Washington Roundup - November 8, 2024

Medicare Payment Updates

There were lots of CMS announcements on November 1.

• Calendar Year (CY) 2025 Medicare Physician Fee Schedule Final Rule (Fact Sheet)
  • “By factors specified in law, average payment rates under the PFS will be reduced by 2.93% in CY 2025, compared to the average amount these services were paid for most of CY 2024. The change to the PFS conversion factor incorporates the 0% overall update required by statute, the expiration of the temporary 2.93% increase in payment for CY 2024 required by statute, and a relatively small estimated 0.02% adjustment necessary to account for changes in work relative value units (RVUs) for some services. This amounts to an estimated CY 2025 PFS conversion factor of $32.35, a decrease of $0.94 (or 2.83%) from the current CY 2024 conversion factor of $33.29.”
• CY 2025 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule (Fact Sheet)
  • “In accordance with Medicare law, CMS is finalizing an update to OPPS payment rates of 2.9% for hospitals that meet applicable quality reporting requirements. This update is based on the projected hospital market basket percentage increase of 3.4% reduced by a 0.5 percentage point productivity adjustment.
  • “In the CY 2019 OPPS/ASC final rule with comment period, CMS finalized a proposal to apply the hospital market basket update to ASC payment system rates for an interim period of five years (CY 2019 through CY 2023). The CY 2024 OPPS/ASC final rule with comment period extended the interim period for an additional two years (through CY 2024 and CY 2025).
  • “Accordingly, using the hospital market basket update, CMS is finalizing an update factor to the ASC payment rates for CY 2025 of 2.9%. The update applies to ASCs meeting relevant quality reporting requirements. This update is based on the projected hospital market basket percentage increase of 3.4% reduced by a 0.5 percentage point productivity adjustment.”

• Calendar Year 2025 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) Final Rule (Fact Sheet)
  • “For CY 2025, CMS is increasing the ESRD PPS base rate to $273.82, which CMS expects will increase total payments to all ESRD facilities, both freestanding and hospital-based, by approximately 2.7%. The CY 2025 ESRD PPS final rule also includes changes to the methodology for calculating the ESRD facility wage index, changes to the Low-Volume Payment Adjustment (LVPA) methodology, and several changes to the ESRD outlier policy.”
• Along with the payment rules, CMS offers fact sheets about the following topics
  • Calendar Year (CY) 2025 Medicare Physician Fee Schedule Final Rule (CMS-1807-F) – Medicare Shared Savings Program Provisions
  • “CMS Announces New Policies to Reduce Maternal Mortality, Increase Access to Care, and Advance Health Equity”
  • HHS Finalizes Physician Payment Rule Strengthening Person-Centered Care and Health Quality Measures
• Bloomberg adds,
  • The [Medicare physician fee schedule] rule quickly elicited calls for Congress to overhaul the way Medicare sets payment rates. Federal law requires that any payment increases be offset by equal cuts elsewhere in the program.
  • “To put it bluntly, Medicare plans to pay us less while costs go up. You don’t have to be an economist to know that is an unsustainable trend, though one that has been going on for decades,” said a statement from Bruce A. Scott, president of the American Medical Association. 
  • “For physician practices operating on small margins already, this means it is harder to acquire new equipment, harder to retain staff, harder to take on new Medicare patients, and harder to keep the doors open, particularly in rural and underserved areas,” Scott said.
• and
  • “Overall Medicare payments to home health agencies will increase by 0.5%, or $85 million, next year under a final rule released Friday.
  • “The total amount reflects a 2025 payment increase of 2.7%, or $445 million, according to the rule (RIN 0938-AV28) from the Centers for Medicare & Medicaid Services. But that amount would be offset by an estimated 1.8% payment cut of $295 million as part of a “permanent behavior adjustment” based on the assumption that home health agencies altered their billing and coding activity to maximize reimbursements in previous years.
  • “The payment offsets are part of a CMS plan to use future rulemaking to recover billions of dollars in apparent overpayments.”

Also, per an October 30, 2024, CMS press release.

• CMS updated the ‘Birthing-Friendly’ designation icons on Care Compare for the first time since rolling out the initiative in October 2023. Hospitals that attested to the Maternal Morbidity Structural measure in the Hospital Inpatient Quality Reporting Program received the designation. The icons will be refreshed using updated data from CY 2023. CMS created the designation to identify hospitals and health systems that participate in a statewide or national perinatal quality improvement collaborative program and that implement evidence-based care to improve maternal health. Eighty percent of pregnancy-related deaths are preventable, and Black, American Indian and Alaska Native, and Native Hawaiian and Pacific Islander people have the highest rates of pregnancy-related death. The ‘Birthing- Friendly’ designation is a step towards ensuring that all pregnant and post-partum people can find high-quality maternity care.