CMS Finalizes Deep Cuts to Medicare Payments in 2024

On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) finalized its Calendar Year (CY) 2024 Medicare Physician Fee Schedule (PFS) and the Quality Payment Program (QPP) rules. Within the fee schedule, CMS finalized cuts to the Anesthesia Conversion Factor that will only compound the financial strain that anesthesiologists are facing. Unless Congress acts to fill the gap, anesthesiologists will face significant Medicare payment cuts beginning on January 1.

The payment cuts underscore how the Medicare payment system is broken. ASA continues to engage legislative stakeholders and work across multiple medical specialties to minimize and reverse these cuts prior to the end of the year.

Fee Schedule Provisions:

The 2024 anesthesia conversion factor (CF) will be $20.4349, representing a decrease of 3.27% from the 2023 anesthesia CF of $21.1249. The 2024 RBRVS CF is $32.7442. This represents a decrease of 3.37% from the 2023 CF of $33.8872.

The CFs will affect physician payments in several ways:

• This negative adjustment also results from a statutorily mandated budget neutrality adjustment to account for changes in work Relative Value Units (RVUs). This means spending in one year needs to be balanced by reductions and CMS cannot increase or decrease expenditures by more than $20 million without triggering automatic budget neutrality adjustments.
• Unfortunately, CMS finalized the use of G2211 for the 2024 payment year. CMS previously noted that approximately 90 percent of the negative adjustment that anesthesiologists and other physicians would face is attributable to the new bonus payments for office and outpatient Evaluation and Management (E/M) codes. ASA opposed this code, noting that it is duplicative of work already accounted for by existing codes and will inappropriately result in overpayments for some physicians at the expense of payments for other important services.

*Source: Table 117: Calculation of the CY 2024 Anesthesia Conversion Factor, CY 2024 Final PFS.

Specialty Impact on Anesthesia and Pain Medicine

Actual payment rates are impacted by a range of proposed policy changes related to physician work, practice expense, and malpractice RVUs. CMS estimated these changes in Table 104 in the final rule. Impact by practice will vary based on service mix. Specialty impacts ranged from -4% for Interventional Radiology, to +3% for Endocrinology and Family Practice. The table indicates that the impact of policies in the proposed rule will have on anesthesiology and interventional pain management. Note, changes to the CF are not reflected in the impact table.

*Note: Combined Impact may not equal the sum of work, PE and malpractice due to rounding.
Source: Table 118, CY 2024 Final PFS, display copy.

Pain Medicine Code Updates

In a positive development, ASA is pleased that starting January 1, 2024, pain medicine physicians will be able to get paid by Medicare for providing percutaneous sacroiliac (SI) joint arthrodesis using an intra-articular implant(s), such as bone allograft material or synthetic devices. ASA supported the new category I code (27278) - Arthrodesis, sacroiliac joint, percutaneous, with image guidance, including placement of intra-articular implant(s) (eg, bone allograft[s], synthetic device[s]), without placement of transfixation device) was created to replace the current Category III code 0775T. Code 27278) was surveyed by the AMA/Specialty Society RVS Update Committee (RUC) which recommended a work RVU of 7.86 to CMS. For CY 2024, CMS has finalized a work RVU of 7.86 for CPT code 27278), which is the same as the RUC recommended value.

The table below reflects CMS’s proposed work RVUs for the new Arthrodesis, sacroiliac joint code.

Implementation of code G2211 (Complexity add-on code)

For CY 2024, CMS finalized that G2211 will go into effect as expected on January 1, 2024. CMS also finalized a utilization assumption of 38% for G2211, as proposed. Although CMS acknowledges public comments that urged the agency to revise this 38% utilization assumption, CMS believes that it is accurate and finalizes it as proposed. Specifically, in response to comments that CMS should reduce its utilization assumption in line with the initial utilization of the care management codes for transitional care management and chronic care management services, CMS does not believe that the utilization of these codes is an appropriate proxy for the utilization of G2211. CMS noted that approximately 90 percent of the negative 2.20 percent budget neutrality adjustment to the CF for CY 2024 is attributable to G2211.

Anesthesiologists continue to face financial pressures beyond these reductions. Medicare payments, including physician services, are also subject to across-the-board cuts due to federal budget rules. Last year, Congress passed legislation that defers until 2025 cuts of 4% that were otherwise scheduled to be implemented in 2022. Mandated by the “Pay-As-You-Go Act of 2010,” these cuts were meant to offset increases in the federal deficit. Although this legislation provided a 1.25% update to the conversion factor for CY 2024, this is less than the 2.5% update Congress approved for CY 2023. Furthermore, anesthesia groups who report and fail to meet the Merit-based Incentive Payment System (MIPS) threshold could see their Medicare payments decrease from 0.01% up to 9%, depending on their performance.

ASA is committed to advocating for changes to the broken Medicare payment system and ensure that anesthesiologists and pain medicine physicians are paid fairly. ASA has supported an inflation adjustment to Medicare payments to allow for the compensation of our physicians and other clinicians to match rising cost of living across the country. Legislation—H.R. 2474, the Strengthening Medicare for Patients and Providers Act—is now introduced in Congress to achieve this change. We are also encouraged by recent Congressional “Doc Caucus” proposals to amend the Medicare budget neutrality and implement an inflation adjustment for physicians. ASA looks forward to advocating our position before Congress and in working with CMS and other government stakeholders on proposed solutions.

Please contact [email protected] with any questions related to the Medicare Physician Fee Schedule.

Quality Payment Program Provisions:

CMS also released its 2024 Quality Payment Program (QPP) Rule. The rule provides details on how CMS intends for eligible clinicians and groups to participate in the Merit-based Incentive Payment System (MIPS), Alternative Payment Models, and other features of the QPP during the 2024 performance year. Unless congressional action is taken, clinicians identified as qualified participants in an Advanced Alternative Payment Model will receive an annual 0.75% update, and all other clinicians will receive a 0.25% annual update, along with an additional rate adjustment for relative performance in the Merit-based Incentive Payment System.

ASA advocated for CMS to maintain the MIPS performance threshold at 75 points – a position that CMS ultimately agreed.

For the 2024 reporting year:

• CMS maintained the CY 2024 MIPS performance threshold at 75 points. Scoring above 75 points would allow an individual or group a payment bonus while scoring below 75 points would result in a payment penalty in 2026.
• By law, the weights of the different MIPS requirements will not change: the quality performance category will be weighted at 30% and the cost performance category will be weighted at 30%. Promoting Interoperability and Improvement Activities performance categories will maintain their respective 25% and 15% weights.
• CMS did not make any changes to the anesthesia measure set.

As finalized last year, CMS will increase the data completeness threshold for the MIPS Quality Performance Category to 75% for the 2024, 2025, and 2026 performance years.

Anesthesiologists will continue to have the opportunity to report the Anesthesiology MIPS Value Pathway in 2024. MIPS Value Pathways, CMS believes, will alleviate some of the reporting burdens that anesthesiologists and other physicians encounter in the MIPS program. For 2024, CMS finalized adding three quality measures:

• ABG44: Low Flow Inhalational General Anesthesia
• EPREOP31: Intraoperative Hypotension among Non-Emergent Noncardiac Surgical Cases
• Q487: Screening for Social Drivers of Health

CMS added the IA_MVP: Practice-Wide Quality Improvement in MIPS Value Pathways to this MVP as well.

For more information on the Quality Payment Program, please contact the ASA Department of Quality and Regulatory Affairs (QRA) at [email protected].

ASA leaders and staff will review the rule and submit comments by the deadline. Unless otherwise noted, finalized provisions will become effective on January 1, 2024.

For more information:

• Final Rule text
• CMS Medicare PFS Final Rule press release
• ASA Medicare PFS Final Rule press release