Issue 24, Spring/Summer 2024
Stay up to date on the latest regulatory proposals, congressional activity, and political developments relevant to orthopedic care with this quarter’s OrthoForum Advocacy Newsletter. Included in this edition: updates on the Biden Administration’s Fiscal Year 2025 Hospital Inpatient Prospective Payment System proposed rule, insights from recent Federal Advisory Committee meetings and reports covering physician payment and value-based care, an overview of notable Congressional hearings on cybersecurity, telehealth, private equity, and physician payment, as well as a look at the current state of play in the upcoming 2024 elections.
Advocacy Committee Updates and Announcements
Recent Advocacy Initiatives
This quarter’s newsletter also features some of the Forum’s most recent advocacy work, including comments to CMS on the agency’s request for information (RFI) on Medicare Advantage (HERE) and a letter to Senate sponsors of the Health PRICE Transparency Act 2.0. (HERE). Providing substantive feedback to regulators and lawmakers is crucial for ensuring the orthopedic community’s perspectives and concerns are represented as health care policies are developed.
Responses to OrthoForum’s Medicare Survey
One of the biggest hurdles to getting Medicare Payment Reform is that the perception that beneficiaries are not having issues accessing care. Recently, the OrthoForum sent out a survey to all OF/OC groups asking about their Medicare business. Twenty seven percent (27%) of groups that responded are currently limiting the number of Medicare patients they will schedule and most of those limit it to less than 20% of the possible appointment spots. In addition, forty percent (40%) of the groups are thinking about limiting access to Medicare Beneficiaries. There is an increasing push amongst groups to consider a Concierge option; while only 2 percent (2%) have concierge providers currently forty percent (40%) have explored the option.
Upcoming Advocacy Engagement Opportunities
The OrthoForum remains firmly committed to achieving meaningful Medicare physician payment reform. In addition to enhancing engagement at annual conferences, we plan to send a delegation to Washington D.C. this fall, during the “lame duck” Congressional session. Our goal is to directly engage lawmakers while they still have the opportunity to act on reforms that will stabilize and improve the Medicare physician payment system. Any members interested in joining this crucial advocacy effort should contact Dr. Jeffrey Racca at jracca@theorthoforum.com. Securing sustainable payment policies that properly value orthopedic care remains one of our top priorities. We cannot let this critical issue fall off the radar as the 2024 elections approach.
AAOS Nominating Committee Elections
The OrthoForum encourages all members to vote for our slate of endorsed candidates for the AAOS Nominating Committee. Drs. Hugh Bassewitz, Richard Blake Curd, Chuck Bush-Joseph, John Jay Crawford, Lawrence Halperin, and William Ritchie are highly-qualified private practice advocates who can help shape the future leadership and direction of the AAOS. All AAOS Fellows should have received an email ballot from governance@aaos.org on April 12th with candidate bios. As one of the largest voting blocs with over 5,000 members, the OrthoForum has a significant opportunity to ensure these candidates are elected by exercising our full voting strength. We urge all members to support our endorsed nominees who will be strong voices preserving and promoting the interests of private practice orthopedics. Please note that the election ballot was sent out via email on Friday, April 12, 2024 by Paul Tornetta III, MD, PhD, FAAOS.
BIDEN ADMINISTRATION UPDATE
The Administration recently issued the Fiscal Year 2025 Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital Prospective Payment System (LTCH PPS) Proposed Rule (see HERE for the proposed rule and HERE for the press release) to update Medicare fee-for-service payment rates and policies for inpatient hospitals and LTCHs for FY 2025. Additionally, CMS announced a request for public comment regarding Medicare Advantage, which OrthoForum formally provided a response for on April 18, 2024 in an effort to provide CMS with the Forum’s unique and valuable perspective representing independent orthopedists as the agency works to enhance the quality and accessibility of services provided to Medicare and Medicare Advantage beneficiaries.
With annual Medicare payment rules expected this summer, the OrthoForum will closely track any notable proposed regulations and update members in the next quarter’s newsletter on key policy changes.
CMS Proposes New TEAM Model in IPPS 2025 Proposed Rule
Under the 2025 IPPS Proposed rule, CMS plans to increase payments to inpatient hospitals by 2.6 percent for FY 2025 – a decrease from the 2.8 percent increase in FY 2024. CMS also proposes to increase hospital payments by $2.9 billion, payments to disproportionate share hospitals (DSHs) by $560 million, and new medical technology payments by $94 million. Most notably for orthopedics, the agency is proposing a new mandatory episodic-based aimed at incentivizing coordination between hospitals and primary care physicians during and 30-days post surgery. Please see below for more details on the model.
In the IPPS Proposed Rule, the agency has proposed a new bundled payment model – the “Transforming Episode Accountability Model” (TEAM) – for certain surgical procedures, which could potentially impact providers by effectively lowering reimbursement rates for such procedures. The new model would be a 5-year mandatory model tested under the authority of section 1115A of the Act (CMS Innovation Center, or CMMI) and would begin on January 1, 2026, and ending on December 31, 2030.
Of note for orthopedics, the intent of TEAM is to improve beneficiary care through financial accountability for episodes categories that begin with one of the following procedures: coronary artery bypass (CABG), lower extremity joint replacement (LEJR), major bowel procedure, surgical hip/femur fracture treatment (SHFFT), and spinal fusion. The agency states that TEAM would test “whether financial accountability for these episode categories reduces Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries.”
Please see page 20 of the proposed rule for additional details and HERE for the new TEAM webpage. As always, let us know if you have any thoughts or questions on this.
Federal Advisory Update
This quarter, there have been several notable federal advisory updates, including key MedPAC public meetings and the release of the Commission’s March Report to the Congress. Additionally, the Physician-Focused Payment Model Technical Advisory Committee (PTAC) held a meeting in March to discuss defining and selecting performance measures and financial incentives for physician-focused alternative payment models.
The OrthoForum will continue track issues addressed by the Federal Advisory committees and will provide members with relevant updates, mainly as it related to physician payment policies. Of note, the CMS Actuary missed the April 1 deadline to publish the Medicare Trustees report, which may be released this summer and included in an upcoming newsletter.
MedPAC March Public Meeting
At MedPAC’s March Public Meeting, staff and Commissioners discussed rural hospital and clinician payment policy, assessing data sources for measuring health care utilization by Medicare Advantage enrollees, preliminary analysis of Medicare Advantage quality, and Medicare’s Acute Hospital Care at Home program.
MedPAC staff reviewed existing rural hospitals and clinician payment policies, including special payment adjustments for rural providers under Medicare Fee-for-Service (FFS). Commissioners expressed broad support for the analysis of rural hospitals and clinician payment policies over the next cycle, with strong interest in understanding the interplay between Medicare Advantage and rural providers. Commissioners also raised concerns regarding pharmacy access and 340B-related issues in rural areas, quality reporting measures and administrative burdens, access to specialty care, staffing models to combat workforce shortages, and issues related to cost sharing.
MedPAC March Report to Congress
On March 15, 2024, MedPAC released its March 2024 Report to the Congress: Medicare Payment Policy, which included 15 chapters of MedPAC’s analysis on the context of the Medicare program. In the report, the Commission reviews analysis and makes recommendations on the Medicare fee-for-service payment systems, the Medicare Advantage program, the Medicare prescription drug program, “higher-than-usual inflation”, and the longer-term effects of program spending on the federal budget and the program’s financial sustainability.
The MedPAC recommendations in its report to Congress are non-binding, though are highly valued by both the Administration and Congress. These recommendations are often used as a resource and viewed as an independent analysis by federal leaders and policymakers alike. Please see below for a review of the report and several notable recommendations made by the Commission:
- Hospital Inpatient and Outpatient Services (Chapter 3 of Report)- The Commission found that in 2022, fee-for-service Medicare spent nearly $180 billion on these services, including $7.1 billion in uncompensated care payments made under the IPPS. While general acute care hospitals continued to have the capacity and financial incentive to care for Medicare beneficiaries, and mortality and readmission rates improved, hospitals’ aggregate all-payer operating margin fell to the lowest level since 2008 and their Medicare margin declined to a record low, which the Commission notes was driven by inflation. See below for several notable recommendations made by the Commission:
- For fiscal year 2025, the Congress should update the 2024 Medicare base payment rates for general acute care hospitals by the amount specified in current law plus 1.5 percent
- In addition, the Congress should:
- Begin a transition to redistribute disproportionate share hospital and uncompensated care payments through the Medicare Safety-Net Index (MSNI)
- Add $4 billion to the MSNI pool
- Scale fee-for-service MSNI payments in proportion to each hospital’s MSNI and distribute the funds through a percentage add-on to payments under the inpatient and outpatient prospective payment systems
- Pay commensurate MSNI amounts for services furnished to Medicare Advantage (MA) enrollees directly to hospitals and exclude them from MA Benchmarks
- Physician and Other Health Professional Services (Chapter 4 of Report)- The Commission reported that approximately 1.3 million clinicians (same number of clinicians as the previous year) billed the fee schedule in 2022, including physicians, advanced practice registered nurses, physician assistants, therapists, chiropractors, and other practitioners. The Commission also noted that in 2022 and 2023, most clinician payment adequacy indicators remained positive or improved, but clinicians’ input costs are estimated to have grown faster than the historical trend. The Commission made the following recommendations on payment rates:
- For calendar year 2025, the Congress should:
- Update the 2024 Medicare base payment rate for physician and other health professional services by the amount specified in current law plus 50 percent of the projected increase in the Medicare Economic Index
- Enact the Commission’s March 2023 recommendation to establish safety-net add-on payments under the physician fee schedule for services delivered to low income Medicare beneficiaries
- For calendar year 2025, the Congress should:
PTAC March Meeting
In their March 2024 Public Meeting, PTAC focused on developing and implementing performance measures for Population-Based Total Cost of Care (PB-TCOC) models. The Committee reviewed the current landscape of performance measures and challenges related to measure development, implementation, and linkage to payment. A panel discussed objectives for performance measurement in PB-TCOC models, followed by listening sessions on what to measure, how to measure it, and issues related to selecting and designing measures. Additionally, a stakeholder roundtable on best practices for measuring spending and quality outcome emphasized the importance of aligned, efficient, and meaningful measures, integrating patient-reported outcomes, providing actionable data to providers, and promoting health equity.
The Committee also discussed linking performance measures with payment and financial incentives, with presentations on evidence regarding the impact of performance-based payment incentives, best practices for designing these incentives, and improving data collection and timely sharing of performance information. Throughout the meeting, Committee members and public commenters discussed the need for meaningful, actionable, and equitable performance measures that drive value-based care transformation while minimizing administrative burden, as well as discussed the importance of identifying meaningful, patient-centered measures, balancing measure priorities, leveraging measures to drive health equity and value, and linking measures to payment incentives.
MedPAC April Public Meeting
MedPAC reviewed several notable topics, including telehealth in Medicare and approaches for updating the Medicare Physician Fee Schedule (PFS). Specifically on telehealth, MedPAC staff presented an overview of telehealth policies, trends in utilization, clinicians providing such services, and in-person requirements for telehealth visits. Telehealth utilization has continued to decline since peak usage in the second quarter of 2020, with FQHCs having a greater share of claims with a telehealth service compared to PFS or RHC claims. MedPAC staff outlined potential alternatives to protect Medicare and beneficiaries from unnecessary spending and potential abuses. Commissioners discussed ensuring adequate quality and access of services, examining MA utilization trends, and the importance of program integrity while allowing beneficiaries choice between in-person and telehealth services.
Regarding approaches for updating the PFS, MedPAC staff reviewed potential approaches to address concerns with current PFS updates, including inflation outpacing updates, site-of-service payment differentials contributing to vertical consolidation, and weak incentives for clinicians to participate in Advanced Alternative Payment Models (AAPMs). Commissioners favored updating PFS rates each year by the Medicare Economic Index minus one percentage point with a floor of half of MEI, while also supporting extending the AAPM participation bonus with a restructure based on the number of fee-for-service Medicare beneficiaries in an AAPM attributed to a clinician. Commissioners also discussed the need for better access measures, challenges with the physician workforce and training pipeline, and the role of APMs in driving value-based care.
Congressional Update
This spring, Congressional leaders worked to mitigate cuts to key federal programs. Unfortunately, a physician fee fix was not included in the final package at the start of March that would have lessened the impact of CMS’s final Physician Fee Schedule policies, which went into effect at the start of this year.
Congressional focus has remained centered around various health policy topics, with committees holding hearings spanning a range of issues, from physician payment to cybersecurity and telehealth. There has been significant attention to the Change Healthcare cyberattack, with members on both sides of the aisle weighing in heavily, most notably at the House Energy and Commerce Committee’s hearing on the cyber attack’s impact on physicians and patients. The Committee also reviewed legislation geared towards supporting patient access to telehealth services. In the Senate, the Finance Committee held a hearing on bolstering chronic care through Medicare physician payment to discuss a variety of challenges posed by the current fee-for-services model. Additionally, the Senate HELP Primary Health and Retirement Security subcommittee held a field hearing on the impacts of private equity ownership on patients and physicians. See below for further details on these key events.
In response to legislation introduced by Senators Hickenlooper, Braun, Chairman Sanders, Grassley, and Smith: the Health PRICE Transparency Act 2.0, OrthoForum will be submitting a letter of support advocating for policies in the legislation which benefits member practices and patients alike. To read the letter in its entirety please click HERE.
See below for a committee break-down of notable health-related legislation and hearings from recent weeks.
House Energy & Commerce
On April 16th, the House Energy and Commerce Health Subcommittee held a hearing examining health sector cybersecurity in the wake of the recent Change Healthcare ransomware attack featuring witnesses from the Healthcare Sector Coordinating Council, CrowdStrike, American Hospital Association, College of Healthcare Information Management Executives, and the Texas Spine Center (LINK)
- Topics of discussion focused heavily on the impact of healthcare industry consolidation and vertical integration on cybersecurity vulnerabilities, the need for improved public-private partnerships and information sharing, and the administrative and financial burdens that cyber-attacks have on physicians and hospitals, especially those in rural areas
On April 10th, the House Energy and Commerce Health Subcommittee held a legislative hearing on supporting “Patient Access to Telehealth Services” discussing 15 legislative proposals, notably H.R. 7623, the Telehealth Modernization Act of 2024 and H.R. 7858, the Telehealth Enhancement for Mental Health Act (LINK)
- Key themes of discussion from members included extending expiring telehealth flexibilities, enhancing equitable and accessible health care for patients, provider licensure requirements and reimbursement, and preventing fraud and abuse related to telehealth services
Senate Finance
On April 11th, the Senate Finance Committee held a hearing on “Bolstering Chronic Care through Medicare Physician Payment” where witnesses and members discussed challenges posed by the current fee-for-service model and alternative payment models as potential solutions to support seniors living with chronic conditions. Senators shared varying perspectives on Medicare Advantage plans and MIPS, the effectiveness of APMs and ACOs, enhancing quality and access to care in rural and underserved communities, and administrative burdens faced by healthcare providers (LINK).
Senate HELP
The Senate HELP Primary Health and Retirement Security Subcommittee hosted a field hearing entitled “When Health Care Becomes Wealth Care: How Corporate Greed Puts Patient Care and Health Workers at Risk”, where members and witnesses examined the impacts of private equity ownership on patients and physicians (LINK).
- Of note, Chairman Ed Markey announced new legislation, the Health Over Wealth Act, which aims to protect patients and providers through increased oversight and accountability of private equity in healthcare
Political Update
2024 Presidential Election
Since the last OrthoForum newsletter, former President Trump won the 2024 Republican presidential nomination contest in mid-March, setting up a rematch with President Biden, who did not face a credible challenger. Non-health care issues including but not limited to the Middle East, President Trump’s legal cases, immigration, and other topics remain the focus of the campaign. Former President Trump spending considerable amounts of time and focus in courtrooms as he faces multiple cases over several issues, framing the legal cases as election interference by President Biden’s Administration.
Health Policy on the Campaign Trail
Although non-health policy debates remain the focus of the candidates, President Biden is seeking to contrast himself with Mr. Trump on several issues health issues including abortion, insurance coverage, and Medicare prescription drug policy.
The President is campaigning on reinstating Roe v. Wade as abortion law while Mr. Trump has advocated for state-by-state determinations. Additionally, the President is criticizing Mr. Trump for previous pledges to repeal the Affordable Care Act, which the former President now says he is “not running to terminate it” but rather improve (“much better, stronger and far less expensive”). Mr. Trump has declined to discuss the Medicare Drug Price Negotiation Program specifically, but President Biden consistently highlights the Program as an accomplishment and as something Mr. Trump wants to repeal.
As the campaign moves into the Summer and Fall and “pocketbook issues” like health care affordability rise to the top of the agenda, it is possible that insurance costs will become a key topic. Notably, election day is in the middle of Medicare open enrollment, which runs from October 15 through December 7 annually, and may prove to be a catalyst for how seniors vote.
