Congress Releases Year-end Legislation, Addressing Medicare Cuts and Telehealth

Originally published in the December 22, 2022, issue of MGMA’s Washington Connection
Reprinted with permission from MGMA

Earlier this week, Congress released the text of their year-end spending package, which contains a handful of healthcare provisions that will impact medical groups.

Medicare physician payment: The legislation averts 6.5% of the scheduled 8.5% reduction to physician reimbursement in Medicare, resulting in an approximate 2% cut to the Medicare conversion factor for 2023. By way of background, in 2021, CMS shifted funds in the physician fee schedule to pay for an increase in work RVUs, which raised reimbursement for office visits. This shift resulted in a decrease to the conversion factor due to a statutorily mandated budget neutrality adjustment. Congress provided funds to offset the adjustment in 2021 and partially offset it again in 2022. Going into 2023, we expected a cut of 8.5%, resulting from both a decrease to the conversion factor (4.5%) and PAYGO cut (4%). For the third year in a row, we’ve urged Congress to address the de facto cuts — this year in the form of adding 4.5% back into the fee schedule and waiving PAYGO. Unfortunately, despite 10,000 letters from MGMA members, Congress did not have the appetite to fully waive budget neutrality requirements to address the slated 4.5% cut. Instead, Congress will only partially mitigate it by allowing a 2% cut in 2023. This is in addition to legislation waiving the 4% PAYGO for 2023 and 2024. MGMA has voiced its disappointment that Congress is allowing a 2% cut to occur in 2023 and will continue working to find a more sustainable and comprehensive solution.

Alternative Payment Models (APMs): The 5% incentive bonus is set to expire at the end of this year. The legislation would extend the bonus for an additional year, through 2023, at 3.5%.

Telehealth: Many telehealth waivers, including being able to treat a patient in their home, were extended through 2024. This is positive development supported by MGMA to ensure continuity from pandemic-era telehealth policies.

Lab cuts: Pending the passage of this legislation, practices will receive a one-year reprieve from the laboratory cuts of up to 15% that would have gone into effect in January 2023. This provision was also supported by #MGMAAdvocacy.

We expect Congress to pass this legislation into law by Friday. We will let you know if Congress modifies the current text.