The Good and Bad of the Medicare Physician Fee Schedule Proposal

Bad: Conversion factor reduction

“MGMA is concerned about the potential impact of the proposed 3.75 [percent] reduction to the conversion factor due to budget neutrality requirements and will seek congressional intervention to avert the cut,” Gilberg stated.

If finalized as is, the conversion factor in 2022 would be $33.58, a reduction of over a dollar compared to the conversion factor this year. The agency said the proposed conversation factor, which Medicare bases physician payment rates on, reflects a statutory update of 0.00 percent and necessary adjustments based on changes in relative value units (RVUs) and expenditures from other proposed policies in the rule. The conversion factor proposal also accounts for budget neutrality and the expiration of the 3.75 percent rate increase physicians received last year as part of coronavirus-related legislation, CMS stated in the rule.

However, the proposed conversion factor does not keep up with inflation and could harm certain specialists, according to the Surgical Care Coalition.

“These cuts harm the care patients need and deserve, which is the opposite of what CMS is trying to achieve,” said David B. Hoyt, MD, FACS, American College of Surgeons Executive Director, on behalf of the group. “Without congressional action, surgical care faces a significant payment cut and threatens patient access to critical treatments and procedures. All patients deserve a [healthcare] system that invests in surgical care and does not create uncertainty year after year.”

The Surgical Care Coalition urged Congress to address the reduction to physician reimbursement next year.

“By acting to mitigate reimbursement cuts for surgical care, Congress acknowledged how misguided and devastating CMS's policies are to patients,” said Alan M. Speir, MD, Coalition member and health policy and relationships chair at the Society of Thoracic Surgeons Council. “Congress must intervene again to ensure that patients are able to access the lifesaving surgical care they need.”

Mixed: Changes to the Shared Savings Program

The Physician Fee Schedule proposed rule also included significant changes to Medicare’s flagship accountable care organization (ACO) program, the Shared Savings Program. Key changes proposed in the rule included a longer transition to new electronic quality reporting requirements.

The National Association of ACOs (NAACOS) applauded CMS for postponing the start of electronic quality reporting requirements, which were finalized last year during the COVID-19 pandemic. A survey fielded by NAACOS in the spring found that three-quarters of responding ACOs were concerned with the new requirements.

“Delaying last year’s changes is the right thing to do. The healthcare industry, including ACOs, electronic health record (EHR) vendors and government payers, need more time before mandating electronic quality measures, and we are pleased to see CMS provide this necessary transition time,” Clif Gaus, ScD, president and CEO of NAACOS, said on the group’s website yesterday.

The delay to electronic ACO quality reporting was generally a welcome proposal. However, the American Medical Group Association (AMGA) expressed concerns with another potential change to the Shared Savings Program.

CMS has proposed to allow participating ACOs to remain in the BASIC Track’s glide path to risk-heavy tracks for the 2022 performance year. But ACOs that choose to do this would have to skip a level in the glide path, landing them in a higher risk pathway the next year.

“CMS created a glide path to taking on risk for a reason,” said AMGA President and CEO Jerry Penso, MD, MBA. “While we appreciate the flexibility CMS is offering ACOs due to the COVID-19 pandemic, we believe that ensuring ACOs can learn to take on risk more gradually is important for the move to value to succeed.”

Good: Expanded telehealth reimbursement, AUC program delay

CMS has sought to expand telehealth reimbursement for certain services through the Medicare Physician Fee Schedule in 2022, much to the delight of physician groups.

“MGMA is encouraged that CMS heeded our call to expand coverage for audio-only mental health services and views this proposal as a positive step to increase access to vulnerable populations that would otherwise go without care,” Gilberg said in the group’s statement.

The proposed rule focused on telehealth reimbursement expansion for mental and behavioral services, which could be payable when rendered in patient homes. CMS also floated allowing certain services that were added to the Medicare telehealth list during the pandemic to remain there at least until the end of 2023.

“[W]e are encouraged by CMS’s proposal to extend several of the telehealth flexibilities implemented at the start of the public health emergency through the end of 2023 as well as its commitment to evaluate whether these changes should be made permanent,” Blair Solow, MD, government affairs committee chair of American College of Rheumatology’s Government Affairs Committee Chair, said in an email to RevCycleIntelligence.

Industry groups also commended CMS for proposing to postpone the punitive phase of the Appropriate Use Criteria (AUC) program until after the COVID-19 public health emergency expires. The program launched in 2020 was originally going to penalize clinicians who ordered advanced imaging without consulting a qualified Clinical Decision Support Mechanism at the start of 2022.

“The AHA is pleased to see the enforcement delay for the Appropriate Use Criteria program,” said Stacey Hughes, executive vice president of the American Hospital Association (AHA). “This additional time will enable hospitals and other providers to maintain their ongoing response to the COVID-19 crisis while allowing essential education and operations testing of the AUC program to occur.” 

CMS is accepting comments on the proposed rule through September 13, 2021.