CMS proposes payment cuts in physician fee schedule, and docs are crying foul

The Biden administration has released the proposed physician fee schedule for 2024, and a 3.34% decrease in the conversion factor is likely to draw plenty of ire from docs.

The agency said in a press release that under the proposed rule, payments overall would decrease by 1.25% compared to 2023. However, the Centers for Medicare & Medicaid Services (CMS) set the conversion factor at $32.75, down $1.14 or 3.34% from last year.

Under the physician fee schedule, the conversion factor is the number of dollars assigned to the relative value unit, a key element in how CMS calculates payouts for physicians in Medicare.

In the release, CMS said that while it is decreasing overall payments and adjusting the conversion factor, it is proposing pay hikes for primary care and other services. These increases require cuts elsewhere to achieve budget neutrality, CMS said.

Provider groups were already expressing concern about the changes within an hour of the rule's release. In a statement, the Medical Group Management Association (MGMA) called on Congress to take another look at existing law to ensure that providers are compensated fairly.

"Medicare already largely fails to cover the cost of furnishing care to beneficiaries, and the proposed cut to the 2024 conversion factor compounds the problem," Anders Gilberg, senior vice president of government affairs at the MGMA, said in the statement. "Congress must reexamine existing law to provide an annual physician payment update commensurate with inflation and do away with Medicare’s ‘robbing Peter to pay Paul’ budget neutrality requirements to provide much-needed financial stability for medical practices.”

In addition to the payment cuts, which are likely to garner the bulk of the controversy, CMS has proposed establishing new payment codes for services that would meet the needs of underserved populations. The agency pitched paying for caregiver training under certain circumstances, which would ensure physicians are compensated for assisting caregivers.

The agency is also proposing new payments for community health workers as well as for navigation services for cancer patients, which aligns with the Biden administration's Cancer Moonshot initiative.

CMS is also painting the rule as containing "the most important changes to improve access to behavioral health in Medicare in the program’s history," according to the release. In the proposal, CMS would allow marriage and family counselors as well as mental health counselors, including addiction counselors, to bill Medicare for their services for the first time.

The rule would increase payouts for crisis care, substance abuse therapy and psychotherapy.

“CMS continues to demonstrate commitment to advancing health equity and building a stronger Medicare program,” said Meena Seshamani, M.D., Ph.D., CMS deputy administrator and director of the Center for Medicare, in the release.

The proposal includes updates to the Medicare Shared Savings Program as well, which are designed to align more effectively with CMS' broader value-based care agenda. The National Association of ACOs (NAACOS) said in a statement that the updates reflect CMS' commitment to accountable care.

"It addresses several issues that NAACOS has been advocating for, including improvements in quality reporting, more fair benchmarking policies, a smooth transition to a new risk adjustment model, keeping advanced payments for new ACOs who transition to risk, helping ACOs who serve high-cost beneficiaries and others," Clif Gaus, CEO of NAACOS, said in the statement.

"NAACOS thanks CMS for its continued leadership on this issue and its willingness to address the barriers standing in the way of clinicians and health systems who want to provide higher quality, more cost-effective, coordinated care for patients," he said.