In IHP, TRP’s McCarthy Overviews Policy Implications of Proposed FY 21 Physician Fee Schedule

In an article for Inside Health Policy, TRP Senior Vice President Shea McCarthy shared his insight on the heated debate over the Centers for Medicare and Medicaid Services’ (CMS) fiscal year (FY) 2021 physician fee schedule (PFS). With payment reductions of up to 11 percent imminent as a result of the proposed FY 2021 PFS, McCarthy pointed out that Congress may start to take the option of waiving the budget neutrality requirements underpinning the E/M pay bumps seriously. “Between reductions in patient volume and a hiatus on elective procedures, COVID-19 is already putting a massive strain on America’s healthcare system — and lawmakers are increasingly recognizing that many providers will struggle to keep their doors open if these drastic cuts are implemented,” said McCarthy.  

The article in its entirety can be read below.

Providers Look To Congress To Avert Physician Pay Cuts

By Michelle M. Stein / August 5, 2020 at 4:00 PM

The American Medical Association, therapists and others are pushing Congress to avert large-scale cuts proposed by CMS this week for certain physician specialties by waiving budget neutrality requirements. Doing so would let CMS pay more for evaluation and management codes without cutting others’ pay.

Some specialties could see pay bumps as high as 17% next year under the proposed physician fee schedule for 2021, while others could see pay cuts as large as 11%. The redistribution of pay is a result of the budget neutrality requirements linked to the increase in pay for evaluation and management visits set to start in 2021. AMA President Susan Bailey said the group appreciates the pay increases for office visits, but the offsetting reduction of nearly 11% to the Medicare conversion factor – which helps determine how much physicians are paid per Relative Value Unit – is unsustainable.

Provider groups are frustrated the cuts are moving forward despite their discussions with CMS over the past year. The American Association of Orthopaedic Surgeons said CMS has disregarded petitioning, data and discussions shared with the agency during the last year, and AAOS President Joseph Bosco said the move appears to be part of a larger CMS plan to place less value on surgery.

“Devaluing the time and effort that orthopaedic surgeons spend prioritizing value-based care communicates a larger plan by the agency to gradually reduce the value of these procedures. Not to mention the fact that our surgeons have the highest participation rates across medical subspecialties in alternative payment models, where they work to optimize care and improve patient outcomes all while reducing costs,” Bosco said in a statement.

Orthopedic surgical services are set for a 5% cut.

The American Physical Therapy Association, the American Occupational Therapy Association and the American Speech-Language-Hearing Association note that physical therapy providers, occupational therapy providers, speech-language pathologists, and audiologists are facing between a 7% and 9% cut, “despite ongoing advocacy with Congress, the Department of Health and Human Services, CMS, and the Office of Management and Budget.”
Providers say that Congress now needs to step in.

“[T]he AMA strongly urges Congress to waive Medicare’s budget neutrality requirement for the office visit and other payment increases. Physicians are already experiencing substantial economic hardships due to COVID-19, so these pay cuts could not come at a worse time,” Bailey said in a statement.

Some provider groups have been urging Congress to step in since CMS indicated the cuts were coming in the 2020 physician fee schedule. Following the release of the propose 2021 rule, more than 35 organizations say waiving budget neutrality in the physician fee schedule is the best way to allow for pay bumps for primary care providers while making sure others aren’t hit with cuts they say could cause serious access issues.

“If Congress fails to mitigate these cuts, decreases in Medicare payments will further exacerbate the problems occurring across the country with practices furloughing or cutting staff and an increasing number closing their doors. Of great concern is the impact that this will have on access to needed health care services, especially for beneficiaries in rural and underserved areas. Because, in the end, if these detrimental cuts are implemented, those who suffer the most will be patients,” the groups said in a statement Tuesday.

Shea McCarthy, senior vice president at Thorn Run Partners, said that with payment reductions of up to 11% now imminent, Congress may start to take the option of waiving the budget neutrality requirements underpinning the E/M pay bumps seriously.

“Between reductions in patient volume and a hiatus on elective procedures, COVID-19 is already putting a massive strain on America’s healthcare system — and lawmakers are increasingly recognizing that many providers will struggle to keep their doors open if these drastic cuts are implemented,” McCarthy said.

Ted Okon, executive director of the Community Oncology Alliance, noted that even health care teams that might see a pay bump in one area could see cuts in others, and all health care teams will likely be affected. Oncologists are projected to see a 14% bump, but Okon noted they often work with those in radiology, who are set to see a 11% cut, and those in radiation oncology and radiation therapy centers are looking at a 6% cut.

Okon stressed that Congress stepping in is not a guarantee, and even those who might benefit from the E/M pay bump could have a hard time implementing the coding changes that go along with the bump. Practices will be implementing big coding changes while much of the staff is working from home and the providers are stressed due to the pandemic, he said. Because of those challenges, Okon said, it would have been prudent for CMS to hold off on the E/M changes for a year.