As noted in the previous newsletter, the PFS proposed rule (published on July 29, 2022) would set the 2023 conversion factor at $33.0775, a reduction of $1.5287 from the 2022 conversion factor of $34.6062 (a 4.42 percent reduction). Also taking into account the additional “paygo” cuts under deficit reduction laws, it has become clear that the current PFS system established in 2015 by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is unsustainable.

Another issue of concern is that, as explained below, the proposed rule indicated the intent of the Centers for Medicare & Medicaid Services (CMS) to implement unfavorable changes concerning Medicare reimbursement for split/shared evaluation and management (E/M) services in the facility setting.

With respect to the Covid-19 public health emergency (PHE), CMS proposed to continue through the end of 2023 many of the Medicare telehealth flexibilities allowed during the PHE, even if the PHE ends well before then. The Therapy Services section of the newsletter discusses these telehealth flexibilities for physical therapists (PTs) and occupational therapists (OT), as well as the response of the OrthoForum to the request made by the proposed rule for comments on the “direct supervision” requirement for PTs and OTs.

In September, the OrthoForum submitted a comment letter on the PFS proposed rule that addressed these issues (as described below), and that also responded to the request of CMS for public comments on “strategies to improve the accuracy of payment for the global surgical packages”.

OrthoForum Comment Letter on PFS Proposed Rule

The OrthoForum submitted its PFS comment letter to CMS on September 6, 2022.

Payment Reductions: Regarding the cuts to the conversion factor proposed for 2023, the letter included the following statements:

The OrthoForum agrees with the American Association of Orthopaedic Surgeons, the American Medical Association, and other medical organizations that this reduction together with ones for prior years is creating an unsustainable payment situation for physicians, particularly given the high rate of inflation and the continuing effects of the Covid-19 pandemic. This situation in turn threatens the access of patients to physicians through the Medicare program.

Reform of the statutory provisions governing the Medicare physician payment system is necessary to create a sustainable system. The OrthoForum urges CMS to work with Congress and stakeholders toward this goal.

Split/Shared E/M Services: Beginning with 2024, when both a physician and a non-physician practitioner (NPP) provide services to a patient for an E/M visit in the facility setting (not the office setting), CMS will require that the person who provides the “substantive portion” of the services bill for the visit and that reimbursement be based on the rate applicable to that person (physician or NPP, as the case may be). The rule is that time, and not medical decision making (MDM) or other factors, is the determinative factor; therefore, whoever provides more than 50 percent of the total time for the visit is providing the “substantive portion”.

The OrthoForum comment letter noted that, for 2023, CMS is not implementing these changes on split/shared E/M services. For 2023 (as for 2022), the agency is providing options on how to determine the “substantive portion” (except that the options are not applicable to critical care visits). Specifically, the substantive portion can be determined (1) by time (more than 50 percent of the visit), or (2) by performing the history, or (3) by performing the examination, or (4) by performing the medical decision making (MDM).

The OrthoForum letter supported the use of this approach for 2023 and further urged CMS to permanently adopt it, noting that it is a flexible approach as compared to the changes the agency plans to implement in 2024. The letter also stated that, alternatively, CMS could return to the approach in effect for 2021 (the traditional approach).

Therapy Services: The provisions of the OrthoForum comment letter that concerned PTs and OTs are described in the Therapy Services section of the newsletter.

E/M Component of Global Surgical Package: The proposed rule requested public comments on “strategies to improve the accuracy of payment for the global surgical packages”. This is an important issue and therefore the OrthoForum comment letter addressed it (as did the comment letter from the American Association of Orthopaedic Surgeons).

The OrthoForum comment letter included the following statements:

Effective for 2021, CMS adopted most of the AMA RUC recommendations for revising the office/outpatient E/ M visit code set (per actions of the AMA’s CPT Editorial Panel). The result of these valuation changes to RVUs has been to increase payments for E/M visits for primary care and certain other specialties.

CMS, however, did not follow the RUC recommendation on RVU changes for E/M visits included in the global surgical package, even though the agency did make the RUC recommended changes for some global codes, such as monthly end-stage renal disease and bundled maternity care. In other words, CMS chose to make RVU changes selectively, which appears to be inconsistent with the requirement under section 1848(c)(6) of the Social Security Act that the agency “may not vary the conversion factor or the number of relative value units for a physicians’ service based on whether the physician furnishing the service is a specialist or based on the type of specialty of the physician.”

The OrthoForum realizes that, going back to 2012, CMS has had concerns that the global surgical package may be overvalued, but there is no definitive proof of that at this point. Regarding those concerns, it should be taken into account that (as noted in the Proposed Rule) Congress took action in 2015 to stop the implementation of certain changes that CMS planned to take regarding that package.

The Proposed Rules notes that, pursuant to that action by Congress, CMS contracted with RAND to analyze data and that the resulting reports support the approach of the agency. If, however, the agency wishes to rely on the RAND reports rather than the RUC findings, it should, in order to be transparent, first release the underlying data and assumptions used by RAND.

In summary, CMS decided to trust the RUC findings with respect to revising E/M primary care codes but not to trust the RUC findings with respect to revising the E/M component of the global surgery package.

Given the statutory “may not vary” requirement and the action by Congress in 2015 noted above, the OrthoForum urges CMS to adopt the RUC recommendations regarding the E/M component of the global surgical package, effective for 2023. The agency can continue to collect data and work with specialty societies to determine whether changes to the package should be made for 2024 or subsequent years.

On September 27, Representatives Ami Bera (D-CA) and Larry Bucshon (R-IN), both of whom are physicians, sent a letter to CMS that made points about the E/M component of the global surgical package that are similar to the OrthoForum comment letter. Specifically, the Bera-Bucshon letter noted the RUC recommendations and stated, “We urge CMS to adjust the E/M component of the global codes in the final CY 2023 Medicare PFS rule to maintain relativity in the fee schedule and ensure compliance with the Medicare statute, so physicians are paid the same for providing equivalent services.”

House Legislation to Address Medicare PFS Cuts

In response to the Medicare reimbursement cut that would be made for 2023 by the PFS proposed rule, a bipartisan bill was introduced on September 13, 2022, to prevent the cut from being implemented by CMS. The bill (H.R. 8800) was introduced by Representatives Ami Bera (D-CA) and Larry Bucshon (R-IN), both of whom are physicians. As of mid-October, the bill had 49 cosponsors, of which 34 are Democrats and 15 are Republicans. It appears that a companion bill has not yet been introduced in the Senate.

This House bill does not include any “payfor”, which is a Capitol Hill term for provisions to offset the increased costs to the federal government that will result from preventing implementation of the cut. It is likely that a payfor must be found in order for the bill to move forward.

Duration of Public Health Emergency; Effects From Its End

Effective October 13, 2022, the Secretary of Health and Human Services, Xavier Becerra, extended the Covid-19 public health emergency (PHE) for an additional 90-day period, using authority under section 319 of the Public Health Service Act. That additional period will be in effect through January 11, 2023. The Biden Administration has stated that it will provide a 60-day notice that the PHE will end. Therefore, if no such notice is provided by mid-November, the assumption will be that the PHE will be renewed on or before January 11, 2023. It is unclear, however, whether HHS will in fact extend the PHE in January, given that President Biden made a public statement on September 16 that “the pandemic is over.”

As noted in the previous newsletter, the end of the PHE will terminate the emergency flexibilities created by CMS regarding the Medicare, Medicaid, and CHIP programs, although a law enacted in March 2022 (Public Law 117-103) extends the Medicare telehealth flexibilities for 151 days beyond the end of the PHE. Millions of people may lose access to emergency health insurance coverage when the PHE ends. Note also that the authority for emergency use authorizations (EUAs) for drugs and devices issued by the Food and Drug Administration is not provided under section 319 of the Public Health Service Act, but rather under section 564 of the Federal Food, Drug, and Cosmetic Act. Separate action by Secretary Becerra under section 564 will be necessary to terminate EUAs.

House Passage of Bill to Address Medicare Advantage Prior-Authorization Requirements

The Advocacy Committee supports a bipartisan bill that was introduced in the House of Representatives on May 13, 2021, to require Medicare Advantage (MA) 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).

The House passed this bill by voice vote on September 14, 2022. As of passage, the bill had 326 cosponsors, of which 191 were Democrats and 135 were Republicans. Earlier that day, the House Energy & Commerce Committee (E&C) approved an amended version of the bill, and it appears that this was the version passed by the House. In considering the bill, E&C Chairman Frank Pallone (D-NJ) noted that E&C had worked closely with the House Ways & Means Committee (W&M) on the text of the bill. W&M had approved a version of the bill on July 27.

A bipartisan Senate bill (S. 3018) has the same text as the introduced House bill. The Senate bill was introduced on October 20, 2021, by Senators Roger Marshall (R-KS), Kyrsten Sinema (D-AZ), John Thune (R-SD), and Sherrod Brown (D-OH). As of mid-October, the Senate bill had 45 cosponsors, of which 23 were Democrats and 22 were Republicans.

In relation to a House E&C hearing on prior-authorizations issues held in June 2022, E&C Chairman Pallone noted that the HHS Office of Inspector General (OIG) reported in April 2022 that MA plans sometimes delayed or denied beneficiaries’ access to medically necessary services such as advanced imaging services, radiation therapy, and stays in post-acute facilities, despite those requests meeting Medicare coverage rules. The memorandum also noted that CMS audits have also highlighted widespread and persistent MA organization performance problems related to denials of care and payment.

New Arbitration Final Rule Under No Surprises Act; New Lawsuit

A revised final rule concerning the arbitration process under the No Surprises Act was published on August 26, 2022. It was issued pursuant to a decision of a federal district court on February 23, 2022 (in the case, Texas Medical Association v. HHS, et al.), which found that the final rule issued in October 2021 went beyond the agency authority provided by the No Surprises Act. The court therefore vacated certain provisions of the final rule.

Specifically, that October 2021 final rule gave priority to the “qualifying payment amount” (QPA) in the independent dispute resolution (IDR) process under the Act to resolve payment disputes between physicians and health plans (i.e., the arbitration process). The QPA 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 court decision issued on February 23, 2022, found that the QPA should not be given more weight than the other factors specified in the No Surprises Act.

On September 22, 2022, the Texas Medical Association again filed a lawsuit against the federal government, this time alleging that the final rule issued in August 2022 also goes beyond the agency authority provided by the No Surprises Act. It appears the Texas Medical Association is alleging that, although the specific language vacated by the court decision in February 2022 has been removed from the August final rule, that final rule still includes provisions that in subtle ways give the QPA priority over the other arbitration factors specified in the No Surprises Act. Specifically, the lawsuit includes the following statements:

[U]nder the Final Rule, the QPA “will be relevant to a payment determination” and must be considered first “in all cases.” . . . But information on the other factors Congress required arbitrators to consider must be disregarded unless it satisfies extrastatutory criteria imposed by the Departments. And not only must the QPA be considered first, it is the lens through which all other information must be viewed. According to the Departments, the QPA “will aid certified IDR entities in their consideration of each of the other statutory factors, as these entities will then be in a position to evaluate whether the ‘additional’ factors present information that may not have already been captured in the calculation of the QPA.”

Priorities Meeting of the OF Advocacy Committee in September

The Advocacy Committee held its annual meeting to set its priorities for the next 12 months. This was an in-person meeting held in Washington, DC, on September 12, with a number of people also participating by video conference. The Committee decided to keep its current four subcommittees, CMS/CMMI; Ambulatory Surgical Centers; Therapy Services; and Cybersecurity. A decision was also made to create a Private Equity Subcommittee. In addition, if the November elections result in Republican control of both the House and Senate, a Physician Owned Hospitals Subcommittee will be created. All of the topics covered by the subcommittees are “Tier 1” priorities of the Advocacy Committee.

Another issue discussed in the priorities meeting was that, on September 8, eight House Members released a bipartisan letter noting the failures of the Medicare payment system and soliciting comments on how to create a “comprehensive solution that can bring our health care system into the 21st Century.” Of these eight Members, six are physicians. The letter was led by Representatives Ami Bera (D-CA) and Larry Bucshon (R-IN), both of whom are physicians. The Advocacy Committee considers this letter to be an important development, although the response deadline of October 31, 2022, did not provide sufficient time for the OrthoForum to develop consensus on how to respond. The process for reforming the Medicare payment system will, however, be an ongoing one, and it is likely there will be ample opportunities in 2023 to submit comments.

After the priorities meeting, members of the Advocacy Committee had four meetings with House offices and one with a Senate office, as well as one meeting with a Senate office the following day. In these meetings, the Tier 1 issues were discussed, particularly the Medicare reimbursement cut proposed for 2023. During this trip to DC, members of the Advocacy Committee also participated in the National Orthopaedic Leadership Council (NOLC) sponsored by the American Association of Orthopaedic Surgeons (AAOS).

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.

Conversion Factor: As noted in the general policy issues section of the newsletter, the PFS proposed rule would set the 2023 conversion factor at $33.0775, a reduction of $1.5287 from the 2022 conversion factor of $34.6062 (a 4.42 percent reduction). This is a significant cut, particularly given the cumulative effects of cuts made in previous years.

Extension of Therapy Codes: The 2023 proposed rule continues through the end of 2023 many of the Medicare telehealth flexibilities allowed during the PHE for physical therapists (PTs) and occupational therapists (OTs), even if the PHE ends well before then, including CPT codes 97161-97164 for PTs, codes 97165-97168 for OTs, and therapy codes 97110, 97112, and 97116. The 2022 final rule only extended therapy codes 97150, 97530, and 97542 through the end of the PHE; however, the 2023 proposed rule extends those three codes through the end of 2023.

In September, the OrthoForum submitted a comment letter on the PFS proposed rule that addressed these telehealth issues for PTs and OTs, as well the “direct supervision” requirement. The comment letter is discussed below.

CMS Announces Two-Year Extension of BCPIA Program and Certain Changes

Generally: On October 14, 2022, the Centers for Medicare & Medicaid Services (CMS) announced it will extend the Bundled Payments for Care Improvement Advanced (BPCI-A) model for two years. The model will now conclude on December 31, 2025, allowing CMS to test and evaluate several changes it announced for the model, including changes to the pricing methodology.

The announcement noted that over 1.2 million Medicare beneficiaries have been involved in the BPCI-A model, and over 1,800 Acute Care Hospitals (ACHs) in coordination with 69,867 physicians have engaged in care redesign activities because of participation in the model.

The BPCI-Advanced model was originally launched in October 2018 and was set to end in December 2023. The demonstration will now run through the end of 2025, and CMS plans to release a Request for Applications (RFA) in early 2023 for Medicare-enrolled providers, suppliers, and Medicare Accountable Care Organizations (ACOs) to participate for these additional two years. CMS stated:

To be eligible for participation, Convener Applicants must be Medicare enrolled entities or ACOs. Existing Convener Participants would be permitted to remain in the BPCI Advanced Model during the extension years, and ACHs and PGPs could join existing Convener Participants as downstream Episode Initiators during this period. Those interested in applying as Non-Convener Applicants would need to either be an ACH or a PGP.

Both Convener Participants and Non-Convener Participants active during Model Year 6 (2023) will have the opportunity to continue to participate in the BPCI Advanced Model by signing an Amended and Restated Participation Agreement for Model Year 7 (2024).

Additionally, EIs (ACHs or PGPs) who previously participated in the model, but are no longer active, will also have the opportunity to apply for Model Year 7 (2024). More details will be made available on participating in the extension in the coming months.

Changes to Pricing Methodology: CMS also announced it will implement changes to the model’s pricing methodology for Model Year 6 (2023). Specifically, it is making the following changes:

Reducing the CMS Discount for medical Clinical Episodes from 3% to 2%.

Reducing the Peer Group Trend (PGT) Factor Adjustment cap for all Clinical Episodes from 10% percent to 5%.

Make major joint replacement of the upper extremity (MJRUE) a multi-setting Clinical Episode category by including outpatient total shoulder arthroplasty (TSA) procedures (triggered by HCPCS 23472) in the model. CMS will also include a trauma/fracture flag and MJRUE procedure group flag along with their interactions in the risk adjustment for this Clinical Episode.

Participants would be accountable for all Clinical Episodes in which the beneficiary has a COVID-19 diagnosis during the Clinical Episode . . .

Regarding COVID-19 cases, this is a change to the policy announced in June 2020 that CMS would allow participants to exclude beneficiaries with a COVID-19 diagnosis from Model Reconciliation during Model Year 3 (2020) in effort to reduce the financial liability associated with COVID-19 clinical episodes. CMS expects this change to increase clinical episode volume.

CMMI Specialty Care Plans; Upcoming “LAN” Summit

In announcing the extension of the BPIC-A program, CMS also issued a statement that its Center for Medicare and Medicaid Innovation (CMMI) is building on current lessons, challenges, and barriers to test models that provide tools, support, and financial incentives that will enable greater integration of primary and specialty care to meet the needs of an increasingly complex population of beneficiaries. The statement continued that integrated and coordinated care for beneficiaries is an essential feature of a health system that achieves equitable outcomes through accountable, high-quality, affordable, person-centered care.

One aspect of the CMMI specialty care strategy is to continue testing bundled payment models. CMS noted, “Bundled payments for specialty care complement care transformation in other initiatives, and strategic implementation of episode-based models can help fill the geographic and demographic gaps where accountable entities have yet to extend their reach and can keep moving the health system toward accountability for quality and spending outcomes.”

CMMI said it will provide more details on its specialty care strategy soon and it encouraged those interested to attend the Health Care Payment Learning & Action Network (LAN) Summit on November 9 and 10, 2022.

CMS Seeks Public Feedback to Improve Medicare Advantage Program

On August 1, 2022, CMS issued a Request for Information (RFI) seeking public comment to inform potential future rulemaking on improving the Medicare Advantage (MA) program through changes regarding health equity; expanding access; driving innovation to promote person-centered care; supporting affordability and sustainability; and facilitating partnerships and an ongoing dialogue between the program and enrollees and other key stakeholders. These areas are part of what the agency refers to as the “CMS Strategic Pillars”.

The RFI emphasized that it was seeking feedback on ways to strengthen the MA program in ways that align with these Strategic Pillars and also the Biden Administration’s “Vision for America”, which is “to serve the public as a trusted partner and steward, dedicated to advancing health equity, expanding access to affordable coverage and care, and improving health outcomes”. (This approach was described in more detail by the CMS Administrator and other top CMS officials in an article published in Health Affairs in January 2022.)

The comments sought by CMS on promoting person-centered care included comments providing data that could assist the agency in better understanding the experiences of providers and MA plans with value-based contracting within the MA program and in supporting more such contracting within the program. CMS also requested feedback on payment or service delivery models the agency should test to further support MA to achieve higher quality, equitable, and individualized care, including specific innovations to address medical and non-medical needs of enrollees with serious illness. The comment period for the RFI ended on August 31.

Additional Information
For more information on any of the topics discussed in this section, or to join the CMS/CMMI Subcommittee of the OrthoForum Advocacy Committee, please contact Dr. Wilford Gibson at gibsonw@atlanticortho.com.

The political environment is unsettled as we write this two weeks before Election Day 2022.

The first indicator political analysts look at is pollsters’ generic ballot question, which with slight variations goes to the effect of, “If the election were today, would you vote for a Republican or a Democrat for Congress?”

The lead in the generic ballot has seesawed in 2022. Republicans started the year with an advantage, driven by high inflation and President Biden’s relatively low approval ratings. Democrats moved into the lead when the US Supreme Court overturned Roe v. Wade. More recently, Republicans regained the advantage, pressing inflation, crime, and immigration fears in their campaign messaging.

The consensus of Brownstein’s experts is that Republicans will capture the House by a small margin, and the Senate will stay 50-50, or very close.

The difficulty of predicting Senate control is obvious when you look at races individually. There currently are seven races in which one or the other candidates leads by less than four points. In polling terms, those contests are virtually tied. No one in Brownstein has enough confidence in the polls to tout the most recent surveys as absolutely predictive.

Pollsters have acknowledged the difficulty of sampling enough pro-Trump Republicans, who are generally wary of participating in polls. Even a survey that interviews the right number of Republican voters may be deficient in this subset of GOP voters. On the other side, it is increasingly difficult for pollsters to sample young voters, who tend to be Democrats, because they don’t have landline phones.

Concrete evidence of the polls’ limitations is easy to find. Voters increasingly tend to vote the straight ticket, filling in the circle for Republicans in every race or for Democrats in every race. If this tendency prevails in the 2022 midterms, then some of the polls will turn out to be wildly inaccurate. Two Ohio polls released in late October have the Senate race dead even, but have the Republican candidate for governor leading the Democrat by 13 and 24 points, respectively. For these polls to be accurate, a lot of Ohioans will have to pull the lever for the Republican candidate for governor and the Democratic candidate for the Senate. We see similar divergences in polls in Florida, Pennsylvania, and Georgia.

With so many reasons, slight differences in polling lead to confounding headlines. Politico reported in late October that Democrats received good news from polls in battleground states, while the New York Times advised that the numbers are going the wrong way for Democrats in every state but Georgia. It’s possible that both publications are correct, but most people don’t have the bandwidth to parse the results so precisely.