Issue 21, Summer/Fall 2023
Stay up-to-date on the latest regulatory proposals, congressional activity, and political developments relevant to orthopedic care with this month’s OrthoForum Advocacy Newsletter. Included in this edition: CMS proposals impacting orthopedic payments and coverage, MedPAC’s recommendations on telehealth and site-neutral payments, updates on relevant health policy legislation, an overview of the 2024 presidential race, and more.
Upcoming Events: OrthoForum in DC
On September 18, 2023, AAOS in conjunction with the NOLC is hosting a Capitol Hill “fly-in” event for physicians, including members of OrthoForum. We will kick-off the visit with a roof-top happy hour event for OrthoForum members and friends hosted by our lobbying team, Todd Strategy Group, followed by AAOS-scheduled visits to several Congressional offices for meetings to advocate for priorities impacting orthopedic care. Click here to view the flyer, and contact Rachel Riley (rriley@theorthoforum.com) with any further questions.
BIDEN ADMINISTRATION UPDATE
CMS proposed several policies impacting orthopedic surgeons via the annual Medicare Hospital Outpatient Prospective Payment System (OPPS) and Physician Fee Schedule (PFS) proposed rules. The proposed changes address payment rates, telehealth flexibilities, and coverage of intensive outpatient programs that will have significant effects on orthopedic surgical practices.
The proposed Medicare payment rule changes by CMS indicate continued decreased reimbursement for many procedures in 2024, underscoring challenges for private practices.
Physician Fee Schedule
CMS released the CY2024 PFS Proposed Rule on July 13, 2023. Importantly, the CY2024 Conversion Factor was $32.7476 which is a decrease of approximately 3.4% compared to the finalized CY2023 Conversion Factor of $33.0607. Of note for orthopedics, many surgical specialties are again facing payment cuts, this year an estimated 2% to 3% payment cut.
On specialty-specific impacts by site of service and private practice consolidation, CMS announced a new Public Use File demonstrating estimated specialty payment impacts at a more granular level, specifically by showing ranges of impact for practitioners within a specialty (Page 1284 of the Proposed Rule).
Specifically on telehealth flexibilities, CMS noted that the agency received requests to permanently add various services to the Medicare Telehealth Services List effective for CY 2024 but found that none of the requests met Category 1 or Category 2 criteria for permanent addition to the Medicare Telehealth Services List.
Due to the influx of requests in recent years from the pandemic, CMS began a separate and more organized process for telehealth flexibility related matters in 2021. In this year’s proposed rule, CMS noted that many stakeholders requested to permanently add various services to the Medicare Telehealth Services List for CY2024, but the agency found that none of the requests met the required criteria (for both Category 1 and 2). Further, CMS incorporated a table (Table 9 on page 88 of the proposed rule) to show CPT codes including but not limited to 97161-97164. The agency stated that it continues to question clinical benefit for many issues that are addressed “when therapists furnish therapy services via telehealth to beneficiaries”, though the agency is proposing to keep these services on the Medicare Telehealth Services List until the end of CY 2024 and will consider any further action regarding these codes in future rulemaking.
Additionally, CMS proposes to continue to define “direct supervision” to permit the presence and “immediate availability” of the supervising practitioner through real-time audio and visual interactive telecommunications through December 31, 2024. Lastly, CMS addressed Split/Shared Evaluation and Management (E/M) Services, proposing to delay the implementation of the definition of the “substantive portion” as more than half of the total time through at least December 31, 2024.
Outpatient Provider Payment Services
CMS also released the CY2024 OPPS Proposed Rule on July 13, 2023 , proposing to increase the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of only 2.9% for all hospital services despite record levels of inflation and persistent workforce challenges in the health care industry. Total payments to OPPS providers for calendar year (CY) 2024 would be approximately $88.6 billion under the proposed rule, an increase of approximately $6.0 billion compared to estimated CY 2023 OPPS payments.
Beginning in CY 2024, CMS proposes to establish payment for intensive outpatient programs (IOPs) under Medicare as a distinct intensive ambulatory treatment program offering less than 24 hours of daily care separate from an individual’s home or in an inpatient or residential setting. This provision would establish coverage for IOP services furnished in RHCs and FQHCs and includes occupational therapy, family counseling, beneficiary education, diagnostic services and individual and group therapy. CMS details proposed physician certification requirements, coding and billing, and payment rates for the program.
Considering the substantial impact of the COVID-19 PHE on healthcare utilization, CMS is proposing to extend the policy to update the ASC payment system for an additional two years using the hospital market basket, which will be updated (by 3.0 percent reduced by the productivity adjustment of 0.2 percentage point) to a productivity-adjusted factor of 2.8 percent for ASCs meeting the quality reporting requirements.
FEDERAL ADVISORY UPDATE
MedPAC’s June Report to the Congress addressed a number of topics, including site-neutral payments, ambulatory settings, and telehealth-related flexibilities. In the report, the Commission evaluated the utilization of telehealth services during the PHE and the relationship between expanded telehealth coverage and quality, access, and costs, as mandated by the Consolidated Appropriations Act of 2022. In its detailed look at Ambulatory Settings, the Commission also made several recommendations to help maintain Medicare beneficiary access to ASC services. Additionally, GAO released a report focused on challenges and potential policies related to regenerative medicine.
Telehealth Findings and Recommendations
Following Congress’s extension of many of Medicare’s telehealth expansions through December 31, 2024, and interest in alternative approaches for payments and spending related to telehealth, MedPAC provided insights into telehealth usage, impacts, and various policy recommendations. MedPAC reported that focus groups are requesting a continuation for the option of telehealth visits after the end of the PHE. In the Commission’s annual survey of Medicare beneficiaries, 40 percent of telehealth users said they were interested in continuing to use telehealth after the pandemic ends.
The Commission recommended that CMS resume paying the lower facility rate for telehealth services as soon as practicable after the PHE data is collected from practices on the costs incurred (Page 21 of the Report). Further, the Commission recommended that CMS provide telehealth services and adjust future payment rates, if warranted, based on the information gathered and noted that if policymakers decide to permanently cover distant-site telehealth services delivered by FQHCs and RHCs, there should be continued payment parity with the lower PFS rates. The Commission also voiced support for paying FQHCs and RHCs for telehealth services after the PHE at rates comparable with PFS rates for telehealth services. However, CMS will likely need legislative authority to implement this policy.
Regarding payment rates, the Commission recommended two potential options, (1) paying for telehealth services at rates equal to their standard in-person rates (which are substantially above PFS rates), which is how FQHCs and RHCs currently bill for mental health services performed via telehealth, or (2) paying them a rate that is similar to the rate for comparable telehealth services billed under the PFS, which is how Medicare pays them for non– mental health telehealth services during the PHE. The Commission also noted that paying standard rates for telehealth visits could also be a disincentive to furnish in-person care, result in paying substantially more for an FQHC- or RHC-provided telehealth service, and increase costs for the Medicare program.
The Commission’s findings support the need for medical records review and other program integrity activities to ensure clinicians accurately bill for telehealth services. The Commission highlighted the use of audio-only services as a future area of analysis since, in 2023, clinicians are required to indicate audio-only services on Medicare claims.
Ambulatory Setting Findings and Recommendations
MedPAC discussed site-neutral policy in the ASC chapter, recommending that Congress “more closely align payment rates across ambulatory settings for selected services that are safe and appropriate to provide in all settings and when doing so does not pose a risk to access.” The Commission also emphasized the need for CMS to make the final decision “concerning the services for which it is appropriate to align OPPS payment rates with either PFS rates or ASC rates” and noted that the agency should determine this in regard to the service being safe and appropriate to provide in the “majority of circumstances.” Further, the Commission added that CMS should ensure that the payment rate alignment not impact a hospital’s ability to “maintain emergency care and standby capacity.”
On CMS’s budget neutral adjustment, the Commission recommended that CMS provide further support by augmenting the aligned payment rates when one of the aligned services is provided as part of a visit for emergency care. Additionally, the Commission encouraged CMS to closely monitor the effect of payment rate alignment on beneficiary access to the services that have aligned payment rates.
MedPAC believes the recommendations will not directly impact Medicare program spending because of how CMS would apply budget neutral increases to the OPPS payment rates of the nonaligned services. However, the recommendations may indirectly affect program spending due to the reduction of incentives for hospitals to acquire physician practices. Furthermore, the Commission’s recommendations result in lower cost-sharing liability for site-neutral services.
GAO Technology Assessment Report on Regenerative Medicine
In July 2023, the U.S. Government Accountability Office (GAO) released a 55-page-long Technology Assessment Report on Regenerative Medicine. The report reviewed an assessment completed by the agency on current and emerging regenerative medicine technologies and therapeutic applications, as well as policy options and challenges related to regulation. Of note, the report addresses bone injuries and bioprinted bone replacement therapy. GAO provides details for 11 policy options for Congress, Federal Agencies, State and local governments, academic and research institutions, and industry leaders to help address challenges and enhance the benefits of regenerative medicine including the following:
- Invest in standards development
- Provide opportunities for increased interactions between regulatory experts and smaller companies, especially early in the development process
- Consider whether changes to the framework for evaluating combination products and medical devices to accommodate emerging technologies and therapies may be necessary
- Provide more oversight and feedback to suppliers to increase consistency in starting materials
CONGRESSIONAL UPDATE
Health policy is set to remain an active issue on Capitol Hill as multiple committees advanced bills on topics including telehealth, price transparency, accessibility, and coverage amid a series of markups and hearings prior to August recess. Beyond routine policy debates, issues including AI and cybersecurity illustrate Congress’ expanding oversight into health care and technology matters. Notably, the House Science Committee held a hearing in July examining AI where several members emphasized ethical oversight and the need for guardrails in the field of medicine. Specifically, Reps. Caravazo and McCormick expressed interest in the role of AI in personalized medicine, diagnostics, and changing specialties such as radiology and pathology. Senate Majority Leader Chuck Schumer (D-NY) has also cited AI as a priority.
Also of note, On June 23, 2023 Reps. Reps. Glenn Thompson (R-PA), Mike Thompson (D-CO), Brett Guthrie (R-KY), and Angie Craig (D-MN) introduced the Medicare Orthotics and Prosthetics Patient Centered Care Act to ensure that Medicare beneficiaries have access to the orthotics and prosthetics devices they need. Rep. Glenn Thompson stated that this legislation “recognizes access to medically necessary and high-quality orthotics and prosthetics are critical for mobility and the overall quality of life of the patient.” Rep. Guthrie added that “It’s critical for patients’ long-term health that they not only have access to orthotics and prosthetics devices but also have access to care to customize the devices to their needs.” While no action has been taken since its introduction, the bill has strong support from the America Orthotic and Prosthetic Association (AOPA) and 42 other advocacy groups.
Separately, questions regarding name, image, and likeness (NIL) issues in college sports have spurred discussions on the increased liability for orthopedic surgeons, PTs, and other professionals. Of note, Senator Blumenthal recently reintroduced legislation on NIL, signaling that further action is forthcoming.
See below for a committee break-down of notable health-related legislation from recent markups.
- House Ways & Means– On July 26th, the Committee held a markup of H.R. 4822, the Health Care Price Transparency Act of 2023 (sponsor: Rep. Jason Smith) and H.R. 3284, the Providers and Payers COMPETE Act (sponsor: Rep. Michael Burgess), both of which were favorably reported out of the committee. The Health Care Price Transparency Act would codify hospital price transparency regulations and impose site-neutral policies on drug administration services. Importantly, the Providers and Payers COMPETE Act would require the Secretary of HHS to issue a report on consolidation of providers and payers
- House Energy and Commerce– On July 19th, committee held a markup of 15 health-related bills, most notably H.R. 834 the Telehealth Benefit Expansion for Workers Act of 2023 (sponsor: Rep. Tim Walberg) which expands accessibility of telehealth services to employees and H.R. 3836 the Medicaid Primary Care Improvement Act (sponsor: Rep. Dan Crenshaw) which aims to broaden healthcare access for beneficiaries by allowing the use of direct primary care services
- House Education & Workforce– On July 12th, the Committee held a markup on a bipartisan health care package comprised of four bills: H.R. 4509 The Transparency in Billing Act (sponsor: Rep. Virginia Foxx), H.R. 4507 The Transparency in Coverage Act (sponsor: Rep. Bob Good), H.R. 4527 The Health DATA Act (sponsor: Rep. Lori Chavez-DeRemer), and H.R. 4508 The Hidden Fee Disclosure Act (sponsor: Rep. Joe Courtney). Committee Chairwoman Virginia Foxx (R-NC) stated in the markup that together, these bills “all better equip the administration to carry out the intention of the No Surprises Act” by ensuring patients are billed accurately, hospitals are held accountable for services they charge, and beneficiaries have access to transparent cost data prior to undergoing medical treatment
POLITICAL UPDATE
Roughly a year and a half away, attention surrounding the 2024 presidential election is quickly gaining traction. According to the latest polling averages, former President Donald Trump is leading the crowded Republican field followed by Florida Governor Ron DeSantis, entrepreneur Vivek Ramaswamy, former VP Mike Pence, and Senator Tim Scott (R-SC) (See Polling Below). Incumbent President Joe Biden is widely expected to be the Democratic nominee but faces intra-party challengers (Robert F. Kennedy Jr., Marianne Williamson) and other concerns. The next catalyst (See “Upcoming Catalysts below) will be the Upcoming Debates and 2023 Special Elections.
Health Policy In 2024 Presidential Election
To date, 16 candidates (12 R, 3 D, 1 I) have announced their official candidacy for the 2024 Presidential Election. As deadlines like the September 30th sunsets approach, healthcare policies will likely gain more traction as candidates expand platforms ahead of the primaries.
In GOP election news, Trump is currently going after Pharma and drug pricing, stating he will implement a new “Most-Favored Nation” (MFN) model. On the Democratic side, President Biden has focused on the IRA, last summer’s Democrat-only reconciliation package of drug price-setting reforms, climate subsidies, and energy credits, which is anticipated to be a key platform plank for his candidacy. Notably, RFK Jr. has critiqued vaccine mandates and emphasized holistic health approaches, previewing unconventional health policy positions which may gain traction in different corners.
As a reminder, candidates much reach at least 1% support in three national polls or 1% in two national polls and one early state poll to qualify for the first Republican debate. Additionally, candidates must reach a donor requirement of 40,000 unique donors and commit to support the future GOP nominee in order to participate in the first debate, which took place on August 23 in Milwaukee, WI.
Candidates who debated in Milwaukee included Ron DeSantis, Nikki Haley, Vivek Ramaswamy, Mike Pence, Chris Christie, Tim Scott, Asa Hutchinson, and Doug Burgum. Topics of discussion during the debate included but were not limited to foreign policy, national security, climate change, and education. Of note for health policy, the fentanyl crisis and abortion were most widely discussed by candidates, while mentions of Medicare, Medicaid, and mental health were only briefly commented on.
Upcoming Catalysts
Iowa State Fair
– Thursday, August 10, 2023- Sunday, August 20, 2023
GOP Debates
– Wednesday, August 23, 2023 – Milwaukee, WI GOP Debate #1
– TBD, September 2023 – Simi Valley, CA GOP Debate #2 at Ronald Reagan Presidential Library
Upcoming 2023 Special Elections
Rhode Island 1st Congressional District
– Special Primary: September 5, 2023
– Special General: November 7, 2023
Utah 2nd Congressional District
– Special Primary: September 5, 2023
– Special General: November 21, 2023
Below are current GOP Presidential Candidate National polling numbers as well as relevant state polls in Iowa, South Carolina, New Hampshire, and Nevada.
| GOP CANDIDATE | POLLING |
| Former President Donald Trump | 52.4% |
| Florida Gov. Ron DeSantis | 14.1% |
| South Carolina Sen. Tim Scott | 2.9% |
| Former UN Ambassador and Former South Carolina Gov. Nikki Haley | 5.4% |
| Former New Jersey Gov. Chris Christie | 4.1% |
| Vivek Ramaswamy | 8.1% |
| Former Vice President Mike Pence | 4.9% |
| Former Arkansas Gov. Asa Hutchinson | .8% |
| Former Texas Rep. Will Hurd | .3% |
| Perry Johnson | .3% |
| North Dakota Gov. Doug Burgum | .9% |
More 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 or one of the Forum’s subcommittee chairs (See contact information below).
Therapy Services – Renee Duncan at duncan@orthotennessee.com
CMS & CMMI – Dr. Wilford Gibson at gibsonw@atlanticortho.com
ASC – Teresa Copeland at copeland@orthotennessee.com
Cybersecurity – Scott Paneitz at spaneitz@signaturehealth.net
