Five Key Proposals from 2024 Medicare Physician Fee Schedule

On September 11, 2023, STS submitted a 23-page letter (detailing our reaction to the calendar year (CY) 2024 Medicare Physician Fee Schedule Proposed Rule. Below are the top five proposals affecting cardiothoracic surgery.  

1. Payment Cuts

The Centers for Medicare and Medicaid Services (CMS) proposed severe cuts to cardiothoracic surgery reimbursement. According to CMS, cardiothoracic surgeons will see a 3% reduction in 2024. CMS estimated the CY 2024 conversion factor (CF) to be $32.7476. STS is profoundly disappointed that the proposed rule continues the longstanding trend of systematically devaluing Medicare reimbursements. In addition to facing negative conversion factor adjustments each year triggered by budget neutrality requirements, physicians face ongoing sequestration reductions, the threat of PAYGO, the loss of alternative payment model (APM) bonus payments, up to 9% penalties as part of the Quality Payment Program (QPP), and more. 

Averting these cuts is a top priority for STS and will be a focus of the upcoming Advocacy Conference in Washington, DC.  Additionally, STS is lobbying Congress to pass H.R. 2474, the Strengthening Medicare for Patients and Providers Act, which would ensure continued access to care for Medicare beneficiaries by providing an annual inflation-based update for Medicare physician reimbursements.

2. Implementation of Flawed Complexity Code

CMS is once again proposing to implement payment of the flawed G2211 add-on code for evaluation and management (E/M) office visits, which was previously delayed by Congress through legislation. These visits are defined as a “visit complexity inherent to evaluation and management associated with medical care services that serve as the continuing focal point for all needed health care services and/or with medical care services that are part of ongoing care related to a patient's single, serious condition or a complex condition.”

STS reiterated its position that CMS should not implement G2211 for the following reasons:

• There is no longer a valid justification for G2211 because under the new office or outpatient E/M coding structure, physicians, and qualified healthcare professionals (QHPs) have the flexibility to bill a higher-level E/M code to account for increased medical decision-making or total time of the encounter.
• Numerous reportable and resource-based validated codes are available for documenting work and time across various complexity levels and continuing care, making G2211 duplicative of work already represented by existing codes.
•  If implemented, this code will inappropriately result in overpayments to those using it while at the same time penalizing all physicians due to a reduction in the Medicare conversion factor that will be required to maintain budget neutrality under the fee schedule.
• Implementing G2211 is expected to introduce disruptions to the RVUs of E/M services under the fee schedule.

3.    Adoption of Problematic Formula Delayed 

In response to concerns expressed by STS and other stakeholders, CMS has proposed to not update its methodology for calculating the Medicare Economic Index (MEI), which tracks the cost inputs for various physician services. In last year’s Final Rule, CMS revised the MEI in a way that would have favored practice expenses over physician work, resulting in unjustified cuts to cardiothoracic surgery. CMS indicated that a delay was warranted given the impact of the changes in methodology combined with the forthcoming AMA practice expense survey results, which are expected soon. CMS will continue to monitor other data sources and will propose any necessary changes to the MEI in future rulemaking. 

4. Retention of Telehealth Services

CMS retained the Category 3 codes on the Medicare telehealth list and continued coverage and payment of certain audio-only telehealth services until the end of 2024. STS appreciated CMS’ extension of the telehealth flexibilities implemented during the COVID-19 PHE. Further, we encouraged CMS to retain telehealth flexibilities beyond 2024. The PHE illustrated how valuable a tool telehealth can be in increasing access to healthcare for all, including those in rural or underserved communities. Data collected during COVID-19 demonstrates the positive impact telehealth has had on both patient clinical outcomes and patient experiences.

5. Discontinuing APM Incentive Payment

As required by law, beginning with the 2024 performance period that will impact 2026 payments, the Alternative Payment Model (APM) incentive payment will end. Instead, going forward there will be two separate fee schedule conversion factors, one for items and services furnished by qualifying APM participants that will receive a 0.75% annual update, and the other for other items and services furnished outside of an APM that will receive a 0.25% annual update. Both conversion factor updates will not be payable until CY 2026 and are insufficient to account for rising practice costs.

STS strongly believes that if CMS’ goal is to encourage providers to prioritize value-based care by participating in APMs instead of the traditional MIPS program, then the agency needs to work with Congress to reauthorize the APM Incentive Payment at its original 5% level. A higher Medicare physician fee schedule conversion factor will not adequately make up for the loss of the 5% bonus payment. Additionally, specialty specific APMs need to be tested and approved so specialists can more rapidly shift to value-based payment arrangements.