Hospital, physician groups push back on CMS payment rules as COVID-19 assistance dwindles

Several provider groups are slamming recent payment rules offering small price hikes for 2023, as COVID-19 relief in place for more than two years erodes.

Groups are clamoring for regulators to boost payments in the proposed 2023 Physician Fee Schedule and Outpatient Prospective Payment System (OPPS) rules. Providers say that added pressures of labor shortages, inflation and renewed surges of COVID-19 could cause further strain on system and practice finances. 

The American Hospital Association slammed the OPPS proposed rule that gives a 2.7% hike to Medicare payments for outpatient services next year. 

“While we have made great progress in the fight against this virus, our members continue to face a range of challenges that threaten their ability to continue caring for patients and providing essential services for their communities,” said Stacey Hughes, executive vice president of the AHA. “A much higher update is warranted.”

The call for a greater payment boost comes as providers are experiencing the resumption of a 2% cut to Medicare payments under sequestration. Congress has put the cuts on hold for more than two years to help providers handle the massive revenue shortfalls caused by the pandemic.

Lawmakers phased in the cuts this year, with a 1% cut resuming in April and the full 2% cut going back into effect last month.

The Physician Fee Schedule released last week caused similar pushback from several physician groups. 
CMS proposed a 2023 Medicare conversion factor of $33.08 for each relative unit that determines Medicare payments to doctors, a slight decline from the $34.61 for 2022. 

The agency is required to be budget neutral in the fee schedule so any payment bumps will have to come from cuts elsewhere in the rule.

However, Congress installed a 3% pay bump to the fee schedule at the onset of the pandemic to help doctor offices that shuttered and saw major drops in volume in 2020. The pay bump expired starting this year.

Physician groups say the slight decline is going to cause a major problem for practices. They are also worried about a potential 4% cut that could go into effect next year due to the PAYGO law, which 

“Providers are facing significant cuts in Medicare payments, along with staffing shortages and inflationary pressures that are hiking expenses to levels not seen in years,” said Jerry Penso, president and CEO of the AMGA, which represents medical groups. “At some point, this combination of hits to the system will impact care. There’s no way around it.”

The Community Oncology Alliance, which represents independent oncology practices, called out dramatic cuts to “medical oncology, diagnostic imaging and radiation treatment,” said Executive Director Ted Okon.

“This is a slap in the face to independent physician practices and clearly communicates that policymakers do not value the services they provide,” Okon added.

Congress so far has been unwilling to issue a new moratorium on the sequester cuts or the 3% payment bump to physicians. 

A $10 billion package that primarily had money for vaccines and treatments has been mired in the Senate due to bickering over votes on amendments. While the Senate is hammering out a new spending package, it appears to likely focus on specific healthcare policies such as giving Medicare drug price negotiation power and extending enhanced Affordable Care Act Subsidies.