Comments on PFS Proposed Rule: In July 2021, the Centers for Medicare & Medicaid Services (CMS) issued this proposed rule. As noted in the previous newsletter, the conversion factor would be reduced from the current 34.8931 (which reflects action taken by Congress in December 2020) to 33.5848, a reduction of 1.3083. According to CMS, this would result in a 1% increase for orthopaedic surgery (due to an increase in PE RVUs), but a 1% reduction for physical therapy and occupational therapy (due to a decrease in Work RVUs). This reduction in the conversion factor is not the only reduction, however. There will also be a sequestration cut of 2% under the Budget Control Act of 2011, and a sequestration cut of 4% under the Statutory Pay-As-You-Go Act of 2010.

The proposed rule would also continue through the end of 2023 many of the Medicare telehealth flexibilities allowed during the Covid-19 public health emergency (PHE), even if the PHE ends well before then.

The Advocacy Committee, which works closely with the American Association of Orthopaedic Surgeons (AAOS), received a request from AAOS to study its comment letter and consider signing on to it. The topics addressed by the AAOS letter included the conversion factor; telehealth; appropriate use criteria (relating to a process for determining when the use of advanced diagnostic imaging is appropriate); billing for split/shared E/M services furnished in facility settings; an update to the global billing codes; and several other topics.

The Advocacy Committee signed on to the AAOS letter, agreeing that it is critical for CMS to maintain the current PFS funding levels in order to preserve the access of patients to care during the COVID-19 public health emergency; that the proposals for continuing the telehealth flexibilities are helpful; that CMS should indefinitely delay the implementation of the appropriate use criteria (AUC) for advanced diagnostic imaging; that CMS should not revise the guidelines for split/shared E/M services, as doing so will create confusion among providers; and that CMS should apply the E/M value increases from calendar year 2021 to the global codes, as it is inappropriate for the agency not to apply the RUC-recommended changes to the global codes.

Potential Legislation: As to addressing the PFS cuts, the Advocacy Committee believes that ultimately this will be a matter for Congress, as the Medicare statute specifies that the update to the conversion factor for calendar year 2022 must be 0.0 percent and the sequestration cuts are also statutory matters. In September, both the Chair of the House Energy & Commerce Committee, Rep. Frank Pallone (D-NJ), and the Chair of the House Ways & Means Committee, Rep. Richard Neal (D-MA), made public statements that they would work with members of the Doctors Caucus to address the problem. Pallone noted that he would like to find a bipartisan solution.

Conversations with staff for Congress indicate that legislative provisions to address the PFS cuts will not be included in the large infrastructure and health bills moving through Congress in October. This is concerning because reductions to the PFS cuts likely will require legislative provisions to create savings to pay for those reductions, and most of the available savings provisions are being used in those infrastructure and health bills. This sets up a difficult end-of-year battle to enact reductions to the PFS cuts. Congressional staff note that there is a good chance the 4% sequestration cut under the Statutory Pay-As-You-Go Act of 2010 will be waived, but it is a much more uncertain situation as to the other cuts.

On October 14, more than 245 Members of Congress sent a bipartisan letter to the House leadership stating that the looming Medicare physician payment cuts “will strain patient access to care”. The letter continued, “We write to bring your attention to the growing financial uncertainty within the Medicare payment system and to express our support for congressional action to address upcoming payment cuts to physicians, therapists, and health care professionals before the end of the year.” Specifically, the letter supports extending the current 3.75% increase through 2022. The effort on the letter was led by Representatives Ami Bera (D-CA) and Larry Bucshon (R-IN), both of whom are physicians.

As to the telehealth flexibilities administratively created by CMS, continuing the flexibilities for physical therapists and occupational therapists after the end of the PHE is also a matter for Congress, as CMS does not have the statutory authority to take such action. Conversations with staff for Congress indicate that legislative provisions to make the telehealth flexibilities permanent, including for PTs and OTs, will not be included in the large infrastructure and health bills referred to above. Congress apparently does not consider telehealth legislation to be an urgent matter, given the other issues it is facing this year.

The previous newsletter noted the support of the Advocacy Committee for a bipartisan bill that was introduced in the House of Representatives on May 13, 2021, to require Medicare Advantage plans to electronically issue real-time prior-authorization decisions. This requirement would take effect with the second plan year beginning after the bill’s enactment. The bill is H.R. 3173, the Improving Seniors’ Timely Access to Care Act of 2021, which was introduced by Representatives Suzan DelBene (D-WA) and Mike Kelly (R-PA). As of the previous newsletter, the bill had 151 cosponsors. Now it has 227, of which 129 are Democrats and 98 are Republicans. The bill picked up 21 cosponsors in August, 14 in September, and 14 on October 8. These latest additions mean that the bill now has more than the number of supporters necessary to pass the bill in the House (218). The bill’s cosponsors include senior Democrats and Republicans on the two committees of jurisdiction, House Energy & Commerce and House Ways & Means.

GENERALLY:  The second interim final rule to implement the No Surprises Act was submitted for publication on September 30, 2021, and was published in the Federal Register on October 7. It includes provisions on the “independent dispute resolution” (IDR) process (including arbitration) that are not favorable to physicians. Although it is a final rule, comments will be accepted and are due on December 6. This final rule (like the first one) was issued jointly by the Department of Health and Human Services (HHS), the Labor Department, and the Treasury Department.

Below is a summary of the Act followed by a discussion of the new regulations on the IDR process. (As to other aspects of the new regulations, the Advocacy Committee has received requests for more information on the requirements that will apply to providers and facilities as of January 1. The Committee intends to prepare a document explaining some of these requirements, including those concerning good faith estimates. The document should be posted on the OrthoForum Internet site by the end of November.)

SUMMARY OF ACT: As noted in the previous newsletter, the No Surprises Act was enacted in December 2020 and will take effect on January 1, 2022. Patients will generally pay the same for out-of-network emergency care as they do for in-network emergency care (i.e., balance billing will be banned) if their health plans cover in-network emergency care. The amount paid to an out-of-network emergency provider can be the subject of the IDR process (although that process will not be available in any State in which there is a State law that governs the amount of payments to out-of-network providers, or in any State that is participating in the CMMI All-Payer Model). The Act applies both to emergency departments that are physically part of a hospital and emergency departments that are not (i.e., are “independent freestanding” emergency departments). In addition, the Act applies to non-emergency care a patient receives at an in-network facility that, unknown to the patient, includes care from a person who is a nonparticipating provider.

IDR PROCESS: A central concept in the IDR process is the “qualifying payment amount” (QPA), which (for a particular item or service) is the median in-network contracted rate in the geographic area involved for the applicable insurance market (large group market, small group market, or individual market) as adjusted for inflation occurring after January 31, 2019.

The Act specifies that the QPA is one of the factors to be considered in the IDR process. (It is also part of the methodology for determining the amount of the patient’s cost-sharing payment.) There has been a difference of opinion among Members of Congress and among stakeholders as to the weight that should be given to the QPA as compared to other factors specified in the Act. There are five other factors, which are (1) the level of training, experience, and quality and outcomes measurements of the provider or facility; (2) the market share held by the provider or facility or that of the plan or issuer in the geographic region involved; (3) the acuity of the participant, beneficiary, or enrollee receiving the qualified IDR item or service, or the complexity of furnishing the qualified IDR item or service; (4) the teaching status, case mix, and scope of services of the facility that furnished the qualified IDR item or service, if applicable; and (5) the demonstration of good faith efforts (or lack thereof) made by the provider or facility or the plan or issuer to enter into network agreements with each other, and, if applicable, contracted rates between the provider or facility, as applicable, and the plan or issuer, as applicable, during the previous 4 plan years.

The final rule takes a controversial position. Specifically, the preamble of the final rule (the explanatory statement preceding the text of the new regulations) provides that the QPA benefits from a “presumption” that it should be the payment amount:

In making a determination of which payment offer to select, these interim final rules specify that the certified IDR entity must begin with the presumption that the QPA is the appropriate out-of-network rate for the qualified IDR item or service under consideration. [Emphasis added.]

* * *

This presumption that the QPA is the appropriate out-of-network rate can be rebutted by presentation of credible information about additional circumstances [i.e., the five factors noted above] . . .

The statutory text of the No Surprises Act does not include the concept of a “presumption” that the QPA must be used. Moreover, even though the preamble refers to this “presumption”, the actual text of the new regulations does not. The actual regulations text does, however, include “closest to” and “materially different” standards that are not mentioned in the statutory text:

The certified IDR entity must select the offer closest to the qualifying payment amount unless the certified IDR entity determines that credible information submitted by either party . . . clearly demonstrates that the qualifying payment amount is materially different from the appropriate out-of-network rate, or if the offers are equally distant from the qualifying payment amount but in opposing directions. [Emphasis added.]

An important question about these IDR regulations is whether physician groups (or hospital groups) will sue the federal government on the basis that the regulations create standards that are not in the statutory text and that favor the use of the QPA without giving sufficient weight to the five other factors specified in the statutory text.

On October 4, the Chair of the House Ways & Means Committee, Rep. Richard Neal (D-MA), and the Committee’s Ranking Member, Rep. Kevin Brady (R-TX), jointly sent a letter to the Biden administration stating that the approach taken in the final rule “strays from the No Surprises Act in favor of an approach that Congress did not enact in the final law . . . and we are concerned that this approach biases the IDR entity toward one factor (a median rate) as opposed to evaluating all factors equally as Congress intended.” [Emphasis in original.]

Additional Information

For more information on any of the topics discussed in this section, please contact the chair of the OrthoForum Advocacy Committee, Dr. Richard Bruch, at rich.bruch@gmail.com.

Proposed Rule on Physician Fee Schedule

Reimbursement Cuts: In July 2021, the Centers for Medicare & Medicaid Services (CMS) issued this proposed rule. As noted in the previous newsletter, the conversion factor would be reduced from the current 34.8931 (which reflects action taken by Congress in December 2020) to 33.5848, a reduction of 1.3083. Although CMS estimates that this would result in a 1% reimbursement cut for physical therapy and occupational therapy, the effect of this reduction in combination with RVU changes for particular therapy codes has been estimated by some experts in the field to be a total reduction of 3.5% for physical therapists (PTs) and 3.9% for occupational therapists (OTs). In addition, there will be a sequestration cut of 2% under the Budget Control Act of 2011, and a sequestration cut of 4% under the Statutory Pay-As-You-Go Act of 2010.

New Cuts regarding Therapy Assistants:  An issue under the proposed rule that is of particular concern is the 15% reduction in reimbursement that will apply in some situations in which a physical therapy assistant (PTA) or occupational therapy assistant (OTA) provides services. A law enacted in 2018, which takes effect on January 1, 2022, states that the 15% reduction is required when therapy services are “furnished in whole or in part” by a therapy assistant.

In preparing to implement this law, CMS began formulating its policies as part of the 2019 PFS proposed rule. It proposed that “any minute” of PTA or OTA service would trigger the reduction, but the agency did not finalize that proposal. Instead, it finalized what it called the “de minimis” standard, meaning that the reduction would apply only if more than 10 percent of the service is furnished by a PTA or OTA. When the reduction applies, it is billed with the CQ modifier in the case of a PTA and the CO modifier in the case of an OTA. The 2020 PFS final rule applied the reduction both to untimed and timed therapy codes. The untimed codes are evaluation and reevaluation codes, group therapy and supervised modalities. The timed codes are defined in 15-minute increments. In the 2022 proposed rule, CMS focuses on the “8-minute rule”, which is the point at which more than half of the 15 minutes is used. The proposed rule contains a number of examples to demonstrate when the 15% reduction applies (and therefore the CQ and CO modifiers must be used in billing).

A bipartisan bill was introduced in the House on October 8 that would delay the 15% reduction until January 1, 2023, and would permanently exempt from the reduction PTA and OTA services provided in rural areas or medically underserved areas. The bill is H.R. 5536, introduced by Representatives Bobby Rush (D-IL) and Jason Smith (R-MO).

Several bipartisan bills have been introduced in Congress to make permanent the telehealth flexibilities CMS created during the public health emergency. As previously noted, these include a bill supported by the Advocacy Committee, the Telehealth Modernization Act (H.R. 1332; S. 368), which would authorize (but not require) CMS to expand the list of telehealth providers to include any health care professional who is eligible to bill Medicare. This presumably would include PTs and OTs once a physician has certified the plan of care, but it would not include their assistants. The bill would eliminate telehealth geographic limitations, as well as restrictions on the types of sites at which the patient may receive telehealth services, including allowing the patient’s home to be a site of service. In the House, the bill had 65 cosponsors as of the previous newsletter, but now has 93 (42 Democrats and 51 Republicans). In the Senate, the bill had 13 cosponsors and that number has not increased.

Despite the bipartisan support for telehealth bills, conversations with staff for Congress indicate that telehealth legislation may not be considered by Congress this year. Telehealth issues thus far are not addressed in the large infrastructure and health bills moving through Congress in October. The Congressional Budget Office (CBO) has informally indicated that making the telehealth flexibilities permanent would significantly increase federal spending. CBO apparently believes that telehealth visits will be in addition to in-person visits rather than in lieu of them. This informal CBO “score” is a barrier to telehealth legislation moving forward.

Given these difficulties, and also the CMS decision to extend most telehealth flexibilities through the end of 2023, Congress apparently is choosing to wait until 2022, if not 2023, to address telehealth issues. There does not appear to be any sense of urgency, particularly since Congress is struggling to make progress on the current large infrastructure and health bills, as well as struggling to avoid a default on the government’s financial obligations (which would happen if there is failure to enact additional legislation in December to increase or suspend the statutory “debt ceiling”).

Therapy Services Subcommittee

For more information on therapy services issues, or to join the OrthoForum Advocacy Committee Therapy Services Subcommittee, please contact Renee Duncan at: renee.duncan@orthotennessee.com.

OPPS-ASCs Proposed Rule

Generally: In July 2021, the Centers for Medicare & Medicaid Services (CMS) issued this proposed rule. As noted in the previous newsletter, CMS proposed a 2022 conversion factor of $50.043 for ASCs meeting the quality reporting requirements, which is an increase of $1.091 above the 2021 conversion factor of $48.952. This is a 2.3 increase, which reflects a 2.5% increase on the basis of the hospital market basket that was then reduced by a productivity adjustment of 0.2%. For ASCs not meeting the quality reporting requirements, the proposed 2022 conversion factor is $49.064. These 2022 conversion factors for ASCs are about 59% of the parallel conversion factors for hospital outpatient departments ($84.457 if meeting the quality reporting requirements and $82.810 if not).

The Advocacy Committee, which works closely with the American Association of Orthopaedic Surgeons (AAOS), received a request from AAOS to study its comment letter and consider signing on to it. The topics addressed by the AAOS letter included the reinstatement of the inpatient only (IPO) list; recommendations regarding specific musculoskeletal procedures and the IPO list; updates to the two-midnight rule; physician-owned hospitals; prior-authorization requirements in the outpatient setting; and future inclusion of hospital-level, risk standardized patient reported outcomes measure following elective primary THA and/or TKA.

The Advocacy Committee signed on to the AAOS letter, agreeing with the following:

(1) As to removing procedures for 2021 and then reinstating them as of 2022, CMS should not make such wide swings in complicated policy decisions within short time periods, and instead should make changes gradually and in a fully transparent manner. Decisions about the IPO list should be based on peer-reviewed evidence, patient factors (such as age, co-morbidities, and social support), and other factors relevant to positive patient outcomes. (2) The social factors to consider when determining the best setting for musculoskeletal procedures should be “lives alone,” “pain,” “prior hospitalization,” “depression,” “functional status,” “high risk medications,” and “health literacy”. (3) Technical expert panels (e.g., orthopaedic surgeons concerning musculoskeletal procedures) must be formed to advise the HHS Secretary and the agency on such policy changes with wide impact. (4) The out-of-pocket costs to patients in traditional Medicare must be considered.

(1) Certain procedures should be removed from the IPO list, such as CPT code 27702, which concerns the tibia and fibula and the ankle joint, and CPT code 26556, which concerns the hand and fingers. (2) Certain procedures should remain on the IPO list, such as CPT codes 27888 and 28800, which concern amputation, and CPT codes G0414 and G0415, which concern trauma procedures relating to fracture and/or dislocation.

(1) Until there are enough Medicare claims data to show that a particular procedure is more frequently performed in the outpatient setting than in the inpatient setting, CMS should continue in effect the policy adopted for 2021 to allow for indefinite exemption from the site-of-service claim denial, from Beneficiary and Family Centered Care-Quality Improvement Organizations (BFCC-QIO) referrals to Recovery Audit Contractors (RACs), and from RAC reviews for patient status/site-of-service. (2) CMS should provide guidance to respond to widespread denials of payment for inpatient stays, and in particular should provide strong and appropriate oversight of Medicare Advantage plans. (3) Surgeons know their patients the best and it is ineffective and even harmful to have payors or compliance experts decide on the setting of care without full understanding of the individual situation.

CMS deserves applause for its action in the 2021 final rule to lift the prohibition on the expansion of POHs for high Medicaid facilities, as this was a positive step toward providing high quality care by value-driven physicians. CMS and HHS should explore all regulatory options that would allow lifting the arbitrary ban on new and expanding POHs. Considering the ongoing issues brought to the forefront as a result of the COVID-19 pandemic, the value of POHs has never been as evident. They contribute to local economies, meet a growing demand for health care services, and can shift focus and address frontline issues without the administrative red tape that cripples larger hospital systems.

CMS should take action to reduce the extent to which prior authorization is required because the continued use of these requirements will supersede physician autonomy, increase administrative burden, and negatively impact patient care. Requiring prior approval from a third-party removed from clinical decision-making erodes the doctor-patient relationship, and the ability to make decisions that are in the best interest of the patient.

(1) CMS is considering future inclusion of Hospital-Level, Risk Standardized Patient Reported Outcomes Measure Following Elective Primary Total Hip and/or Total Knee Arthroplasty (NQF #3559) to the Hospital IQR and OQR Programs and is seeking stakeholder feedback on numerous aspects of implementation. (2) Most significant for orthopaedic surgeons is the idea of expanding the measure to non-inpatient settings, which is an important consideration given the recent removal of TKA and THA procedures from the Inpatient Only List in the CY 2018 and CY 2020 OPPS/ASC final rules, respectively. (3) Generally speaking, CMS should proceed with NQF #3559. Orthopaedic surgeons are included in the Technical Expert Panel and Expert Clinical Consultants behind the development of this measure, and the measure incorporates several standards based on outcomes that matter most to patients.