The drivers of the 3.37% conversion factor reduction include the following:
These cuts come amid rising costs of practicing medicine which are unsustainable. Between 2010 and 2022, practice costs as measured by the Medicare Economic Index increased 24%, and in 2024, CMS expects costs will further increase by 4.6%. The AOA has been continuously working with lawmakers to express the urgent need to reform physician payment and avert the cuts that will take effect in 2024.
Most recently, the AOA submitted statements for a hearing held by the House Energy and Commerce Subcommittee on Health and urged action to address declining Medicare payment by establishing annual inflation-based updates, reforming budget neutrality requirements, extending the 1.0 work geographic practice cost index floor, and averting laboratory service payment cuts. The AOA submitted similar comments to the House Ways and Means Committee on October 4, and has also launched a campaign calling on Congress to pass legislation that would protect physician practices by establishing annual, stable updates to payment. AOA members can take action now by telling your Member of Congress to support H.R. 2474.
The AOA is also disappointed that CMS chose not to modify its anticipated utilization assumptions for the newly created office/outpatient evaluation and management (E/M) visit complexity add-on code (G2211), which impacted the final conversion factor. AOA submitted comments on the proposed rule outlining expectations for utilization for CMS to consider in its final budget neutrality calculation. This included data demonstrating the low uptake of chronic care management and transitional care management codes, as well as expectations for being able to broadly educate physicians on the newly created code.
While much of the budget neutrality adjustment is attributable to the implementation of the G2211 code, the new code presents an opportunity for enhanced payment for longitudinal patient care. In the final rule, CMS provides clearer guidance on appropriate use of the new code, defining key terms within the code’s descriptor. The AOA will develop resources to support members in taking advantage of this new code. In parallel, the AOA will also continue working with Congress to reform statutory budget neutrality requirements.
Overall, the rule reflects a commitment by CMS to support comprehensive, longitudinal patient care and to address social determinants of health. CMS is finalizing provisions to pay for Community Health Integration, Social Determinants of Health (SDOH) Risk Assessment, and Principal Illness Navigation services which account for resources when clinicians involve certain types of health care support staff in providing comprehensive care. CMS is also finalizing a range of provisions that will support continued delivery of telehealth services and improve payment for behavioral health services.
In another advocacy win, CMS withdrew its proposal to increase the Merit-Based Incentive Payment System (MIPS) performance threshold and will instead maintain the current threshold of 75 points for the 2024 performance year. AOA expressed concern that raising the performance threshold would disadvantage small and independent practices, especially those that sought extreme and uncontrollable circumstance exemptions from the MIPS program through 2023 and are just resuming full participation. More broadly, AOA will continue to advocate for reforms to the Quality Payment Program to alleviate physician burden.
The AOA will continue to review the rule and provide additional details in the coming days.