Advocacy Newsletter Q3 2024

Issue 25, Summer/Fall 2024

Stay up-to-date on the latest regulatory proposals, congressional activity, and political developments relevant to musculoskeletal care with this quarter’s OrthoForum Advocacy Newsletter. Included in this edition: an overview of recent proposed rules released by the Centers for Medicare and Medicaid Services, key Federal Advisory Committee reports and Data Book releases on physician-focused issues, an overview of notable Congressional hearings on private equity and consolidation in health care, physician reimbursement, value-based care, and administrative burdens, as well as a look at the current political state of play in the upcoming 2024 elections as we approach November.

ANNOUNCEMENTS

Recent and Upcoming Visits to Washington DC for Advocacy Work

In July, OrthoForum Advocacy Chair Dr. Jeffrey Racca visited Capitol Hill to advocate on behalf of OrthoForum’s top priorities with Congressional Staff from primary committees of jurisdiction.
– Racca met with NRSC Chairman Jason Theilman, Rep. Michael Burgess (R-TX), and several key staff members at Senate Finance, House Energy and Commerce, and Senator Ben Ray Lujan’s (D-NM) office. Discussion at meetings focused on highlighting OrthoForum’s role as the nation’s largest independent orthopedic group and its commitment to advancing best practices in musculoskeletal care. Dr. Racca spoke on behalf of the OrthoForum to advocate for reforming the physician reimbursement system, addressing administrative burdens, and leaning on physician feedback on recent CMMI models to ensure high-quality care and equitable access for Medicare beneficiaries.
From September 23-24, OrthoForum Advocacy Committee Members will be visiting Washington DC for the annual National Orthopaedic Leadership Conference (NOLC) as members of Congress head back to Washington DC for a busy month ahead of a campaign-heavy fall season. Attendees will listen in on general symposia sessions and meet with legislators to discuss health policy issues impacting orthopaedic practices across the country. For OrthoForum members interested in joining us, please contact us for more information.

OrthoForum Member Survey: Medicare Part B and Medicare Advantage Participation
Understanding the current landscape of Medicare participation among our peers is crucial for informed decision-making and effective advocacy. The OrthoForum has recently released a white paper on the issue to provide a comprehensive overview of the current landscape of physicians interacting with Medicare. CLICK HERE to read the full report. To gain insight into this important topic, we are requesting OrthoForum members to participate in two brief surveys on Medicare Part B (CLICK HERE) and Medicare Advantage (CLICK HERE) participation and experiences, which is being done in conjunction with several partners including AAOS, AAOE, COA, LUGP, and others. These survey results provide valuable insights into how our members are navigating the complex Medicare landscape. As we continue our advocacy efforts, this data will help inform our strategies and ensure we’re addressing the most pressing issues affecting orthopedic practices. We thank you for your valuable feedback and look forward to following up with further analysis in our next newsletter.

BIDEN ADMINISTRATION UPDATE

The Biden Administration continues to shape healthcare policy through various regulatory actions, most recently via The Centers for Medicare & Medicaid Services (CMS), which released the CY 2025 Physician Fee Schedule (PFS) and the CY 2025 Outpatient Prospective Payment System (OPPS) Proposed Rules. Both of these proposals contain provisions that could significantly impact practices- the Advocacy Committee is actively reviewing these proposals and preparing comprehensive responses to ensure OrthoForum members’ interests are well-represented. We encourage all members to review the details below and share any thoughts or questions with the Committee.

Also of note, the Advocacy Committee recently submitted detailed comments in response to CMS’s solicitation in the Inpatient Prospective Payment System (IPPS) Proposed Rule. The feedback addresses several aspects of the proposed rule, most importantly the inclusion of physician group practices (PGPs) in the proposed Transforming Episode Accountability Model (TEAM). Please CLICK HERE to read OrthoForum’s full comments, which urge CMS to take into account the proven benefits of involving PGPs in care management and decision-making processes within the proposed TEAM structure.

The past few months have been marked with increased attention towards improving cybersecurity measures in the medical field following the Change Healthcare cyber attack earlier this year. To voice the OrthoForum’s support for protecting patient data and enhancing cyber incident reporting, the Advocacy Committee submitted comments to the Cybersecurity and Infrastructure Security Agency (CISA) regarding its proposed rule under the Cyber Incident Reporting for Critical Infrastructure Act (CIRCIA). Please CLICK HERE to read the letter and as always, let us know if you have any questions.

CY 2025 Physician Fee Schedule Proposed Rule

On July 10, 2024, CMS released the CY 2025 Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Medicare Part B Proposed Rule (CLICK HERE). For the fifth year in a row, CMS proposed decrease to the Conversion Factor- the agency proposes a 2.80 percent decrease from $33.29 to $32.36. Similarly, the anesthesia conversion factor is proposed to be reduced from $20.7739 to $20.3340. This decrease accounts for the statutorily required zero percent baseline update for 2025 under the Medicare Access and CHIP Reauthorization Act (MACRA) and the expiration of the 2.93 percent temporary increase in payment for CY2024. CMS acknowledges the ongoing growth in the cost to practice medicine as the agency projects the increase in the Medicare Economic Index (MEI) for 2025 will be 3.6 percent.

For orthopedics and other surgical specialties, CMS notes that the estimated impacts reflect decreases in payments relative to other specialties. The agency states that these decreases are largely due to the redistributive effects of the Year 4 update to clinical labor pricing and proposed adjustments to transfer of postoperative care for global surgical procedures.

Regarding telehealth flexibilities, CMS is proposing to continue several policies through December 31, 2025, including:

Allowing direct supervision via interactive audio and video telecommunications
Permitting teaching physicians to have a virtual presence for purposes of billing for services involving residents in all teaching settings when the service is furnished virtually
Continuing to allow certain non-face-to-face services to be furnished via telehealth

CMS is also proposing to remove frequency limitations for subsequent inpatient, nursing facility, and critical care telehealth visits to allow for more flexibility in providing these services via telehealth.

For global surgical procedures, CMS is proposing that there will be a postoperative transfer of care 20% of the time for total knee arthroplasty (CPT code 27447), with a corresponding 21% decrease in payment for those cases. This is reflected in a utilization crosswalk of 0.958 for CPT code 27447.

We encourage members to review the full proposed rule and share any thoughts or feedback with the Advocacy Committee as we prepare to submit comments to CMS by the September 9, 2024 deadline.

CY 2025 Outpatient Prospective Payment System Proposed Rule

CMS released the CY2025 OPPS Proposed Rule on July 10, 2024, proposing to increase the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 2.6% for all hospital services. This increase is based on the proposed hospital inpatient market basket percentage increase of 3.0% reduced by a proposed productivity adjustment of 0.4 percentage point. Total payments to OPPS providers for CY 2025 would be approximately $88.2 billion, an increase of approximately $5.2 billion compared to estimated CY 2024 OPPS payments.

For Ambulatory Surgical Centers, CMS proposes to increase payment rates by 2.6% for ASCs meeting quality reporting requirements. This increase is based on the same factors as the OPPS increase. CMS estimates that total payments to ASCs for CY 2025 will be approximately $7.4 billion, an increase of approximately $202 million compared to estimated CY 2024 Medicare payments.

Changes to the ASC Covered Procedures List (CPL): CMS is proposing to add 20 medical and dental procedures to the ASC CPL and ancillary services lists based on existing criteria.
Inpatient Only (IPO) List: CMS is not proposing to remove any services from the IPO list for CY 2025. However, the agency proposes to add three new services described by CPT codes 0894T, 0895T, and 0896T to the IPO list.

We encourage members to review the full proposed rule and share any thoughts or questions with the Advocacy Committee ahead of the September 9^th comment deadline.

Federal Advisory Update

This quarter, there have been several notable federal advisory updates, including the MedPAC June 2024 Report to Congress and the MedPAC July 2024 Data Book– both of which cover topics including physician payment, alternative payment models, ambulatory surgical centers, hospital outpatient services, and more. As we eagerly await the Commission’s return for their September Public Meeting, the OrthoForum will continue to track issues addressed by the Federal Advisory committees and will provide members with relevant updates, particularly as it relates to physician payment policies.

MedPAC June 2024 Report to Congress

As part of its mandate from Congress, MedPAC released its annual report on improvements to Medicare payment systems and issues affecting the Medicare program. This year, the Commission focused on six key topics, including approaches for updating clinician payments, addressing provider networks and prior authorization in Medicare Advantage, and more.

Generally, the Commission noted concern about whether payment updates under current law will remain adequate in the future. Payment rates are set to be flat in 2025, and, starting in 2026, payment rates will increase by 0.75 percent per year for qualifying clinicians participating in advanced alternative payment models (A–APMs) and by 0.25 percent for all other clinicians. Meanwhile, MedPAC notes that clinicians’ input costs, as measured by the Medicare Economic Index (MEI), are expected to increase by an average of 2.3 percent per year from 2025 through 2033—exceeding the growth in PFS payment rates by a greater amount than has been the case over the past two decades.

In addition, the Commission is concerned about the growing differential between payment rates when a service is billed in a freestanding clinician office vs. a hospital outpatient department (HOPD). The Commission notes that this differential likely encourages more services to be billed in the higher-paid HOPD setting and could spur additional vertical consolidation in the health care industry.

Approaches for updating clinician payments and incentivizing participation in alternative payment models:

The Commission considers two approaches for updating FFS Medicare’s PFS payment rates to adequately account for cost growth and to ensure Medicare beneficiaries maintain access to clinician services.

Approach 1 would update the practice expense portion of fee schedule payment rates by the hospital market basket, adjusted for productivity.
Approach 2, which is the Commission’s preference, would update total fee schedule payment rates by the MEI (which includes a productivity adjustment) minus 1 percentage point. Approach 2 also features a minimum update equal to half of MEI, to avoid updates that are very low or negative.

The Commission also contemplates temporarily extending the bonus for participation in A–APMs, noting doing so for a few more years would help maintain clinician participation in A–APMs in the late 2020s.

Provider Networks and Prior Authorization in Medicare Advantage:

MedPAC states that prior authorization has been identified as a major source of administrative burden for providers and can become a health risk for patients if policies affect the treatments clinicians offer, inefficiencies in the process cause needed care to be delayed or abandoned, or poor decisions cause necessary care to be denied.
The Commission notes that because MA plan prior authorization requirements vary by service type, they can impact beneficiaries with certain conditions and some provider types/specialties more than others.
Though a substantial number of services may be subject to prior authorization, overall MedPAC found that 95 percent of prior authorization requests in 2021 had fully favorable decisions, 1 percent of prior authorization requests had partially favorable decisions, and 4 percent had adverse decisions.
MedPAC notes that in the Commission’s annual focus groups with physicians, nurse practitioners, and physician assistants, many clinicians brought up, without prompting, the negative effects of prior authorizations.

MedPAC July Data Book

On July 16, MedPAC released the annual 200-page Data Book for July 2024 (CLICK HERE), comprised of 11 sections on a range of topics including physicians and other health professionals, hospital outpatient services, and ambulatory service centers:

Key Physician Spending Data
The Commission notes that total PFS schedule spending (excluding beneficiary cost sharing) was $73.6 billion in 2021, and allowed charges totaled $92.8 billion. The Commission found that cumulatively from 2013-2021, the spending per beneficiary increased at a rate of 14%. Encounters with specialist physicians accounted for the majority of all encounters. These encounters fell by an average of 0.8 percent per year between 2017 and 2021 but grew by 1.3 percent from 2021 to 2022.

Hospital Outpatient Services
Spending under the outpatient PPS was $79.2 billion in 2023 ($65.1 billion in program spending, $14.1 billion in beneficiary copayments). The Office of the Actuary estimates that the outpatient PPS accounted for about 6.5% of total Medicare program spending in 2023. The Commission also found that between 2013 and 2023, overall spending by Medicare and beneficiaries on hospital outpatient services covered under the outpatient PPS increased by 71%.

Episode-Based Payment Model Data
The Commission states that episode-based payment models give health care providers a spending target for most types of care provided during a clinical episode. Within fee-for-service Medicare, the episode-based payment model with broadest participation is the Comprehensive Care for Joint Replacement (CJR) Model, with 324 participating hospitals.

Participation in the BPCI Advanced Model shrank from 280 acute care hospitals and physician group practices in 2023 to 247 in 2024. The number of participants in the model is divided evenly between hospitals (123) and physician practices (124).
The Commission notes that CMS plans to test another episode-based payment model, the Transforming Episode Accountability Model (TEAM), starting in 2026 to draw on lessons learned from the CJR and BPCI Advanced models. As proposed, MedPAC notes that TEAMs will be a mandatory model that focuses on quality and spending metrics during the 30-day period following certain surgical procedures.
MedPAC states that more than 60 percent of physician practices participating in the model initiate episodes in all of the service-line groups in 2024, which is substantially less than the 80 percent of practices that initiated episodes in all service-line groups in 2023.

– Among participating hospitals, there is more variation. Nearly 57 percent of hospitals initiate episodes within the cardiac care service-line group, while only 10 percent of hospitals opt to initiate episodes in the orthopedic and cardiac procedures service-line groups.
– About one-third of all BPCI Advanced episode initiators accept episode-based payments for more than four of the eight clinical-episode service-line groups and twenty-eight percent accept episode based payments for only one clinical-episode service-line group.

Ambulatory Surgical Centers
The number of Medicare-certified ASCs grew at an average annual rate of 2.0 percent from 2016 through 2022. In this same period, an annual average of 220 new facilities entered the market, while an average of 116 closed or merged with other facilities.

Congressional Update

As Congress approaches its annual August recess and looks ahead to reduced activity in October due to the approaching election, there has been a flurry of activity on Capitol Hill. Several key committees have held hearings addressing crucial issues facing the medical community, including the challenges to independent practices, physician reimbursement, challenges related to value-based care models, and the continued stress of administrative burdens in healthcare.

Notably, there has been movement on several important pieces of legislation, including the “Improving Seniors’ Timely Access to Care Act of 2024” (S. 4518/H.R. 8702), which has been reintroduced with bipartisan support. This modified version of the 2021 bill aims to streamline prior authorization processes in Medicare Advantage and improve patient care access, while addressing previous concerns about federal deficit impact. The new legislation maintains its goals of reducing administrative burdens on physicians and enhancing transparency in health insurer practices, incorporating changes to ensure budget neutrality.

In response to Senator Ed Markey’s (D-MA) request for information (RFI) on his “Health Over Wealth” discussion draft, the Advocacy Committee has submitted a detailed letter outlining OrthoForum’s support for certain provisions and expressing concerns over potential unintended consequences for compliant providers. We look forward to continuing this important dialogue to refine the legislation in a way that best serves the house of medicine. Please CLICK HERE to read the full letter.

Here is a committee break-down of notable health-related legislation and hearings from recent weeks…

On May 23, the House Ways and Means Health Subcommittee held a hearing entitled “The Collapse of Private Practice: Examining Challenges Facing Independent Medicine” featuring several physician witnesses from various backgrounds.

Throughout the hearing, witnesses and members on both sides of the aisle expressed interest in finding bipartisan solutions to support the viability of independent physician practices in the U.S. Themes of questioning focused on administrative burdens including prior authorizations, Medicare physician reimbursement, consolidation and private equity, rural access challenges, and medical liability. Notably, Chris Kean, COO of TSAOG Orthopaedics & Spine, highlighted the many factors pushing physicians towards employment by hospitals and corporations, reducing patient choice and potentially increasing healthcare costs. Despite these challenges, she described how her practice has remained independent through diversification of services, strategic partnerships, and a focus on quality care. However, Kean stressed that without addressing these systemic issues, the trend of consolidated healthcare systems will likely continue.

The House Energy and Commerce Subcommittee on Health held a hearing on June 13 to “check-in” on CMMI and assess the transition to value-based care with witness CMMI Deputy Administrator and Director Elizabeth Fowler.

Members questioned Ms. Fowler on the value derived from CMMI’s testing of various payment models and expressed overall concerns regarding estimates from the Congressional Budget Office (CBO) on the budgetary effects of the activities of CMMI. Members spoke to potential avenues through which CMMI can fulfill its statutory goals of reducing spending and improving healthcare outcomes in the future, notably discussing the viability of CMMI models for physician-owned hospitals, providers in rural and underserved areas, and challenges facing specialist providers.

The House Ways and Means Health Subcommittee also held a hearing on June 26 focused on improving value-based care, where members discussed the transition from fee-for-service to value-based care, the successes and shortcomings of models put forth by CMMI, challenges facing rural healthcare providers, the role of Medicare Advantage (MA), and the need for improved data collection and sharing.

On May 8, the Senate Budget Committee held a hearing focused on “Alleviating Administrative Burdens in Health Care” where members on both sides of the aisle expressed concern over the significant costs and negative impacts of administrative burdens in healthcare, discussing potential solutions such as reducing paperwork, streamlining prior authorizations, and implementing value-based payment models to improve efficiency and patient care.

Political Update

Former President Trump leads by an average of 2.5% in the polls, while top issues for Americans remain the economy and inflation. Much of the recent attention in the race has focused on the attempted assassination of former President Trump, with bipartisan calls from Congressional leaders for answers from the Secret Service and intel community. Meanwhile, Democrats face a difficult landscape with President Biden’s recent decision to step aside as the Democratic candidate after a difficult first debate and instead announced his full endorsement for Vice President Kamala Harris, who recently selected Minnesota Governor Tim Walz as her running mate. With the Democratic National Convention only a few weeks away, the party is expected to broadly continue pressing voter focus on the Republicans’ position on health care issues such as abortion.

Health Policy on the Campaign Trail

The Republican National Committee released its 2024 platform in early July. Notable health policy mentions include:

Medicare – “President Trump has made absolutely clear that he will not cut one penny from Medicare or Social Security”

– “Republicans will protect Medicare’s finances from being financially crushed by the Democrat plan to add tens of millions of new illegal immigrants to the rolls of Medicare. We vow to strengthen Medicare for future generations”

Support Active and Healthy Living – “Republicans will support increased focus on Chronic Disease prevention and management, Long-Term Care, and Benefit flexibility. We will expand access to Primary Care and support Policies that help Seniors remain in their homes and maintain Financial Security”
Affordable Healthcare – “Healthcare and prescription drug costs are out of control. Republicans will increase Transparency, promote Choice and Competition, and expand access to new Affordable Healthcare and prescription drug options. We will protect Medicare, and ensure Seniors receive the care they need without being burdened by excessive costs”
Protect Care at Home for the Elderly – “Republicans will shift resources back to at-home Senior Care, overturn disincentives that lead to Care Worker shortages, and support unpaid Family Caregivers through Tax Credits and reduced red tape”

Democrats released their 2024 platform in mid-July, highlighting the following health-focused issues:

Prescription Drug Costs – “We are lowering the price of commonly used drugs for diabetes and heart failure. We capped the price of insulin at $35 a month for nearly 4 million seniors on Medicare.”
Medicare Expansion – “President Biden and Democrats will continue to lower the cost of health care, building on President Biden’s historic action allowing Medicare to negotiate lower drug prices by growing the list by at least 50 drugs a year.”
Protecting Social Security and Medicare – “And he will stand firm to protect Social Security and expand benefits, and make Medicare permanently solvent by making the wealthy pay their fair share in taxes.”
Affordable Health Care – “We are saving millions of Americans an average of $800 a year on their health care premiums.”
Mental Health Support – “Democrats will increase access to mental health care, and push to expand 988 — the National Suicide & Crisis Lifeline launched by the Biden-Harris Administration — to serve more Americans.”
Opioid Crisis Response – “Democrats will continue critical investments to curb opioid overdoses, including expanding access to life-saving medication and care for Americans struggling with addiction.”
Health Equity – “Democrats will also keep fighting to address racial inequities, from health care to education to housing.”

For more information on any of the topics discussed in the newsletter, please contact either the chair of the OrthoForum Advocacy Committee, Dr. Jeffrey Racca (raccajw@nmortho.net), OrthoForum’s CEO Karen Simonton (ksimonton@theorthoforum.com), or one of the Forum’s subcommittee chairs (See contact information below).