ISASS Supports Letter to the HHS Requesting Elimination of Budget Neutrality Adjustments to Physician Payments for 2020

On July 1, 2020, multiple organizations, including ISASS, sent a letter to Alex Azar, secretary of Health and Human Services (HHS), to remove budget neutrality negative adjustments under the 2021 Medicare Physician Fee Schedule. The organizations indicated support for the actions of the Centers for Medicare and Medicaid Services (CMS) in last year’s Medicare physician payment final rule to utilize the American Medical Association (AMA) Current Procedural Terminology Editorial Panel coding framework, and the AMA Specialty Society Relative Value Scale Update Committee recommended values for office and outpatient visits starting January 1, 2021. The framework was the result of significant collaboration by an AMA-convened workgroup that brought together more than 170 state medical and specialty societies. CMS’ new office visit policy will lead to significant administrative burden reduction and will better describe and recognize the resources involved in office visits as they are performed today.

The letter also expressed appreciation for the actions of the HHS and its agencies to provide flexibility, regulatory relief, and financial assistance to physicians and health care professionals who are working to meet the needs of patients during the COVID-19 pandemic. The letter also expressed appreciation for HHS’ frequent outreach to the physician community and its responsiveness to recommendations, questions, and concerns. As a result of confronting the novel coronavirus in hard-hit communities and mitigating its spread throughout the country, many practices face a myriad of economic hardships.

The letter expressed concern that the financial instability created by this public health crisis will be exacerbated by budget neutrality adjustments required when CMS implements a widely supported Medicare office visit payment policy finalized for 2021. Therefore, the societies strongly urged HHS to utilize its authority under the public health emergency declaration to preserve patient access to care and mitigate financial distress due to the pandemic by implementing the office visit increases as planned while waiving budget neutrality requirements for the new Medicare office visit payment policy.

Payment reductions of this magnitude would be a major problem at any time, but to impose cuts of this magnitude during or immediately after the COVID-19 pandemic, including steep cuts to many of the specialties that have been on the front lines to treat patients in places with widespread infection, is unconscionable. Recent survey and claims analysis suggest that physician practice revenue decreased at least 50% between March and May 2020, which translates to a $70.6 billion reduction in revenue based on the AMA’s analysis of CMS’ National Health Expenditure data for 2018.

In addition, CMS loaned $40.4 billion as a lifeline to physicians, health care professionals, and other Part B suppliers during the initial phase of the pandemic through the Advanced Payment Program. Under current terms, these loans will be recouped by offsetting Medicare payments beginning in August. The letter from the organizations asked for regulatory and statutory improvements to these loan repayment terms, including a much lower interest rate, but even in the event of improved terms, many physician practices face the possibility that they will have either just finished repaying these loans or will still be in the process of repaying them when the budget neutrality cuts take effect, compounding its negative impact.

Combined, these actions would represent reasonable HHS use of its authorities and flexibilities under the public health emergency to implement the office visit increases and waive the requirement for CMS to adjust Medicare physician payments for budget neutrality when it implements the office visit coding and payment changes that it has finalized for 2021.

Read the full text here.

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