Medicare Physician Fee Schedule needs changing, but not to make physicians violate the law

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Changing the Medicare Physician Fee Schedule (PFS) could create accounting difficulties that in turn become illegal actions under the letter of the law.

For weeks, medical organizations have been banging the drum to spur Congress to amend the 2024 PFS to restore a 3.4% cut from the 2023 reimbursement rate.

Until then, contractors will start processing 2024 Medicare Part B claims under the new, lower rate. If Congress restores the reimbursement, that could become a paperwork headache that potentially violates the law.

The Medical Group Management Association (MGMA) outlined the scenario in a letter this week to Chiquita Brooks-LaSure, administrator of the U.S. Centers for Medicare & Medicaid Services, and Christi A. Grimm, inspector general of the U.S. Department of Health and Human Services.

With congressional action, any claims from 2024 will be repriced, with payments adjusted and allowable copays increased, said the letter by Anders Gilberg, MGMA senior vice president for government affairs.

“In that scenario, physician practices will be faced with rebilling patients an additional increment which could in some cases be less than $1.00 and in many, if not most, cases will be small amounts that are less than the administrative cost of rebilling,” Gilberg said in the MGMA letter. “Such rebilling will leave patients confused, and providers will be blamed even though rebilling is necessary through no fault of their own.”

What’s worse: If providers forego the incremental copay, they risk violating federal law that prohibits health care providers from offering valuable gifts to influence beneficiaries in choosing Medicare or Medicaid providers, according to MGMA.

If the congressional action happens, MGMA suggested three solutions to avoid the scenario:

• CMS and OIG could advise the physician community that failure to bill small amounts, for example, up to $15 per claim, is not considered remuneration to beneficiaries.
• OIG could promulgate a waiver of the statute for the small co-pays for a limited time.
• OIG could announce it will use its discretion not pursue enforcement actions for the small co-pays.

MGMA outlined five reasons why the bills would not be inducements to influence beneficiaries.

For example, the rebilled co-pays would be for services already rendered; they would not be advertised or promoted as incentives to recruit new patients or provide new services. If applied to all providers, the legal technicality would have no significant effect on market competition.

The legal waiver would apply “only to a very narrow slice of billings,” from Jan. 1 to the time Congress takes action. The amounts involved would be relatively small, with MGMA suggesting $15 to match OIG’s existing legal limit on one-time, non-cash gifts to beneficiaries.

The relief would have no effect on cost-sharing for most beneficiaries because many would have no claims during the limited relief window, and many others would not yet meet their annual deductibles. The full cost of the reprocessed claims would be charged against the deductible, according to MGMA.