Issue 26, Fall/Winter 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.
In this edition, we provide a deeper look at the recently released 2025 Physician Fee Schedule and Outpatient and Provider Services Final Rules, which are currently the top priority for our advocacy committee due to their significant impact on physician practices and the provider community as a whole. Additionally, we provide key insights from MedPAC’s recent public meetings and an update on the Congressional state of play following elections. The OrthoForum and our partners at Todd Strategy Group will continue to monitor notable policy developments as the 119th Congress begins and the new Administration takes office, particularly focusing on changes to federal healthcare programs and other notable healthcare initiatives impacting physicians and patients alike.
ANNOUNCEMENTS
Recent and Upcoming Visits to Washington DC for Advocacy Work
OrthoForum Advocacy Committee Members visited Washington, DC, in September for the annual National Orthopaedic Leadership Conference (NOLC) to attend a series of meetings on the Hill with our partners at Todd Strategy. These meetings were highly productive and underscored the effectiveness of OrthoForum’s advocacy efforts. During this pivotal event, we engaged directly with key lawmakers, including Congressman Greg Murphy, M.D. (R-NC), Congressman Michael Burgess, M.D. (R-TX), and staff from the Senate Finance and House Energy and Commerce Committees. Discussions focused on critical issues such as physician reimbursement reform, reducing administrative burdens like prior authorization, and advocating for physician-owned hospitals.
The OrthoForum shared a post highlighting this on LinkedIn and Twitter, showcasing our productive meeting with Congressman Greg Murphy, M.D., among others.
Your engagement is critical in 2024 as we face unprecedented challenges to private medical practice. The proposed Medicare Physician Fee Schedule cuts pose a significant threat to healthcare delivery and practice sustainability. We urge you to contact your federal legislators to advocate for measures to mitigate these cuts. Your voice as a physician carries substantial weight in this discussion.
- Take action now: Access our pre-formatted email template [HERE] to efficiently communicate with your representatives. Every message strengthens our collective voice for preserving quality healthcare delivery.
Announcement from the Coalition for Patient-Centered Care
A little over a year ago, The OrthoForum launched a new initiative in its ongoing mission to promote and advance the independent practice of orthopaedics. Over the last several years, we have all become aware of the increased intrusion of private equity companies acquiring orthopaedic practices, including several OrthoForum and OrthoConnect members. In response, the OrthoForum Board approved engaging an advisory firm to guide the building of a coalition of like-minded physician organizations and patient advocacy support groups to address this problem. From this initial effort, the Coalition for Patient-Centered Care was created. Steve McCollam, M.D., with Peachtree Orthopaedic Clinic, chairs our organization. You can go to our website at https://patientcenteredcare.com/ to gain a good understanding of what our mission and strategy are.
Today, we have over 13,000 physicians that have joined this effort.
We are attempting to address this problem both at the federal and state levels. Additionally, we are seeking opportunities to support legislation and influence regulatory rulings that are favorable to our positions. To date, we have met with all of the commissioners of the FTC, participated in an FTC workshop on the corporatization of healthcare, spoken before two subcommittee hearings in Congress, and given our support to several state and federal bills that align with our interests. However, we recognize that the PE industry is vast and well-funded, so achieving results is a long-term effort.
Although we have good participation from OrthoForum members today, we need more people involved. If you are interested in this issue, we would love to have you join the fight! Please contact Glenn Sumner at gsumner@theorthorforum.com if you would like to know more.
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).
Therapy Services
We are pleased to welcome Russ Johnson from OrthoTennessee as our new Director of Therapy Services. We extend our gratitude to Renee Duncan for her dedicated leadership in this role.
Contact: Russ Johnson at Russell.Johnson@orthotennessee.com
CMS & CMMI
Contact: Joel James at jjames@signaturehealth.net
ASC
Contact: Kathleen Regan at kregan@excelsiorortho.com
Private Equity
Contact: Steve McCollam, M.D., at steve@pocatlanta.com
Cybersecurity
Contact: Scott Paneitz at spaneitz@signaturehealth.net
ADMINISTRATION UPDATE
This quarter, CMS finalized several policies impacting orthopedic surgeons via the 2025 Medicare Hospital Outpatient Prospective Payment System (OPPS) and Physician Fee Schedule (PFS) Final Rules. Both final rules implemented changes, including but not limited to, coverage of intensive outpatient programs, telehealth flexibilities, and payment rates.
Looking ahead, President-elect Donald J. Trump’s second term could alter the administrative landscape for healthcare. While specific priorities and appointments remain uncertain, the White House may focus efforts on addressing healthcare costs, shaping federal health programs, and implementing public health reforms aimed at chronic diseases. Notably, the President-elect has promised to protect Medicare and not pursue a repeal of the Affordable Care Act. President-elect Trump continues staffing his incoming administration, with nominees Robert F. Kennedy Jr. and Dr. Mehmet Oz formally selected as Secretaries of Health and Human Services and the Centers for Medicare and Medicaid Services, respectively, as key figures in shaping his public health agenda.
CY 2025 Physician Fee Schedule Final Rule
On November 1, 2024, CMS released the CY 2025 Revision to Payment Policies Under the Physician Fee Schedule and Other Revisions to Medicare Part B Final Rule. CMS finalized a decrease to the Conversion Factor of 2.83%, from $33.29 to $33.35.
For anesthesia services, CMS states the RVUs as calculated already reflect the payments as adjusted by modifiers, and no volume adjustments are necessary. However, CMS notes a time adjustment of 33% is made only for medical direction of two to four cases, since that is the only situation where a single practitioner is involved with multiple beneficiaries concurrently.
Additionally, CMS notes the final CY 2025 Medicare Economic Index (MEI) update is 3.5%, based on historical data through the second quarter of 2024. For orthopedics and other surgical specialties, CMS states the estimated impacts reflect decreases in payments relative to other specialties. These decreases largely result from the redistributive effects of the implementation of the Year 4 update to clinical labor pricing and proposed adjustments to the transfer of post-operative care for global surgical procedures. CMS also attributes the decreases to the revaluation of individual procedures based on reviews, including consideration of AMA and RUC review and recommendations, as well as decreases resulting from the continued phase-in implementation of the previously finalized supply and equipment pricing updates.
Regarding telehealth flexibilities, CMS is proposing to continue several policies through December 31, 2025, including:
- Defining direct supervision to permit the presence and “immediate availability” of the supervising practitioner through real-time audio and visual interactive telecommunications
- Permitting direct supervision via interactive audio and video telecommunications
- Allowing teaching physicians to have a virtual presence in all teaching settings, but only for services furnished as a Medicare telehealth service
CMS is finalizing as proposed to continue suspension of telehealth frequency limits on subsequent inpatient, nursing facility, and critical care consultations through CY 2025.
For global surgical procedures, CMS is finalizing 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.
CY 2025 Outpatient Prospective Payment System Final Rule
CMS released the CY 2025 Medicare Hospital Outpatient Prospective Payment System final rule on November 1, 2024, increasing the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 2.9% for all hospital services—an increase of 0.3% from the proposed rule. CMS states this increase results from the final inpatient hospital market basket percentage increase of 3.4% for inpatient services paid under the hospital inpatient prospective payment system (IPPS), reduced by a final productivity adjustment of 0.5 percentage points. CMS anticipates total payments to OPPS providers for CY 2025 will be approximately $87.7 billion, an increase of approximately $4.7 billion compared to estimated CY 2024 OPPS payments.
For Ambulatory Surgical Centers, CMS increased payment rates by 2.9% for ASCs that meet the quality reporting requirements under the ASCQR Program. This increase is based on a final hospital market basket percentage increase of 3.4 percent reduced by a productivity adjustment of 0.5 percentage points. Based on this final update, CMS estimates total payments to ASCs for CY 2025 will be approximately $7.4 billion, an increase of approximately $308 million compared to estimated CY 2024 Medicare payments.
- Changes to the ASC Covered Procedures List (CPL): CMS is adding 21 medical and dental procedures to the ASC CPL and ancillary services lists based on existing criteria. Importantly, CMS provides a rationale for not including the 71 recommended procedures starting on page 1017 of the final rule. CMS encourages interested parties to submit procedure recommendations to be added to the ASC CPL, particularly if there is evidence these procedures meet the agency’s criteria and can be safely performed in the ASC setting.
- Inpatient Only (IPO) List: CMS is removing a pelvic fixation code (CPT code 22848) from the IPO list for CY 2025. However, the agency is adding three liver allograft services described by CPT codes 0894T, 0895T, and 0896T to the IPO list.
Federal Advisory Update
This quarter, there have been several notable federal advisory updates, including MedPAC’s September, October, and November Public Meetings, during which the Commission examined various physician payment and practice issues, including potential fee schedule reforms, changes to alternative payment models, and challenges in care delivery across both traditional Medicare and Medicare Advantage. As a whole, the Commission’s discussions during these meetings highlighted concerns about long-term physician payment adequacy and practice sustainability, while exploring ways to reduce administrative burdens and improve payment accuracy for clinicians. The OrthoForum will continue to track the Commission’s work leading up to the next public meeting in December.
September Public Meeting
MedPAC’s September Public Meeting provided context for Medicare payment policy, with staff projecting Medicare spending to nearly double from $1 trillion in 2023 to $1.9 trillion in 2032, driven by growing beneficiary numbers and increased service volume and intensity. The Commission discussed outpatient cost-sharing at Critical Access Hospitals (CAHs), presenting a model that could reduce beneficiary coinsurance by about $2.1 billion (a 60% reduction) while noting that CAH coinsurance has been growing at 7–8% annually. The Commission also examined quality reporting challenges in rural settings, particularly for CAHs and small rural providers, with discussions of potential improvements through ACOs and MA plans—a topic that will be further explored in MedPAC’s June 2025 report.
October Public Meeting
At the October Public Meeting, the Commission revealed key insights from focus groups with Medicare beneficiaries and clinicians across multiple cities, highlighting significant challenges in coverage selection and care delivery. During these sessions, clinicians shared their perspectives on critical practice issues, including new patient acceptance, integration of nurse practitioners and physician assistants, ACO participation, and the administrative burden of prior authorization requirements. Commissioners emphasized the need for better quantitative data around appointment wait times and called for increased transparency in plan selection, particularly regarding broker compensation and the need for enhanced Medicare Plan Finder tools. The Commission also examined Medicare Advantage supplemental benefits, noting that MA rebates have grown significantly to approximately $83 billion in 2024, with plans shifting how they allocate these funds toward non-Medicare services.
November Public Meeting
During the Commission’s November Public Meeting, staff and commissioners addressed critical payment and reimbursement topics, including potential reforms to the Medicare Physician Fee Schedule that would tie updates to MEI growth. The Commission also discussed the future of Advanced Alternative Payment Model (AAPM) bonuses, which will decrease from 5.0% to 3.5% in 2025 and 1.88% in 2026 before sunsetting, with data showing about half of participating clinicians receive less than $1,000 in bonus payments. Additionally, the Commission reviewed Medicare Advantage provider networks and their adequacy standards, with plans to analyze the relationship between network design and access indicators—a topic particularly relevant as more beneficiaries move into MA plans.
Congressional Update
With the White House, Senate, and likely the House in Republican control, legislators will now turn their focus to addressing a December 20th deadline during the “lame duck” session to enact another government funding bill and avoid a government shutdown. The two most likely paths are a Continuing Resolution to March, which would extend the current level of funding for all programs for three months. Alternatively, leaders from both parties could choose to enact a more comprehensive one-year funding package. While the first scenario allows a new administration to put its fingerprints on the spending package early in the new year, this decision could delay a new administration in implementing priorities from the campaign until a deal is reached. In the second scenario, lawmakers would likely consider ways to address the looming physician cut, Disproportionate Share Hospital Payments, Pharmaceutical Benefit Manager (PBM) reform, Community Health Center funding, and extending telehealth flexibilities put in place during the pandemic, among several other non-health-related items.
Congress is currently deliberating the length of an appropriations agreement under the pending change in governing structure in 2025. While the President-elect and Republicans will be newly empowered in January 2025, they will need to strike a deal with current Senate Majority Leader Schumer and other congressional Democrats. Of note, it was announced on November 13, 2024, that Senator John Thune (R-SD) will serve as the next Senate Majority Leader.
Of note since our last newsletter, there have been several updates on the legislative front regarding physician reimbursement and site neutral policy, with new legislation introduced by Reps. Greg Murphy, MD (R-NC) and Jimmy Panetta (D-CA) and a framework released by Senators Bill Cassidy (R-LA) and Maggie Hassan (R-NH). The OrthoForum will continue to advocate for legislation aimed at easing the administrative and financial burdens burdening physicians, with the overarching goal of maintaining stable, healthy presence of musculoskeletal providers within the house of medicine.
Medicare Patient Access and Practice Stabilization Act
- On October 29th, Reps. Greg Murphy, M.D. (R-NC), and Jimmy Panetta (D-CA) introduced the Medicare Patient Access and Practice Stabilization Act with Reps. Mariannette Miller-Meeks, M.D. (R-Iowa), Raul Ruiz, M.D. (D-Calif.), Larry Bucshon, M.D. (R-Ind.), Kim Schrier, M.D. (D-Wash.), John Joyce, M.D. (R-Penn.), and Ami Bera, M.D. (D-Calif.). This legislation would eliminate the 2.8% reimbursement cut proposed in the Physician Fee Schedule and provide a 1.8% payment update in 2025, which is equal to one-half of the Medicare Economic Index update.
Cassidy/Hassan Site-Neutral Policy Framework
On November 1st, Sens. Bill Cassidy, M.D. (R-LA), and Maggie Hassan (D-NH) released a policy framework proposal to address site-neutral Medicare payment reform. A brief summary of the policies proposed is below:
- Eliminate the grandfathering exception included in the Bipartisan Budget Act of 2015, extending the site-neutral payment policy to all hospital-owned sites of care away from the hospital’s main campus.
- Require the Secretary of Health and Human Services to identify procedures that are safely and commonly performed in a hospital setting, ambulatory surgical center, or physician office. The Secretary would review four years of data and determine the setting where each procedure was most commonly performed. The Secretary would then set the reimbursement rate according to the site where the procedure was most commonly performed.
- Implement a scalable model for reinvesting site-neutral savings in rural and safety net hospitals through Medicare.
- Incentivize hospitals to engage in two-sided risk models.
