Upcoming CMS changes that could hit physicians’ wallets

By Jules Murtha
Published October 19, 2021

Key Takeaways

COVID-19 has affirmed that changes and challenges are the norm in healthcare. Even so, physicians persist—for the personal reward tied to helping others, and the paycheck that comes later.

But changes to physician paychecks could be coming.

Physician fee schedule changes proposed by the Centers for Medicare and Medicaid Services (CMS) in July could hurt physicians’ incomes. The proposal will likely come to a vote in early November unless Congress decides otherwise, and doctors need to know what to expect.

Changes to CMS reimbursements

The proposal features several changes. If approved, two major modifications will bear the heaviest weight on the shoulders (and wallets) of physicians. 

As noted in a recently published Medscape article, the first rule includes a hefty payment cut to the physician fee schedule, which is already ruffling feathers. On average, Medicare payments are set to decrease by 4%, leaving physicians incensed. 

Sequestration could also make a comeback in 2022. If so, be on the lookout for automatic budget cuts that enable Medicare to reduce payments to providers by up to 2% without requiring patients to cover the difference. The financial shock of COVID-19 prompted CMS to place a moratorium on the 2% sequester, but the new proposal would lift that protection.

Impacts on physicians

The extent to which physicians could feel these changes depends on their specialty. Interventional radiologists and vascular surgeons may see a roughly -9% and -8% reduction in their incomes, respectively, while doctors in geriatrics, endocrinology, hand surgery, and family practices can expect to benefit from an increase of about 2%. Portable X-ray suppliers, who could see an estimated increase of about 10%, are the outlier. Every other specialty averages somewhere in the middle.

A proposed change to the Merit-based Incentive Payment System (MIPS) may also affect healthcare professionals. If physicians refuse to participate in MIPS, which they are legally obliged to do, they risk penalties of up to 9%. This marks an increase from the current year. In 2021, physicians could excuse themselves from participating in MIPS by submitting an application to the government, dodging penalties. But this opportunity ends with the year. Beyond that timeframe, proper MIPS protocols will remain unclear until the ruling is decided in November.

For now, physicians and everyone else can tell CMS how they feel about the proposed valuations of specific medical services. According to this detailed overview of the proposed rule changes provided by the Federal Register, CMS is asking for feedback to establish a set of potentially misvalued codes by February 10, 2022. The organization will then document said codes in the 2022 Physician Fee Schedule final rule. This helps CMS understand how to value services in future rulings, meaning physicians who feel dissatisfied have a chance to fight for more money down the road.

Greater accessibility for patients

There is some good news in the CMS proposal. In addition to the physicians who stand to reap financial rewards, the proposal could also help some patients.

Under the draft rules, Medicare is poised to cover home visits, along with many telehealth services. Tele-mental health services will also become more accessible to patients who require care at home due to conditions created by the pandemic. CMS didn’t always consider the home a permissible originating site, but COVID-19 shook up that view. The proposal would grant patients consistent access to medical care, no matter where they are. 

Patients with opioid use disorder could see some of the biggest benefits. The new rules would no longer require patients seeking opioid addiction treatment to appear on video. By allowing audio-only telehealth visits, patients would not feel the pressure to secure a space solely for telehealth services. 

Who has a say in the changing nature of healthcare?

It’s safe to say that most physicians are crossing their fingers that the CMS payment proposal does not get implemented, or that a greater legislative power overrules it. In the anxious anticipation of subsequent COVID waves, however, physicians are not remaining silent about losing their pay.

The American Hospital Association published an open letter to Congress, urging them to extend the moratorium on sequestration. Stacy Hughes, executive vice president of the American Hospital Association and author of the open letter, aims to secure the necessary funding and avoid undue budget cuts as winter approaches, bringing with it the potential for rising COVID-19 case counts. 

“The pandemic has put severe financial pressure on hospitals, including, but not limited to: higher expenses for labor, drugs, and supplies; the astronomical costs of preparing for a surge of COVID-19 patients; months of essential hospital revenue being erased due to the combination of a forced shutdown and slowdown of regular operations for non-emergent care; and the high cost of treating COVID-19 cases, which tend to be incredibly resource intensive,” Hughes wrote. “Congress should extend the moratorium on the Medicare sequester and prevent a Statutory PAYGO sequester to ensure that no reductions in Medicare payments to providers occur early next year.”

But only regulatory action, Congress, and time will tell whether the CMS proposal will pass. In the meantime, physicians can continue to express their concerns to Congress or CMS directly—and patiently wait to see how the final rule will affect their wallets.

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