The CMS on Thursday proposed major updates to physician and outpatient and ambulatory surgical center payments under Medicare for 2024.
Regulators proposed cutting payments to physicians by 1.25% compared to this year, in part due to a 3.34% decrease in the conversation factor, in its 2024 Medicare Physician Fee Schedule rule. The CMS uses the conversation factor to calculate payments based on the cost and difficulty of a medical procedure or service.
The CMS said that the cuts reflected its efforts to remain budget-neutral as it boosted payment for other services like primary care, but the fee decrease was received negatively by hospital groups. MedPAC, the group that advises Congress on Medicare policy, earlier this year recommended updating physician payment rates by 1.45%.
“Medicare already largely fails to cover the cost of furnishing care to beneficiaries, and the proposed cut to the 2024 conversion factor compounds the problem,” Anders Gilberg, SVP of government affairs at the Medical Group Management Association, said in a statement.
The American Medical Association called the rule “almost biblical in its impact” and heightened calls for Congressional reform to the Medicare physician payment system.
“Seven lean years that include a pandemic and rampaging inflation,” AMA President Jesse Ehrenfeld said in a statement. “Physicians need relief from this unsustainable journey.”
The CMS also proposed a number of significant changes to behavioral healthcare and health equity. Regulators proposed allowing family and marriage therapists and addiction counselors to bill Medicaid for their services for the first time, and increasing payments for services like crisis care and substance use disorder treatment.
The CMS also proposed paying for caregiver training in certain instances, and new payments for community health workers.
Hospital outpatient bump
In a separate rule, the agency proposed a 2.8% pay increase for hospital outpatient facilities.
The increase, in the agency’s Outpatient Prospective Payment System and Ambulatory Surgical Center 2024 proposed rule, reflects a 3% boost in the hospital market basket rate and a 0.2% decrease in the productivity adjustment.
The agency also said that it plans to continue applying the productivity-adjusted basket update to the ASC payment rate for two more years due to disruptions from the COVID-19 pandemic.
Jefferies analyst Brian Tanquilut said altogether the rule “augurs well” for hospitals, but hospital groups said the proposed pay increases don’t go far enough.
“The AHA is concerned that CMS is proposing an outpatient hospital payment update of only 2.8% in spite of persistent financial headwinds facing the hospital field,” American Hospital Association EVP Stacey Hughes said in a statement.
The proposal also includes several changes to price transparency requirements, including new requirements that hospitals standardize the charge data they report and new requirements for how hospitals publicly post the files on their websites.
The CMS is also doubling down on enforcement. Regulators want to require hospital officials to certify the data’s accuracy and completeness and acknowledge warning notices, and publish enforcement details, along with civil monetary penalties, on a CMS website.
Hospitals have been required since 2021 to post prices of the 300 most common procedures online in consumer-friendly formats. However, hospitals have had flexibility regarding what forms or formats to display the charges, and compliance has been shaky.
Only about a quarter of 2,000 U.S. hospitals are complying with price transparency requirements on their websites, according to a report earlier this year. Noncompliant hospitals included major for-profit and nonprofit chains like HCA Healthcare, Tenet and Providence.
The noncompliance led regulators to increase the maximum penalty to over $2 million for large hospitals failing to satisfy transparency requirements.
The CMS is also proposing establishing an intensive outpatient program under Medicare to address a coverage gap for beneficiaries with needs that are more intensive than individual outpatient therapy visits, but less intensive than a partial hospitalization. The IPO would include coding, billing, benefits and payment rates for services in hospital outpatient departments, rural health clinics, community medical centers and more.
The IOP aligns with the behavioral health changes outlined in the physician fee proposed rule and, if finalized, would “address one of the main gaps in behavioral health coverage in Medicare,” according to the agency.
The comment period for both rules is open until September 11.