June 16, 2022

Preview of Major Medicare Regs Coming this Summer

During the hot and humid summer in Washington, D.C., many in the health policy community (including me!) take shelter at their desks waiting for major Medicare proposed regulations to appear in the Federal Register. With the air conditioner on full blast, we keep refreshing the Federal Register’s public inspection page at 4:15 pm EST every day to see if that is the day where we will need to quickly download and digest a 1,500+ reg and then begin the long, 60-day journey of developing a detailed response.

That lovely time of year will soon be upon us as the Centers for Medicare & Medicaid Services (CMS) get ready to release regs that propose changes to the Medicare payment systems for various types of health care professionals and facilities that, once finalized, go into effect the following calendar year.

As a reminder, here is how the regulatory process plays out:

Step 1: CMS proposes changes to Medicare payments for the following year in a proposed reg (thus, CMS will soon be releasing the calendar year (CY) 2023 proposed regs);

Step 2: There is a 60-day public comment period where the public (including ACEP) can submit feedback on the proposals (click here to see ACEP’s responses to previous Medicare regs); and

Step 3: CMS issues a final reg, where the agency responds to comments and establishes the final policies for the following year. The final reg is issued 60 days prior to the start of the new year, giving stakeholders enough time to understand the final policies before they become effective.

For emergency physicians, the most important reg is the Medicare physician fee schedule (PFS), which affects physician and other health care professional payments. The proposed PFS reg comes out in the heart of the summertime (typically the end of June or early July). At around the same time, CMS will also release the outpatient prospective payment system (OPPS) proposed reg that affects outpatient hospital payments, and this year will also issue proposed conditions of participation for new facilities called “Rural Emergency Hospitals.” While these will be massive regs that will include a plethora of issues affecting you and your patients, let me touch upon the major policy areas that I feel are particularly important to highlight.

Physician Fee Schedule

  1. Medicare Payment Cuts: As mentioned in previous Regs and Eggs blogs, we can expect CMS to propose a cut to the Medicare PFS conversion factor in the CY 2023 PFS proposed reg. The conversion factor converts the building blocks of PFS codes (relative value units or RVUs) into a dollar amount. This cut to the conversion factor stems from CMS’ decision back in the 2021 PFS reg (released in November 2020) to increase the values of the office and outpatient evaluation and management (E/M) services. These are the commonly used office visit codes that represent roughly 20 percent of total physician spending in Medicare. There is an existing budget neutrality requirement under the Medicare PFS which forces CMS to make an overarching negative adjustment to physician payments to counterbalance any increases in code values that CMS implements.

    Congress has stepped in the last couple of years to reduce the potential cut to the conversion factor. Most recently, Congress added back 3 percent to the 2022 conversion factor at the end of last year. However, that was only a one-year fix, and Congress needs to act again or the conversion factor will be cut by that same 3 percent in 2023. CMS could also make changes to other codes that could either increase or decrease the size of this 3 percent cut—so we will definitely be looking to see what the overall proposed conversion factor reduction is in the CY 2023 PFS proposed reg and the estimated impact the cut would have on emergency medicine.

    With respect to other code changes, we will also carefully monitor whether CMS proposes any changes to the values of the emergency department (ED) evaluation and management (E/M) codes (CPT codes 99281-99285). These are the codes that you as emergency physicians typically bill. ACEP has worked hard to preserve the value of these codes over the years and actually helped secure an increase to the ED E/M codes levels 3 through 5 (CPT codes 99283-99285) in both 2020 and 2021.

  2. Split and Shared Services: In last year’s PFS reg, CMS finalized a policy for determining whether a physician or non-physician practitioner should bill for an E/M service that they both were involved in delivering (called split/shared services). Under Medicare, a service can only be billed by one clinician, and if non-physician practitioners wind up billing for a service, they only receive 85 percent of the total Medicare rate.

    The finalized policy from last year’s reg applies only to E/M services delivered in facilities (including the ED)—and excludes critical care. The key here is deciding who provides the “substantive” portion of the service. CMS decided to phase in the policy — in 2022, the history, physical exam, medical decision making (MDM) or more than half of the total time spent with a patient can be used to determine the substantive portion of the split/shared visit. However, starting in 2023, only time will be used for the purposes of determining the substantive portion of a split/shared visit.

    ACEP, the American Medical Association (AMA), and many other specialty societies strongly oppose using only time to determine the substantive portion of a split/shared E/M service and have formally requested that CMS reverse its 2023 policy in the upcoming reg and instead modify it to allow the determination to be made based on time OR MDM. Time is extremely difficult to measure in the ED—as you all well know. Emergency physicians such as yourselves manage multiple patients at once, and keeping track of the specific time spent with an individual patient is nearly impossible (imagine bringing a stopwatch to each patient encounter!). Further, the time a physician and non-physician practitioner spends with a patient does not necessarily dictate which clinician actually provided the “substantive” portion of a service. If a physician for example makes a critical decision that leads to a diagnosis or treatment plan for the patient, then one could argue that should count as the “substantive” portion of the service, regardless of how much time the physician spent with a patient compared to a non-physician practitioner. The AMA and others have made recommendations to CMS on how MDM could be used to determine the substantive portion of a split/shared service, and we are eager to see if CMS does in fact address this issue in the upcoming reg and reverses its previously finalized policy.
  1. Telehealth: CMS has spent the last couple years expanding the use of telehealth services in Medicare, specifically by adding a multitude of new codes to a list of services that can be reimbursed by Medicare when delivered via telehealth. All five ED E/M codes, the critical care codes, and some observation codes have been added to this list on a temporary basis through December 31, 2023. It is unlikely that CMS will change that end date in this year’s reg. However, going forward into 2024, CMS may remove these codes from the list unless the agency receives compelling evidence that the delivery of the services via telehealth improves quality and reduces overall costs.

    CMS has also used its special authority during a public health emergency (PHE) to institute numerous waivers to Medicare telehealth rules. Thus, although the ED E/M codes will remain billable through 2023, it is unclear exactly when these other Medicare flexibilities will expire. Of all the policies that were implemented during the COVID-19 PHE, the one that has had the greatest impact has probably been the waiver of the “geographic” and “originating site” requirements for Medicare telehealth services. The geographic and originating site restrictions have historically limited Medicare payment for telehealth to services performed in rural areas where the patient is located at a facility such as a hospital and the clinician performing the service is located at another facility. By waiving these restrictions, patients have been able to receive telehealth services from anywhere during the pandemic—both in urban and rural areas and from the comfort of their own home. Congress has already extended the waiver for a 151-day period (around five months) that begins the day the PHE ends. At this point, it is unclear exactly when the PHE could end and when the 151-day clock would begin. The PHE may be extended again for 90 days after its current expiration date of July 15.

    Also of interest, earlier this week, the Office of Civil Rights (OCR) within the U.S. Department of Health and Human Services (HHS) issued guidance on how audio-only telehealth services can comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA). In the guidance, OCR also states when its current telehealth waiver will expire. OCR issued an important waiver in 2020 allowing telehealth services to be provided by technologies that do not comply with HIPAA (such as Facetime and Skype). OCR clarifies in the guidance that this waiver will expire at the end of the PHE. In other words, once the PHE ends, clinicians will again need to use technology platforms that comply with HIPAA when providing telehealth services.  

  2. Appropriate Use Criteria Program: Created by the Protecting Access to Medicare Act (PAMA), the Appropriate Use Criteria (AUC) program will eventually require physicians ordering advanced imaging for Medicare beneficiaries to first consult AUC through approved clinical decision support mechanisms in order for the furnishing provider to be able to receive payment. The AUC requirements, which were originally supposed to go into effect in 2017, have already been delayed several times, most recently until January 1, 2023.

    PAMA exempts emergency services defined as an “applicable imaging service ordered for an individual with an emergency medical condition” from the requirements. As a result of ACEP’s advocacy, in the 2019 PFS final reg (page 59,699), CMS clarified that exceptions granted for an individual with an emergency medical condition include instances where an emergency medical condition is suspected, but not yet confirmed. This may include, for example, instances of severe pain or severe allergic reactions. In these instances, the exception is applicable even if it is determined later that the patient did not, in fact, have an emergency medical condition. In other words, if physicians think their patients are having a medical emergency (even if they wind up not having one), they are excluded from the AUC requirements.

    Although this exception for emergency medical conditions exists, ACEP has heard that some hospitals have not appropriately updated their systems to allow emergency physicians to claim the exception. This has caused confusion and fear that emergency physicians, despite the noted exception, would still have to consult appropriate use criteria even during suspected or confirmed medical emergencies, wasting valuable time. Thus, while CMS has continuously delayed the program, we have previously requested that CMS work with Congress to repeal the program in its entirety. Overall, we have argued that the program is unnecessary and could harm patient care by postponing vital treatment. In this upcoming PFS reg, CMS may finally decide to let the program proceed on January 1, 2023 and not institute another delay. If CMS does decide to do this, ACEP stands ready to oppose that proposal and continue to push for a delay and the eventual full repeal of the program.
  1. Merit-based Incentive Payment System: 2023 is gearing up to be a big year for the Merit-based Incentive Payment System (MIPS). As a reminder, MIPS is the major value-based performance program for physicians under Medicare. Established by the Medicare Access CHIP and Reauthorization Act (MACRA), it includes four performance categories: Quality, Cost, Improvement Activities, and Promoting Interoperability (formally known as Meaningful Use). Performance on these four categories (which are weighted) comprise an overall score that translates to an upward, downward, or neutral payment adjustment that clinicians will receive two years after the performance period (for example, performance in 2023 will impact Medicare payments in 2025). Most of you as emergency physicians will need to participate in MIPS to avoid upwards of a 9 percent (!) penalty to your Medicare reimbursement, and perhaps get a bonus. You can report as an individual or as part of a group.

    While the maximum penalty is 9 percent, the maximum bonus for performing well in MIPS is adjusted to preserve overall budget neutrality. In other words, CMS first determines which clinicians will receive a penalty and then uses that pool of penalties to pay out the bonuses. There is also separate funding that Congress provided in MACRA for an “exceptional bonus” to reward outstanding performers each year, but that funding is set to expire after bonuses are paid in 2024 (based on performance in 2022). The first performance period for MIPS was 2017, and for the first five years of the program, most clinicians have avoided a penalty. Therefore, even with the availability of the exceptional bonus, clinicians who performed extremely well in MIPS have still only been eligible for a small bonus (1-3 percent). This was especially true in the last few years, when CMS created numerous hardship exemptions for COVID-19. In fact, for the 2019, 2020, and 2021 performance years, CMS made MIPS reporting optional for clinicians by creating an automatic hardship exemption. If clinicians did not report any MIPS data, they were held harmless from any penalties.

    The era of COVID hardship exemptions and small bonuses however will soon come to an end. In 2022, CMS significantly raised the bar, making it much harder to avoid a penalty and receive a bonus. And in 2023, CMS could do the same. Further, while there may still be some sort of COVID-19 exemption process in 2022, there probably won’t be any policy in place for 2023—meaning that for the first time in years, every eligible clinician will need to play ball.

    So, what can you expect for 2023 in MIPS, and how can you prepare? First, let’s talk about the performance threshold—or the point threshold clinicians needed to exceed to avoid a penalty and get obtain a bonus. In 2022, CMS set the performance threshold at 75 points, a significant increase from the 2021 threshold of 60 points. Due to this significant increase, CMS expects that many more clinicians in 2022 will receive a penalty, even with a COVID-19 hardship exemption process in place. In 2023, CMS could decide to increase that threshold even more, but hopefully the agency will ultimately decide to keep that threshold at 75 points for one more year.

    Next, it is important to understand the performance category weighting changes. Each of the four performance categories has a specific weight—and while the Quality category had the most weight for the first five years of the program, the Cost category is catching up, now representing 30 percent of the total MIPS score. As I described in a previous blog post, right now, there are no emergency medicine-specific cost measures. The main cost measure that some emergency physicians are accountable for in MIPS is a general measure called the Medicare Spending Per Beneficiary (MSPB) clinician measure. The MSPB measure is a black box calculated by CMS using administrative data, and we’ve heard numerous complaints from you about the validity of the measure and its attribution methodology. Obviously, this lack of transparency needs to be addressed—and you need to have a solid, reliable cost measure that reflects the cost of care you provide, or else you could be subject to substantial financial penalties in the MIPS program going forward. To help address the lack of emergency medicine-specific cost measures, CMS and their contractor, Acumen, have developed a cost measure that could be directly attributable to emergency medicine clinicians. ACEP has helped lead the way in that development process—and we provided substantial input on the measure. However, the measure still needs to be finalized—and the earliest it could be incorporated into MIPS is 2024.

    The 2023 performance year is also the first year of a new reporting option in MIPS called MIPS Value Pathways (MVPs). MVPs represent an approach that will allow clinicians to report on a uniform set of measures on a particular episode or condition in order to get MIPS credit. ACEP developed an emergency medicine-focused MVP that CMS will be including in the first batch of MVPs starting in 2023. Therefore, you as an emergency physician will have the option to report measures in the MVP next year. To learn more about the MVPs, including the emergency medicine MVP, please click here. While reporting the MVP is optional in 2023, CMS envisions making MVP participation mandatory at some point in the future, so it may be worthwhile to explore this option now.

    Lastly, CMS continues to make other aspects of MIPS reporting more difficult. For instance, last year, CMS modified the quality measure scoring requirements by removing the end-to-end electronic reporting and high-priority measure bonus points as well as the 3-point floor for scoring measures without a benchmark (with some exceptions for small practices and new measures). These modifications make it harder to receive a high score in the Quality category. At the same time, hospital-based clinicians such as yourselves may not have access to the facility-based scoring option in 2022—for the second year in a row. Under this option, hospital-based clinicians receive the quality and cost performance score for their hospital through the Hospital Value-Based Purchasing Program (HVBP). Hospital-based clinicians still have the opportunity to report quality measures through a traditional mechanism—and CMS will automatically take the higher of that quality score and the facility score when determining clinicians’ final MIPS performance score. Due to COVID-19, CMS is not calculating HVBP scores for hospitals this upcoming year, so the agency has no way of determining the facility-based score for hospital-based clinicians. Some clinicians, especially those in small practices and those located in rural areas, may count on the facility-based scoring option in order to receive the best possible MIPS performance score—so not having this option available again in 2022 is far from ideal. We don’t know whether this option will be available in 2023, and CMS may impose additional changes in 2023 as well that will make it even harder to avoid a penalty and achieve a bonus

    To prepare for this big year coming up, you should start thinking now about how you plan to report. Some clinicians use Qualified Clinical Data Registries (QCDRs) to meet all the reporting requirements. If you report through a QCDR, you have access to additional specialty-specific quality measures as well as performance reports throughout the year that help assess your performance. ACEP has developed its own QCDR, the Clinical Emergency Data Registry (CEDR), aimed at helping emergency physicians maximize their MIPS performance scores. CEDR will also support clinicians who want to test out the new emergency medicine MVP in 2023.

Outpatient Rule and Conditions of Participation for Rural Emergency Hospitals

  1. Rural Emergency Hospitals: As you may recall, Congress included a provision in the Consolidated Appropriations Act (enacted in December 2020) that would allow critical access hospitals and small rural hospitals (those with less to than 50 beds) to convert to Rural Emergency Hospitals (REHs) starting on January 1, 2023. REHs, once established, will not provide any inpatient services, but must be able to provide emergency services 24 hours a day, 7 days a week. Further, they must meet other requirements including, but not limited to: having a transfer agreement in place with a level I or level II trauma center; adhering to quality measurement reporting requirements that will be set by CMS; and following new conditions of participation (COPs) that are developed by CMS.

    CMS is expected to establish all the REH requirements in the OPPS reg and create new COPs for REHs in a separate reg. Both proposed regs will be released this summer and finalized by early November. On May 19, ACEP had an opportunity to meet with officials from the Office of Management and Budget (OMB) and other offices within the White House to discuss the upcoming REH COP reg. By meeting with OMB and other White House officials at this point during the regulatory process, ACEP had an opportunity to potentially influence the COPs before they become public.

    During our meeting, ACEP reiterated key points from a response that we previously submitted to a request for information on REHs last year. We specifically emphasized the need for all services delivered in REHs to be supervised by emergency physicians either in-person or virtually via telehealth. Further, we discussed some important factors for federal officials to consider when developing standards and protocols around EMS and ambulance services and transfers. Finally, we talked about the different types of services that should be provided in REHs, including maternal services, observation services, behavioral health services (including treating patients with opioid use disorder), and what requirements the COPs should include to ensure that these services are safely and effectively delivered.

We sincerely hope that CMS will incorporate some of our input into the REH regs!

I know that is a lot to digest, so please let me know if you have any questions. As the heat of the summer rolls in, you’ll definitely know where to find me!

Until next week, this is Jeffrey saying, enjoy reading regs with your eggs.

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