On March 8, Congress passed a suite of health policies in a federal funding package that averted a partial government shutdown. Included in those policies were several critical Medicare Physician Fee Schedule (MPFS) for which AAHKS has been advocating. As a preface to the following summary of policies: they do not reflect the value that AAHKS members provide to patients, freeing them from the chronic pain of osteoarthritis and returning them to a healthy and full mobile life. The relief reflects hard-fought policies, within a fiscally austere split-Congress that has the narrowest of voting margins. The ability of Congress to enact meaningful long-term reform to the MPFS will change, and Congressional support for tackling the inadequacy of physician reimbursement is growing through the advocacy efforts of our physician members and association.
Summary of policies passed:
- Conversion Factor Boost of 1.68% to all services, March 9 – Dec 31. Total CF increase for remainder of 2024 is 2.93%.
- Extended the expiring APM participation fee through payment year 2026 (performance year 2024) at 1.88%.
- Extended the “geographic practice cost indices” (GPCI) that is used to adjust MPFS payments based on the costs of providing care in different areas, which eliminates negative adjustments in low-cost areas, through the end of 2024.
Medicare Physician Fee Schedule Conversion Factor (CF) Boost: The legislation increases the CF by 1.68% that will apply to all services from March 9 through December 31, 2024. Congress had already provided a 1.25% conversion factor boost for the full 2024 calendar year, so the total CF increase will be 2.93% for the remainder of the year. (Approximately $730 Million)
Additional AAHKS Perspective: In 2022 Congress passed two years of CF support, which was scheduled to complexly phase out in 2024. At the beginning of 2023, Congressional Leadership and the health care committees were adamant that they would not provide any additional support for 2024 – they clearly told the Association that it was a non-starter. It was only through the overwhelming outpouring of advocacy through AAHKS Members reaching out to lawmakers, and AAHKS executing an advocacy campaign to overwhelm Leadership’s starting position that we were able to secure additional relief. AAHKS engaged Members of Congress across the country to join in multiple letters and direct outreach to Congressional Leadership to press our case. We cannot emphasize how important your grassroots outreach to your Members of Congress has been for this effort. At the end of 2023, Congress had circled around allocating $670 million to boost the CF, which translated to approximately an additional 1.25% increase. Congress was unable to move any critical legislation at the end of the year, including basic government funding bills causing months of delays. In the morning of Congressional Leadership’s March negotiations on CF funding levels, AAHKS learned that one negotiator’s position was supporting a 0.75% CF boost. AAHKS engaged our Congressional Champions and networked with other stakeholders to put pressure on that negotiator to back off their position. Ultimately, the Leadership negotiations ended up allocating more money to CF relief than they had planned to at the end of 2023.
Medicare APM Participation Payment: Congress extended the expiring APM participation fee through payment year 2026 (performance year 2024) at 1.88%. (Approximately $730 Million)
Additional AAHKS Perspective: While CF support was a priority for a broad cross-section of health care providers, AAHKS was the tip-of-the spear for extending the expiring APM participation payment. AAHKS members are pioneers in value-based-care, with the highest APM participation rates of any specialty. The challenge of extending the APM participation fee was two-fold: 1) Congressional leadership did not intend this to be a permanent payment to APM participants, just a temporary incentive and 2) the high cost of extending the APM payment. We will continue to press on increasing the APM participation payments that reflect the value of AAHKS-member investments in health care quality improvement and cost reduction. Despite a much smaller pool of stakeholders pushing for the payment extension, Congress allocated as much money for the APM payment as they did for CF support. Within the context of the Congressional environment, AAHKS and our members should be encouraged to continue their advocacy on this important policy.
Extending Relief for Physicians Practicing in Low-Cost Areas: Medicare uses “geographic practice cost indices” (GPCI) to adjust MPFS payments based on the costs of providing care in different areas. Areas with more expensive practice costs receive an increase, while areas with low practice costs can receive a negative adjustment. Congress extended a policy that eliminates negative adjustments in low-cost areas through the end of 2024. (Approximately $415 million)
Additional AAHKS Perspective: One area of universal Congressional sympathy is rural and underserved health care providers. Congressional support stems from a mix of politics and policy. There is general recognition of access, recruitment and payor-mix challenges in low-cost areas. Many members of Congress who represent rural districts trend fiscally conservative, but the unique needs of their districts often incentivizes them to support the additional federal expenditures necessary to extend the “GPCI floor”. AAHKS leveraged this cross-section of political and policy sensitivity to successfully advocate against additional cuts to our members who take care of patients in low cost areas.
Within the halls of Congress this suite of policies is being framed as significant relief for physicians. For those of you that went into debt to get the best medical training, restore quality of life to so many patients, invest in research to improve care and alternative payment models to reduce costs – but seeing year-over-year cuts – it’s not enough. Over the course of the year, AAHKS will leverage the election cycle to secure additional support for addressing long-term reform of the physician fee schedule to include an inflationary adjustment – including engaging Presidential platforms. We will also be pursuing medium-term legislation that brings some stability to the wild fluctuations of the MPFS.
Thank you for your support of AAHKS advocacy efforts, and we encourage you to participate (or continue to participate) in grassroots outreach to your Members of Congress. We are approaching a critical juncture in Medicare physician fee schedule reform, and your voices will shape it.
