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Over the course of three weeks CMS has made a series of Medicare announcements that arguably contain the most sweeping changes to the Medicare program proposed thus far by the Biden Administration. With final Medicare payment rules on the horizon, CMS is poised to further the Biden Administration鈥檚 directional imprint on the Medicare program. The recent releases include:

• A focused on rural hospitals designed to preserve 鈥揳nd likely expand 鈥� access to services in rural communities;
• A proposed payment and policy for outpatient and ambulatory care services also lays the groundwork for new transparency and competition initiatives;
• Significant to most aspects of Medicare鈥檚 accountable care organizations; and
• New opportunities to support oncology providers in moving towards a whole person approach to services through the .

For this blog our HMA experts focus on the 2,000+ page Calendar Year (CY) 2023 Medicare Physician Fee Schedule (PFS) proposed released to the public on July 7, 2022. The Medicare Physician Fee Schedule and its accompanying proposed policy changes is a significant tool CMS uses to advance annual updates in reimbursement policy and to consider other policy changes in traditional Medicare that have implications for the program writ large.

Generally, in the CY 2023 proposed rule the Administration is continuing to broaden and deepen the way it applies its health equity framework to the entirety of the proposals, strengthens access to behavioral health services, and reinvigorates value-based care through the Medicare Shared Savings Program鈥檚 (MSSP) Accountable Care Organizations (ACOs) structure.

The rule includes a myriad of other policy proposals. We highlight a few of the key ones below. For example, CMS must make updates to the physician fee schedule conversion factor which has ripple effects throughout the Medicare program. The agency is also proposing updates to reimbursement for certain telehealth services and coverage enhancements for hearing and dental services, among many others proposals.

Key Action Items for Stakeholders

All comments to the rule are due to CMS by September 6, 2022. CMS plans to publish the final rule in late fall 2022.

The public comment opportunity is essential for CMS to deepen its understanding of the impact of the proposals. The agency considers stakeholders鈥� concerns, questions, and other feedback as it makes decisions on which proposals to finalize, modifications to the proposals, or to defer implementation.

This is also an important window of opportunity during which stakeholders can analyze the impact of the proposals and the business decisions these may require, plan advocacy around the proposed changes, and prepare for implementation which generally will occur on January 1, 2023.

Many leading national provider organizations are making their concerns with the annual payment update a central piece of their advocacy agenda in Congress. These concerns will add to the long list of structural issues that Congress is expected to debate leading up to and well after this year鈥檚 mid-term elections. However, providers still need to weigh the inflation pressures and uncertainty surrounding Congress鈥� ability to intervene with new opportunities in the Medicare program and Medicare Advantage market.

Medicare Shared Savings Program

CMS proposes significant changes to the Medicare Shared Savings Program (MSSP), which aredesigned to accelerate provider and Medicare beneficiary participation in accountable relationships. Last year, CMS established a goal of all Medicare beneficiaries will be in a care relationship with accountability for quality and total cost of care by 2030. These proposals are designed to make further progress on achieving that goal. First, CMS proposes several changes to MSSP which respond to criticisms that the program is not sufficiently flexible to support Medicare providers who may have different levels of sophistication with respect to risk-sharing and available capital for practice transformation. Additionally, it reflects federal officials understanding of the impact social care services can have on Medicare beneficiary health and well-being.

Proposed changes to the MSSP include the following:

• Investment in New Accountable Care Organizations (ACOs): CMS proposes to provide a one-time fixed payment of $250,000 and quarterly payments for the first two years of the 5-year agreement period for certain ACOs. Eligible ACOs are those that are low revenue ACOs, inexperienced with performance-based risk Medicare ACO initiatives, new to MSSP and that serve underserved populations.
  • The initial application cycle to apply for advance investment payments will occur during CY 2023 for a January 1, 2024, start date.
  • The advance investment payments would increase when more beneficiaries who are dually eligible for Medicare and Medicaid or who live in areas with high deprivation or both, are assigned to the ACO.
  • The advance investment payments would be recouped once the ACO begins to achieve shared savings in their current agreement period and in their next agreement period, if a balance persists. If the ACO doesn鈥檛 achieve shared savings, CMS would not recoup the funding.
  • Funds would be available to address the social and other needs of people with Medicare.
• CMS would also provide greater flexibility in the progression to performance-based risk for new ACOs to ease the transition to and likelihood of success under risk arrangements. Specifically, for ACOs with agreement periods beginning on January 1, 2024, and in subsequent years, ACOs inexperienced with performance-based risk could participate a one-side risk model for up to 7 years.
• Current ACO Participants: For performance years beginning January 1, 2023, and in subsequent years, CMS may allow certain currently participating ACOs to elect to continue in their glide path agreement.
  • CMS intends to incorporate an adjustment for prior savings that would apply in the establishment of benchmarks for renewing ACOs and re-entering ACOs
• CMS also is proposing several changes to the benchmark methodology to better support long term participation in MSSP and less capitalized ACOs for agreement periods beginning January 1, 2024. 聽This includes adjusting the benchmark for prior savings and reducing the impact of the negative regional adjustment.
  • CMS also plans to include a fixed, prospectively projected administrative growth factor (referred to in this proposed rule as the Accountable Care Prospective Trend (ACPT)), into a three-way blend with national and regional growth rates to update an ACO鈥檚 historical benchmark for each performance year (PY) in the ACO鈥檚 agreement period.
• CMS requested comments on alternative benchmarking policies: a) exclude the ACO鈥檚 own assigned beneficiaries from the assignable beneficiary population used in regional expenditure calculations, b) expand the definition of the ACO regional service area to use a larger geographic area to determine regional FFS expenditures, or c) both.
• Beginning on January 1, 2023, and subsequent years, CMS is planning to change the all-or-nothing approach to determining an ACO鈥檚 eligibility for shared savings based on quality performance to allow for scaling of shared savings rates for ACOs that fall below the 30th/40th percentile quality standard threshold required to share in savings at the maximum sharing rate. To be eligible ACOs must meet minimum quality reporting and performance requirements.
• CMS also plans to update MSSP quality-measurement policies, including a new health equity adjustment that would award bonus points for high quality measure performance and serving higher proportions of underserved or dually eligible beneficiaries.

Behavioral Health Changes

The CY2023 MPFS also seeks to enhance access to behavioral health services and strengthen the behavioral health model within the Medicare program. The proposals include:

• Creating an exception to supervision requirements, allowing marriage and family therapists, licensed professional counselors, addiction counselors, certified peer recovery specialists, and others to provide behavioral health services while being under general supervision rather than 鈥渄irect鈥� supervision.
• Paying psychologists and social workers to help manage behavioral health needs as part of the primary care team.
• Establishing new payments for team-based, comprehensive management and treatment of chronic pain.
• Enhancing the ability of ACOs to address social, behavioral, and physical health care needs, by making advanced shared savings payments to new, smaller ACOs. CMS states these funds could be used to hire behavioral health practitioners and address the social needs, such as food and housing.
• Clarifying Opioid Treatment Programs may bill Medicare for services performed by mobile units without obtaining a separate registration and increasing payment rates to Opioid Treatment Programs.

These proposed changes represent a major shift in traditional Medicare鈥檚 coverage of behavioral health services. If finalized and in combination with changes to coverage for telehealth services, these could have a meaningful impact for Medicare beneficiaries including those in rural communities. ACOs, health systems, and other providers may have greater opportunities to include behavioral health practitioners in their model of care.

Payment Issues

Payments to physicians through the PFS are proposed to decline by roughly 4 percent from CY 2022 to CY 2023. The bulk of this decline stems from CMS鈥檚 proposal to reduce the PFS conversion factor (CF) by nearly 4.5 percent.  In dollar terms the proposed 2023 CF would be $33.08, which is $1.53 lower than the 2022 CF. This policy change to the CF reflects three dynamics, two of which are changes directly mandated by the U.S. Congress:

• Expiration of a statutory one-year 3 percent increase in payments,
• A statutory 0 percent payment update for CY 2023, and
• A budget neutrality adjustment across all billing codes resulting from modifications to PFS weights which increased the relative value of primary care billing codes.

Payment changes contained within the CY 2023 proposed rule result in differential impacts for individual physician service codes and physician specialties. While payment rates for many codes are proposed to decline uniformly by roughly 4 percent, payment rates for some services codes may decline more, such as for some physician inpatient hospital care codes that may decline more than 10 percent. In the context of physician specialty type, CMS estimates 5 percent payment increases on average for infectious disease and a 3 percent increases on average for internal medicine and geriatrics. By contrast, CMS estimates a 2 percent decline on average for clinical psychology and a 3 percent decline on average for radiology.   

Notable Issues for Stakeholder Consideration

In addition to the major structural and financing issues discussed above, the wide-ranging rule contains numerous other policy proposals with direct and indirect implications on Medicare providers, and beneficiaries, and other stakeholders. Table 1 provides a snapshot of some of the issues that warrant further consideration.

 Table 1. Other Notable Proposed Changes Impacting Health Care Providers and Stakeholders

The HMA Medicare team will continue to analyze these proposed changes. We have the depth and breadth of expertise to assist with tailored analysis, to model policy impacts, and to support the drafting of comment letters to this rule.

This week, our In Focus section reviews the new Center for Medicare and Medicaid Innovation (CMMI) model named the Enhancing Oncology Model (EOM), released on June 27, 2022, by the Centers for Medicare & Medicaid Services (CMS). This new physician specialty model builds off the previously implemented Oncology Care Model (OCM). The EOM incentivizes the coordination of care and the improvement of care quality for Medicare patients undergoing cancer treatment. The model also seeks to reduce Medicare fee-for-service spending for oncology services, because oncology services are an area of high spending within the Medicare program. As a part of the EOM model participating physician practices will be held accountable for financial and performance targets during six-month episodes of care for systemic chemotherapy administration to patients with common cancer types. The EOM will run for five years beginning on July 1, 2023. Applications to EOM are currently open and will close on September 30, 2022.

CMS indicated that EOM supports President Biden鈥檚  initiative to improve the experience of people and their families living with and surviving cancer. EOM aligns with the Cancer Moonshot pillars and priorities of supporting patients, caregivers, and survivors, learning from all patients, targeting the right treatments for the right patients, and addressing inequities.

Consistent with CMS priorities, EOM also has a strong health equity focus and oncology practices who care for underserved beneficiaries are encouraged to apply.

Design of EOM

EOM is built off the foundation of OCM which ran from July 1, 2016, through June 30, 2022. CMS previously solicited feedback from the oncology community and other interested stakeholders on an OCM successor model. Those lessons plus an alignment with CMMI鈥檚 strategy refresh priorities of moving to total cost of care accountable models and making cancer care more affordable and accessible created the foundations for the design of the model.

Under EOM, participating Physician Group Practices (PGPs) will take on accountability for their patients鈥� health care quality and for total Medicare Parts A and B and certain Part D spending during six-month episodes of care.  Eligible Medicare patients are those with certain cancers (breast cancer, chronic leukemia, small intestine/colorectal cancer, lung cancer, lymphoma, multiple myeloma, and prostate cancer) receiving chemotherapy treatment.

• Participating practices may bill for a Monthly Enhanced Oncology Services (MEOS) ($70 per month) payment for Enhanced Services provided to eligible beneficiaries. The MEOS payment will be higher ($100 per month) for beneficiaries dually eligible for Medicare and Medicaid.
• Enhanced services are
  • Provide EOM beneficiaries 24/7 access to an appropriate clinician who has real-time access to the EOM participant鈥檚 medical records.
  • Provide patient navigation, as appropriate, to EOM beneficiaries
  • Document a care plan for each EOM beneficiary that contains the 13 components in the Institute of Medicine (IOM) Care Management Plan applicable to the EOM beneficiary
  • Treat EOM beneficiaries with therapies in a manner consistent with nationally recognized guidelines
  • Identify EOM beneficiary social needs using a health-related social needs screening tool
  • Gradual implementation of electronic Patient Reported Outcomes (ePROs)
• Participants will be required to take on downside financial risk from the start of the model (with the potential to owe CMS a performance-based recoupment).聽If participants successfully meet quality and savings targets, they will have the opportunity to earn a retrospective performance-based payment (PBP). These amounts will be based on actual practice performance.
• CMS has not yet specified the quality measures for this model. Instead, the application says the EOM quality strategy will focus on the following domains: patient experience, avoidable acute care utilization, management of symptoms toxicity, management of psychosocial health, and management of end-of-life care. CMS will prioritize measures that; reflect national priorities for quality improvement and patient-centered care, are outcomes-based measures (including those collected from patients), minimize EOM participant burden where possible, and align with CMS and Innovation Center quality strategy.
• Health equity provisions of the EOM include requiring oncology practices to screen for health-related social needs (HRSNs), CMS providing data reports on patient expenditures and utilization for to help health care professionals identify and address health disparities, and CMS increasing reimbursement for the provision of Enhanced Services to patients who are dually eligible for Medicare and Medicaid.
• CMS also will issue payment waivers and benefit enhancements to provide additional flexibility to practices in the way they deliver care to patients. Expected enhancements include telehealth, post-discharge enhancements, and care management home visits.

CMS has designed EOM as a multi-payer model. Medicare Advantage plans, state Medicaid plans and other payers are invited to apply to enter into a Memorandum of Understanding with CMS to align on incentives for oncologists to improve care to their patients and increase participation in value-based care arrangements.

What鈥檚 Next

CMS intends to release additional information about EOM payment methodologies later this summer. CMS also will be hosting several upcoming webinars regarding the payment methodology, quality strategy and general application support office hours before the application due date of September 30, 2022. CMS intends to select participants later this year or early next year and will implement the EOM on July 1, 2023.

For more information about this new model and how providers and payers can apply to it, please contact our Medicare experts below. To access the EOM application and other model materials, you may visit .