CMS drops 4 final payment rules for 2024: 19 takeaways

CMS has released annual payment updates for physicians, hospital outpatient settings and the Medicare Shared Savings Program as well as a remedy for the 340B-acquired drug payment policy.

Physician fee schedule rule

1. The physician fee schedule conversion factor for 2024 is $32.74, a $1.15 (3.4%) decrease from the 2023 conversion factor of $33.89.

2. CMS is finalizing its proposal to make payment when practitioners train caregivers to support patients with certain diseases or illnesses — such as dementia — in carrying out a treatment plan. Medicare will pay for these services when furnished by a physician or non-physician practitioner or therapist as part of the patient's individualized treatment plan or therapy plan of care. 

3. CMS is finalizing coding and payment changes it says better account for resources involved in furnishing patient-centered care involving a multidisciplinary team of clinical staff and other auxiliary personnel. The finalized services are aligned with the HHS social determinants of health action plan and help implement the White House's Cancer Moonshot goal of every American with cancer having access to covered patient navigation services. 

4. CMS is finalizing the implementation of a separate add-on payment for HCPCS code G2211. The agency said the add-on code will "better recognize the resource costs associated with evaluation and management visits for primary care and longitudinal care." It will generally be applicable for outpatient and office visits as an additional payment, "recognizing the inherent costs involved when clinicians are the continuing focal point for all needed services, or are part of ongoing care related to a patient's single, serious condition or a complex condition."

Hospital Outpatient Prospective Payment System and ASC rule

5. CMS finalized payment rates for hospitals and ASCs that meet applicable quality reporting requirements by 3.1%. This is a slight increase on the 2.8% payment update the agency initially proposed. 

6. This update is based on the projected hospital market basket percentage increase of 3.3%, reduced by a 0.2 percentage point for the productivity adjustment.

7. The payment updates will affect about 3,500 hospitals and 6,000 ASCs.

340B-acquired drug payment final rule

8. CMS will provide a lump sum payment to each hospital participating in the 340B Drug Pricing Program, totaling $9 billion, to make them whole from unlawful payment cuts from 2018 to 2022. The $9 billion in lump sum payments is the same in the final rule as in the proposed version.

9. About 1,700 hospitals are set to receive the funds by Jan. 1.

10. Beneficiary copayments comprise about 20% of the payments affected 340B hospitals did not receive due to the payment policy. Because of the lump sum payment structure, providers are not able to bill beneficiaries for that cost-sharing, according to the agency. CMS is accounting for beneficiary cost-sharing within the lump sum payment to 340B hospitals, which may not bill beneficiaries for coinsurance on remedy payments as a result. 

11. To implement a required $7.8 billion budget neutrality adjustment, CMS will reduce future non-drug item and service payments by adjusting the Outpatient Prospective Payment System conversion factor by -0.5% beginning in 2026. The agency said it landed at -0.5% to minimize the financial burden of this required offset on affected hospitals.

12. Providers that did not enroll in Medicare until after Jan. 1, 2018 — and thus did not fully benefit from the increased payment for non-drug items and services from 2018 through 2022 — are excluded from the prospective rate reduction.

Medicare Shared Savings Program rule

13. Changes in the shared savings program are expected to increase participation in it by between 10% and 20%.

14. Such changes include moving ACOs toward digital measurement of quality, starting Jan. 1, 2025.

15. The addition of a third step to the beneficiary assignment methodology will encourage greater recognition of the role of nurse practitioners, physician assistants and clinical nurse specialists in delivering primary care services.

16. Proposed policies will be delayed one year to align with the Merit-based Incentive Payment System to give ACOs more time to work with their participants to meet new requirements. 

Health equity

17. As part of the physician fee schedule final rule, CMS is finalizing separate coding and payment for several new services to help underserved populations. These include community health integration services, the first time physician fee schedule services specifically include such care.

18. CMS is also supporting increased dental services for people with cancer.

19. People on Medicare will also be able to access marriage and family therapists and mental health counselors.

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