Medicare Compliance & Reimbursement

Plus: Feds opt to extend some telehealth flexibilities … again.

If you thought the feds would offer a reprieve from the crushing 4.5 percent cut to the 2023 conversion factor (CF), think again. Despite advocacy from industry organizations to reverse the payment decreases, Congress opted for the middle ground but did provide relief in other areas. Read on for the details.

Context: On Dec. 29, 2022, President Biden signed the Consolidated Appropriations Act, 2023, into law, offsetting impending 2023 Medicare payment cuts. The legislation will fund the government through the end of the fiscal year on Sept. 30, 2023. Among the top Medicare-related updates were adjustments to the CY 2023 CF, changes to the PAYGO sequester, and extensions for the COVID-inspired telehealth flexibilities and waivers.

Here Are 5 Points to Know

When the Centers for Medicare & Medicaid Services (CMS) released the CY 2023 Medicare Physician Fee Schedule (MPFS) final rule in November, it landed with a thud and was met with industry ire. Both the American Medical Association (AMA) and the American Hospital Association (AHA) urged Congress to get involved after CMS finalized cutting the CF by $1.53 from $34.61 to $33.08 (see Medicare Compliance & Reimbursement, Vol. 48, No. 22).

Legislators heard the outcry, but instead of completely circumventing the 4.5 percent payment crunch, they decided on a partial adjustment that spans a couple of years. Here’s a breakdown of the five CAA, 2023, actions you should add to your Medicare reimbursement checklist:

1. Understand how the CF change will work. Instead of a 4.5 percent CF reduction next year, you can expect a two-pronged approach spanning two payment cycles. “The bill would offset the planned cuts by more than 2 percent, providing a 2.5 percent positive adjustment to the CF for calendar year (CY) 2023, and a 1.25 percent positive adjustment to the CF for CY 2024,” explains McDermott+Consulting, an affiliate of law firm McDermott Will & Emery, in a bill summary.

The AMA feels Congress should have gone farther to help providers. “The AMA is extremely disappointed and dismayed that Congress failed to prevent Medicare cuts next year, threatening the financial viability of physician practices and endangering access to care for Medicare beneficiaries,” laments AMA President Jack Resneck Jr., MD, in a release. “This 2 percent cut following two decades of flat payment rates will have consequences on health care access for older Americans. High inflation compounds the threat to practice viability because physicians are the only Medicare providers without annual inflation-based updates,” he adds.

2. Get ready for the PAYGO cuts to get pushed to a later date. The bill offers some relief on the much-maligned PAYGO Medicare sequester by preventing the cuts in 2023 and 2024.

“The Statutory Pay-As-You-Go Act of 2010 (PAYGO) requires that automatic payment cuts of 4 percent be put into place if a statutory action is projected to create a net increase in the deficit over either five or 10 years,” McDermott explains. In fact, “the PAYGO sequester has never actually been implemented despite being triggered on multiple occasions,” it notes.

Last December, Congress postponed PAYGO cuts for a year in its omnibus spending package (see Medicare Compliance & Reimbursement, Vol. 48, No. 1). This year, at least that relief will last two years.

“The CAA 2023 would ‘wipe the PAYGO scorecard clean’ for FY 2023 and FY 2024,” McDemott says. But “Congress likely will have to contend with PAYGO obligations again in two years,” it cautions.

3. Know the scoop on the telehealth waivers' extensions. Due to COVID-19, providers have grown to rely on telehealth to better serve their patients. The bill addresses that reliance and offers waiver extensions and expansions related to Medicare coverage of telehealth.

Some of the Medicare telehealth waivers and flexibilities were slated to end 151 days after the COVID-19 public health emergency (PHE) ends. The omnibus bill modifies or extends coverage of the following items through Dec. 31, 2024:

• Continue the temporary suspension of geographic site requirements;
• Expand and allow a patient’s home to be an originating site for telehealth services;
• Allow Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) to provide telehealth services to patients;
• Add occupational therapist, physical therapist, speech-language pathologist and audiologist to the list of eligible telehealth providers;
• Extend Medicare coverage and payment of audio-only telehealth services; and
• Defer the in-person behavioral health visit requirement for six months for patients not covered under the geographic eligibility provisions.

Extra: “Additionally, the omnibus bill will extend safe harbor exceptions for telehealth services in high-deductible health plans,” AHA explains in a special bulletin on the legislation.

4. See how the bill impacts MACRA. Providers can opt for the higher incentive payment route under MACRA — Advanced Alternative Payment Models (APMs). One of the omnibus bill provisions extends the incentive payment boost, which was scheduled to end in 2022, for providers who choose the APM track through the 2023 performance year/2025 payment year.

Caveat: Though the extension is helpful, the legislation reduces the incentive bonus to 3.5 percent for providers who qualify for it, instead of 5 percent, which is what it was set at in previous payment years.

5. Find out the budget changes for clinical labs. Payment cuts and reporting requirements will get pushed back by one year under the CAA, 2023.

“The bill would provide another one-year delay of the [Protecting Access to Medicare Act] PAMA reporting periods (until the first quarter of 2024) and an extension of the 0 percent freeze for future cuts through December 31, 2023,” McDermott says. “This provision is expected to save money,” the consulting firm adds.

Resource: Review the legislation at www.appropriations.senate.gov/imo/media/doc/JRQ121922.PDF.