We pay a lot of attention to government regulation in healthcare, especially the Medicare Physician Fee Schedule (MPFS) that influences reimbursement not only from Medicare but also from other payors since many commercial contracts are tied to the MPFS. Although it is the object of most focus, the Centers for Medicare and Medicaid Services (CMS) is not the only agency that regulates healthcare.

 

Medicare Physician Fee Schedule

 

As of this writing, Medicare reimbursement for 2024 is nominally 3.4% lower across the board than it was in 2023 due to the statutory calculation that goes into the fee schedule conversion factor. Several pieces of legislation are pending in Congress that would modify the pricing methodology:

  • The Preserving Seniors' Access to Physicians Act of 2023 (H.R. 6683) was introduced December 7, 2023, to make a one-time adjustment to the MPFS for 2024 by returning the conversion factor to the 2023 level. Although there are 56 cosponsors, it is sitting with the House Subcommittee on Health as of December 8 with no further action.
  • The Physician Fee Schedule Update and Improvements Act (H.R. 6545) was introduced December 1, 2023, and it is with the Committee on Energy and Commerce as of December 6. It would make several short-term fixes to the fee schedule, but, more importantly, it would begin to tie the conversion factor adjustment to the Medicare Economic Index, which is a more relevant measure of practice costs.
  • The Strengthening Medicare for Patients and Providers Act (H.R. 2474) was introduced April 3, 2023. It would make a permanent change to the conversion factor calculation by tying it to the Medicare Economic Index. Although there are 82 cosponsors, it has remained in the Subcommittee on Health since April 14, 2023.

 

The conversion factor is just the beginning of the story because there are quite a few factors that go into determining the final rate that your practice is paid for Medicare services. The valuation of some procedures is revised periodically under the Relative Value Unit (RVU) system based on an assessment of the level of work and the cost of providing the procedure. In some geographic areas, changes to the Geographic Practice Cost Index (GPCI) are significant. We will analyze the impact of those various changes in an upcoming article.

 

Appropriate Use Criteria (AUC)

The MPFS Final Rule for 2024 included a suspension of the regulation what would have penalized radiologists for the failure of ordering physicians to consult AUC when ordering advanced diagnostic imaging. All Medicare contractors were recently instructed to remove national and local edits related to the AUC program as of January 1, 2025, according to a report, “CMS Puts Final Nail in the Coffin of Medicare Advanced Diagnostic Imaging AUC Program” (2024) by Tom Greeson of Reed Smith.