Citing COVID-19, providers push back on CMS payment rule rate cuts, telehealth rollback in 2021

Providers are fiercely opposing changes in two CMS payment rules for 2021, decrying physician rate cuts amid the COVID-19 pandemic, pushing for more telehealth flexibility and urging a stop to a controversial plan to eliminate the list of procedures that can be done on an inpatient-only basis.

CMS released its annual proposals for the Physician Fee Schedule and Outpatient Prospective Payment System in August and official comments were due Monday. In their comments, doctor and hospital groups largely focused on what they think is needed — and what should be avoided — as the nation continues to battle the novel coronavirus, which could bring new challenges this winter.

Doctor pay, 340B drugs

One of CMS’ proposals is to lower the conversion factor used to calculate payment rates. The American Medical Association said that would result in a 5.5% cut to physician payment, “in the face of the pandemic that has resulted in physician practices experiencing severe reductions in revenue.”

Primary care practices in particular have struggled financially through the pandemic amid stay-at-home orders and patient wariness of in-person care. CMS has been criticized for sending federal relief funds primarily to larger hospitals, and physician practices have asked Congress to approve more financial aid. Lawmakers, however, seem gridlocked ahead of next month’s election.

The result of the PFS change would cause payments for physical therapy, anesthesiology, nurse anesthetists and emergency medicine to fall 9%, 8%, 11% and 6%, respectively.

Surgeons would be particularly hard hit. If the proposed fee schedule is finalized, Medicare reimbursement would be cut by 9% for cardiac surgery, 8% for thoracic surgery, 6% for ophthalmology and 7% for vascular surgery, general surgery and neurosurgery.

Rates for nurse practitioners and general practice would both rise 8% and family practice would rise 13%, benefiting primary care clinics.

The proposed rule would also simplify billing and coding requirements for office and outpatient visits and up payments for a variety of bundled payments, including for maternity care.

AMA urged CMS to avert the cuts in comments. The group was joined in its opposition by the American Association of Orthopaedic Surgeons, which said the change would cause significant cuts to physician payment for most surgical services delivered to Medicare patients.

“These include CMS’ failure to incorporate adjustments for outpatient and office visit evaluation and management codes to global surgical codes, as well as its proposal to decrease the conversion factor by 11%,” AAOS said. 

The proposed rule also retains a nearly 30% cut to payment of certain drugs for hospitals in the 340B drug discount program, which primarily serve low-income populations. Participating facilities get the drugs at a deep discount and thus could be incentivized to overuse them, CMS has argued in the past.

The American Hospital Association sued HHS over the reduction in the 2019 OPPS, though it was upheld by the U.S. Court of Appeals for the District of Columbia in July. 

Chief Judge Sri Srinivasan said the department did indeed have the authority to make the reduction, “so as to avoid reimbursing those hospitals at much higher levels than their actual costs to acquire the drugs.”

AHA appealed, and again in its comments on the 2021 rate reduction proposal said it “does not believe HHS has the legal authority to punitively target 340B hospitals in this manner.”

The hospital group said the proposal is estimated to take an additional $427 million from 340B hospitals and “builds on flawed policy that has already resulted in devastating losses to 340B hospitals and their patients.”

Group purchasing organization Premier also said it also opposes the change that would further reduce the payment for drugs purchased under the 340B program to average sales price minus 28.7%

Audio-only telehealth

The rapid rise of telehealth and its necessity amid stay-at-home orders spurred the agency to temporarily reimburse a variety of virtual care services. Under its 2021 PFS rule, about two dozen new telehealth codes would be made permanent

A notable exception, however, is continuing payments for audio-only telehealth visits for Medicare beneficiaries, an estimated 40% of which don’t have access to a computer with internet. 

Key industry groups have pushed back on that change, including the AHA, which said in a letter to HHS that audio-only telehealth services are essential for many rural patients lacking broadband internet access.

AMA, along with the Medical Group Management Association and American Medical Group Association, which represent physician practices, also urged CMS in comments to expand audio-only telehealth services with adequate reimbursement. 

America’s Physician Group said the same, adding it wants CMS to extend eligibility for risk adjustment payment for telehealth services conducted solely through audio-only technology.

Telehealth usage has skyrocketed in 2020, including among Medicare members. About 1.3 million Medicare members received some sort of virtual service in the week ended April 18, a stunning increase from about a month prior when just 11,000 members received virtual services in the week ended March 7.

The key question for the industry has been what regulators and lawmakers will allow to continue after the public health emergency draws to a close. Most agree it will be hard to reverse course now that so many consumers are taking advantage of increased access to virtual care.

Nixing inpatient-only

A major adjustment to next year’s OPPS rule includes eliminating the list of services that can be done on an inpatient-only basis for Medicare patients over the next three years, beginning by removing about 300 musculoskeletal-related services. 

Provider lobbies were strongly opposed.

“Given the depth and breadth of the more than 1,700 procedures on the IPO list, it would be premature and myopic to adopt such a policy,” AHA said.

In the past, CMS removed services from the list to make them available on an outpatient basis, which it said would help lower costs. Last year’s rules removed hip replacements, six spinal procedure codes and five anesthesia codes from the inpatient-only list.

Those procedures are increasingly taking place at ambulatory surgery centers, taking business away from acute care hospitals.

AHA is urging CMS to retain the list, which it said is designed to protect beneficiaries going into high-risk surgical procedures that may require days of recovery and rehabilitation in an inpatient setting.

The hospital lobby said there are some procedures on the list that “may never be appropriate to furnish in an outpatient setting and certainly should not be removed from the list within the next three years,” including heart and lung transplants, coronary artery bypasses and mastectomies. 

Surgeon group AAOS is also against eliminating the list, and called it a “drastic proposal” that would cause safety concerns and potential care access issues for patients, while increasing out-of-pocket costs.

Premier commented that CMS should be cautious with modifications to the IPO list and ambulatory surgical center Covered Procedures List — recommending it take proactive steps to mitigate effects of the changes, particularly for alternative payment models.

Some groups do support the eventual elimination of the inpatient-only list, but warned CMS to proceed more carefully. 

Officials with the Duke University Health System, for example, suggested a five-year period with staged removals to “provide hospitals the opportunity to develop artificial decision logic to aid physicians in the selection of inpatient vs outpatient designations, as well as make the appropriate site of service determinations.”

The Medicare Payment Advisory Commission, which advises Congress on Medicare policy, suggested CMS start with eliminating musculoskeletal services from the list and then monitor the share of cases moving to an outpatient setting and the effect it has on patient outcomes before making further substantial changes.

Medicare ACO program

CMS also wants to modify how quality is benchmarked by changing how shared savings and shared losses are determined. It proposed a new scoring methodology for ACOs beginning in 2021 under “extreme and uncontrollable” circumstances, to try to cushion the value-based providers from unforeseen circumstances, like a pandemic.

Physician association APG said, while it endorses the methodology change, the “one size fits all approach” creates a burden due to the public health emergency. It wants CMS to maintain the current MSSP APM Scoring Standard and not implement the proposed APM Performance Pathway until 2022, according to its comments. 

AMGA also wants the agency to delay those proposed changes. It’s concerned about the extent to which CMS is reducing the MSSP quality measure set, and said agency should instead implement a mix of outcomes and process measures that align across various programs.

“CMS should not apply the quality performance standard to shared savings the way it is proposed,” AMGA wrote. “ACOs should not be ineligible to share in savings if they do not meet the more stringent quality performance standard.”

CMS Administrator Seema Verma touted MSSP in a September Health Affairs blog post, saying it saved the agency $1.19 billion in 2019.

But those ACOs, whose payments are tied to spending and patient health benchmarks, are still struggling amid the pandemic. Nine organizations, including NAACOS and AMA, asked CMS to shelter them from financial losses in exchange for lower shared savings as well as pushing back some key deadlines in a May letter to the agency. 

They asked CMS to give them the option of protection from any financial losses for a reduced shared savings rate no lower than 40%.