Doctors’ groups condemn Medicare PFS cut in conversion factor

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Doctors’ groups and other health care organizations had divided reactions to Thursday’s release of the 2024 Medicare Physician Fee Schedule (PFS). While they denounced reductions to the Medicare conversion factor, several praised other changes to the schedule.

According to the Centers for Medicare and Medicaid Services (CMS), the 2024 conversion factor will be $32.74. This represents a decrease of $1.15, or 3.4%, from 2023. At the same time, CMS says it is increasing payments for visits for primary and longitudinal care, among other services.

“CMS remains steadfast in our commitment to supporting physicians and ensuring that people with Medicare have access to the care they need to stay healthy as well as navigate health conditions they are facing,” CMS Administrator Chiquita Brooks-LaSure said in a statement.

The conversion factor is one of three elements, along with the Resource-Based Relative Value Scale and Geographic Practice Cost Indices, that sets physician payments under the PFS.

The strongest criticism of the 2024 PFS came from the American Medical Association. Its president, Jesse M. Ehrenfeld, M.D., M.P.H., issued a statement calling it “an unfortunate continuation of a two-decade march in making Medicare unsustainable for patients and physicians.”

The statement notes that the adjustment comes at a time when the Medicare Economic Index—the government’s measure of inflation in medical practice costs—went up by 4.6%, the highest increase of the century. “The declining revenues in the face of steep cost increases disproportionately affect small, independent, and rural physician practices, as well as those treating low-income or other historically minoritized or marginalized patient communities,” Ehrenfeld said. “Patients and physicians will wonder why such thin gruel is being served.”

American Academy of Family Physicians President Steven Furr, MD, FAAFP, said in a statement that the reduction to the conversion factor will result in “untenable payment cuts for family physicians and reiterates the urgent need for long-term Medicare payment reform.” He called on Congress to enact annual inflationary adjustments to the PFS and loosen budget neutrality requirements.

At the same time, Furr praised elements of the PFS it says bolster primary care, particularly implementation of the G2211 add-on code. Furr said the code will more appropriately value the “complex, continuous” services family doctors provide, such as managing chronic conditions, modifying medication doses and providing preventive services and healthy lifestyle counseling. He called it “an investment in better patient access and better patient health outcomes.”

The American College of Physicians (ACP), which represents internists, largely echoed the AAFP’s response. In a statement from President Omar T. Atiq, MD, MACP, it called implementation of code G2211 “a step in the right direction” since it “better recognizes the resources necessary to provide patients with longitudinal, continuous care.”

At the same time, Atiq said, the ACP remains concerned about Medicare’s financial instability and the risk it poses to patients’ access to care. He added that the PFS is the only part of Medicare that doesn’t get annual inflation adjustments, with the result that inflation-adjusted payment rates have fallen by 26% since 2001.

The Medical Group Management Association, in a statement from Senior Vice President of Government Affairs Anders Gilberg, condemned the conversion factor reduction while expressing relief that CMS didn’t raise the performance threshold for the Merit-based Incentive Payment System. Doing so, Gilberg said, would by CMS’s own estimates have resulted in cuts in Medicare reimbursements for a majority of eligible physicians.

“Congress must pass legislation to stop this downward spiral in the Medicare Program and at a minimum avert CMS’ 3.4% cut to the conversion factor.”

Clif Gaus, Sc.D., president and CEO of the National Association of Accountable Care Organizations (NAACOs) said the rule “finalizes several policies that support clinicians in ACOs.” Among these are improvements in quality reporting, fairer benchmarking policies, and keeping advanced payments for new ACOs who transition to risk.

Gaus also expressed disappointment that some of the policies apply only to new or renewing ACOs in 2024 and not existing ACOs.

America’s Physician Groups, which represents medical practices who are in value-based payment arrangements, praised the rule for strengthening the Medicare Shared Savings Program (MSSP). Among what it calls the “positive changes” to the rule are:

• adopting Medicare Clinical Quality Measures as an alternative collection type for MSSP ACOs, and the fact that the data completeness requirement will be 75 percent rather than 80 percent,
• delaying until 2025 the implementation of the Merit-based Incentive Payment System Promoting Interoperability performance category, and
• the new add-on payment for HCPCS code G2211, which will better recognize the resource costs associated with evaluation and management visits for primary care and the longitudinal care of complex patients.

Susan Dentzer, APG president and CEO, said the changes will “increase the odds that more health care providers will participate in the [MSSP] program.”

The American Telemedicine Association (ATA) along with its lobbying arm ATA issued a joint statement applauding the fact that the PFS final rule extends through 2024 a provision allowing telehealth providers who work from home to list their practice address on their Medicare enrollment.

“This reprieve will help to maintain the safety and privacy of physicians and removes a significant roadblock to access to care,” Kyle Zebley, the ATA’s senior vice president, public policy and executive director of ATA Action said in the statement.