Medicare Compliance & Reimbursement

Budget neutrality mandates are at the heart of the annual Medicare conversion factor crunch. But congressional leaders want to change that and add some more money to your wallet in 2025.

Refresher: In the latest Medicare Physician Fee Schedule (MPFS) proposed rule published last July in the Federal Register, the Centers for Medicare & Medicaid Services (CMS) proposed to cut the calendar year (CY) 2024 conversion factor by 3.34 percent (see Medicare Compliance & Reimbursement, Vol. 49, No. 15).

Now: On Oct. 18, the House GOP Doctors Caucus announced legislation to change the threshold for updating budget neutrality. “The draft legislation would update the current $20 million budget neutrality threshold under the [M]PFS to $53 million in 2025,” notes McDermott+Consulting, an affiliate of law firm McDermott Will & Emery, in a summary of the legislation. “The $53 million threshold would then be updated by an inflationary factor — the Medicare Economic Index — every fifth year starting in 2030.”

Other key pieces of the legislation include:

• Mandating a lookback period.
• Ensuring CMS use the most reliable data when calculating the payment changes.
• Updating direct costs every five years to better calculate relative value units (RVUs).

Peruse the draft legislation at https://wenstrup.house.gov/uploadedfiles/pfs_discussion_draft.pdf.