Physician Fee Schedule Final Rule Cuts Doctor Pay Again; Reductions in Light of Inflation Will Increase Questions Around Sustainability
11-6-23 (by: Scott Gleason) The Centers for Medicare & Medicaid Services (CMS) has released its Calendar Year 2024 Medicare Physician Fee Schedule (PFS) final rule. The final rule cuts physician pay by 1.25% but does provide increased support for primary care, behavioral health, programs around health equity, extends the ability to provide diabetes care virtually, and adds dental care for cancer patients. From a big picture perspective, Medicare payment for physicians has declined meaningfully and even more meaningfully when compared to inflation. At some point declines could impact patient care and access. The finalized rule reduces payment amounts under the PFS by 1.25% compared to 2023, but does increase payment for specific services like primary and longitudinal care. The conversion factor which translates to pay rates under the PFS is now 7% lower than it was in 2016.
The Association of American Medical Colleges issued the following response in relation to the cuts: “Payment reductions of this magnitude would pose a major problem at any time, but to impose these cuts at a time when teaching physicians and other health care professionals are still recovering from the financial impact of the COVID-19 pandemic, experiencing historic workforce shortages, and record-setting inflation and rising practice costs, will be extremely harmful.”
The rule also has changes to focus on health equity. CMS is introducing coding and payment for various services intended to assist underserved populations, including caregiver training services, community health integration services, and principal illness navigation services. These services will support individuals with high-risk conditions, such as cancer, and those with behavioral health conditions. This includes changes enabling marriage and family therapists and mental health counselors to enroll in Medicare and bill for their services starting in 2024. Payment increases are also finalized for crisis care, substance use disorder treatment, psychotherapy, and other services to improve access to behavioral health care.
The final rule also has provisions to increase payment for primary and longitudinal care. These changes align with the goals set by the Department of Health and Human Services to strengthen primary care. Additionally, changes in the Medicare Shared Savings Program are expected to increase ACO (Accountable Care Organization) participation by approximately 10% to 20.
The rule also addresses the Quality Payment Program and sets the performance threshold for the Merit-Based Incentive Payment System (MIPS) at 75 points for the CY 2024 performance period. This change acknowledges the impact of the COVID-19 Public Health Emergency on clinicians’ performance in the earlier performance periods. Previously, CMS had delayed reporting penalties on Quality Payment Program data due to COVID-19.
The final rule also has provisions to support the Biden-Harris Administration’s Cancer Moonshot initiative by allowing payment for dental services linked to cancer treatments.
Finally, the rule extends the Medicare Diabetes Prevention Program (MDPP) Expanded Model’s Public Health Emergency Flexibilities for four years, allowing MDPP suppliers to continue offering services virtually through December 31, 2027.