McDermott+ is pleased to bring you Regs & Eggs, a weekly Regulatory Affairs blog by Jeffrey Davis. Click here to subscribe to future blog posts.
October 31, 2024 – Happy Halloween! In the health policy world, there are two things on everyone’s mind this spooky season: the upcoming election and the major calendar year (CY) 2025 Medicare fee-for-service (FFS) final regs that should be issued by Friday. While these may be haunting your thoughts, you don’t need to be scared much longer, because we at McDermott+ have you covered. In the coming weeks, we will break down the CY final regs for you and provide you with our election analysis. On the election front, we are hosting a webinar on November 8, 2024, at which my colleagues Debbie Curtis and Rodney Whitlock will discuss the outcomes of the election, how to prepare your organization for policy changes under the new Administration and Congress, and the implications of election outcomes for healthcare policy going into the lame duck session of Congress and 2025. You can register here!
In the meantime, my colleague Leigh Feldman and I thought it would be useful to review some of the major themes in the annual Medicare FFS regs in both the Trump and Biden Administrations. If past is prologue, these themes could rise from the dead to inform rulemaking under a future Trump or Harris administration. So, take a walk through the rulemaking graveyard with us as we take a look at the top themes from three of the major annual regs – the physician fee schedule (PFS), the outpatient prospective payment system (OPPS), and the inpatient prospective payment system (IPPS) – going back to the start of the Trump Administration in 2017.
Trump Era Themes
Reducing Administrative Burden
In its first PFS reg under the Trump Administration, CMS highlighted its Patients Over Paperwork Initiative, which was labelled as “a cross-cutting, collaborative process that evaluates and streamlines regulations with a goal to reduce unnecessary burden, increase efficiencies, and improve the beneficiary experience.” In that spirit of reducing administrative burden, in the CY 2019 reg, CMS finalized several documentation, coding, and payment changes for office/outpatient evaluation and management (E/M) visits that were to be phased in over several years. CMS argued that these significant changes would “allow practitioners greater flexibility to exercise clinical judgment in documentation, so they can focus on what is clinically relevant and medically necessary for the beneficiary.” CMS also finalized broad modifications to its existing medical record documentation policy so that physicians, physician assistants, and advanced practice registered nurses (APRNs) could review and verify (sign and date), rather than redocumenting, notes made in the medical record by other physicians; residents; medical, physician assistant, and APRN students; nurses; or other members of the medical team.
Changes to Office and Outpatient E/M services
Office and outpatient E/M services, or the typical office visit, are the bread and butter of the PFS, representing about 20% of billable services. CMS finalized a huge payment bump for these services for CY 2021 in an attempt to increase payments for primary care providers. CMS also made significant revisions to the E/M office/outpatient code set (including finalizing a policy to pay a single rate for E/M office/outpatient visit levels 2 through 4 for established and new patients), some of which were reversed in subsequent years. CMS delayed one policy, the creation of a new add-on code for complexity (G2211) that was set to go into effect in 2021, until 2024. (CMS, under the Biden Administration, eventually implemented this code.)
Telehealth Expansions
As the COVID-19 pandemic wore on, CMS added more services to the Medicare Telehealth List each year. CMS also explored payments for remote patient monitoring and remote physiologic monitoring codes and expanded the use of telehealth services for the treatment of opioid use disorder and other substance use disorders.
Biden Era Themes
Addressing Social Determinants of Health
In CY 2024, CMS finalized new payment codes for community health integration, social determinants of health (SDOH) risk assessment, and principal illness navigation services to account for resources when clinicians involve certain types of healthcare support staff, such as community health workers, care navigators, and peer support specialists, in furnishing medically necessary care. Most recently, in the CY 2025 PFS proposed rule, CMS sought comment on how to expand the use of these codes going forward.
Telehealth Changes
CMS continued to add codes to the Medicare telehealth list but also increased its focus on trying to phase out COVID-19 era policies and flexibilities. That was easier said than done, and many of these policies are still in effect today. For example, CMS added many codes to the Medicare telehealth list “temporarily” during the public health emergency (PHE), but each year after the PHE expired, CMS decided to extend the time these codes would remain on the list (around one year at a time). In the CY 2025 PFS proposed rule, CMS proposed to keep the PHE-era codes on the list through the end of 2025 after they previously were kept on the list through at least the end of 2024. CMS also restructured the process for adding new codes to the telehealth list, attempting to clarify and simplify the categories CMS has in place to assess telehealth code proposals.
Payment for Dental Services
Historically, Medicare has paid for dental services in some clinical circumstances when dental services are inextricably linked to the clinical success of a specific covered medical service. Under the Biden Administration, CMS used annual rulemaking to embark on a multiyear process to expand the circumstances in which dental care could be covered under Medicare. This policy focus reflected a key Biden Administration priority: improving oral health care.
Trump Era Themes
Reduced Payments for Drugs Acquired Through the 340B Program
In the CY 2018 OPPS rule, its first OPPS rule out of the gate, the Trump Administration finalized a major site-neutral policy: an adjustment to payment for drugs acquired through the 340B Program. In the CY 2018 rule, CMS said that to address recent trends of increasing drug prices and lower costs of drugs for Medicare beneficiaries, it would pay for separately payable, non-pass-through drugs and biologicals purchased through the 340B Program at the average sales price (ASP) minus 22.5% rather than ASP plus 6%, offset by a $1.6 billion redistribution of payments for non-drug items and services across the OPPS. The US Supreme Court eventually reversed this policy.
Site-Neutral Payments
In the CY 2019 OPPS rule, CMS, under the Trump Administration, used its “method to control for unnecessary increases” authority to apply a PFS-equivalent payment rate for clinic services – the most common service billed under the OPPS – when furnished at an off-campus provider-based department.
Moving Procedures to Less Acute Settings
Under the Trump Administration, CMS used OPPS rulemaking to institute changes to the inpatient-only (IPO) list and the ambulatory surgical center (ASC) covered procedures list (CPL) to allow Medicare to pay for services when furnished in less acute settings.
In its first OPPS rule, the Trump Administration removed total knee arthroplasty and five other procedures from the IPO list, paving the way for these procedures to be performed on an outpatient basis. In the CY 2020 OPPS rule, the Administration removed total hip arthroplasty, six spinal surgical procedures, and certain anesthesia services from the list. By the time of its final OPPS rule, the CY 2021 rule, the Administration finalized its proposal to eliminate the IPO list entirely over a three-year period, beginning with 300 primarily musculoskeletal-related services.
On the ASC side, in CY 2019, the Trump Administration added 12 cardiovascular codes to the ASC CPL, meaning that the services would be newly payable when furnished in that setting. In CY 2020, CMS added total knee arthroplasty, knee mosaicplasty, and six additional coronary intervention procedures to the list. In CY 2021, the Administration continued its addition of services to the ASC CPL with 11 more procedures, including total hip arthroplasty. The Administration also finalized changes to the criteria it used to add covered surgical procedures to the list, resulting in the addition of 267 surgical procedures.
Biden Era Themes
Reversing Trump Administration Policies
Under the Biden Administration, CMS spent several OPPS rulemaking cycles reversing the previous Administration’s policies. In the first OPPS rule of the new Administration, for CY 2021, CMS reinstated the IPO and added back services that had been removed. It similarly reinstated the criteria that had been in place for adding procedures to the ASC CPL. In light of the Supreme Court’s decision in American Hospital Association v. Becerra, CMS also reversed its policy regarding payment for drugs acquired through the 340B Program, finalizing rates consistent with drugs not acquired through the program.
Post-PHE Policies
The Biden Administration took steps through its OPPS rulemaking to address policy priorities that surfaced during the COVID-19 PHE. In the CY 2023 OPPS rule, CMS finalized a policy to cover and pay for behavioral health services furnished remotely by hospital staff as hospital services under the OPPS. This had been a PHE-specific policy permitted through CMS’s Hospital Without Walls Initiative and would have ended with the expiration of the PHE. CMS also finalized payment increases for the additional costs to hospitals of purchasing domestically produced N95 respirators.
Trump Era Themes
New Pathways for Add-On Payments
Under the Trump Administration, CMS used its IPPS rulemakings to establish additional payment pathways for new technologies. In the fiscal year (FY) 2020 IPPS rule, CMS finalized new add-on payments for US Food and Drug Administration (FDA) approved breakthrough devices and for antimicrobial products designated by the FDA as qualified infectious disease products. In the FY 2021 IPPS rule, CMS further expanded add-on payments for antimicrobials to include products approved under FDA’s Limited Population Pathway for Antibacterial and Antifungal Drugs.
Increased Payments to Rural Hospitals
To address perceived disparities between high and low wage index hospitals in the IPPS, the Trump Administration’s FY 2020 IPPS rule finalized a policy to increase the wage index for hospitals with a wage index value below the 25th percentile.
Biden Era Themes
Addressing Maternal Health
Under the Biden Administration, CMS used IPPS rulemaking to address maternal morbidity and mortality. In the FY 2023 rule, CMS established a “Birthing-Friendly” hospital designation – a publicly reported, public-facing hospital designation on the quality and safety of maternity care.
Addressing SDOH and Health Equity
The Biden Administration used IPPS rulemaking to advance data measurement around health equity. In the FY 2024 IPPS rule, CMS added 15 new health equity hospital categorizations to its payment impacts. CMS also increased the severity designation of the three ICD-10-CM diagnosis codes describing homelessness, a SDOH, to increase payments to hospitals for these cases.
These are just a few of the major themes from each of the major regs. Juxtaposing the themes from each of the Administrations is telling: it reveals each Administration’s overarching policy agenda.
So, what does the future hold for these regs under a second Trump Administration or a Harris Administration? Our rulemaking review also reveals where the current Administration reversed the policies of the previous one, and where it decided to build on what the previous Administration had started. For example, while CMS under the Biden Administration rolled back some of the Trump-era policies around site-of-service, it continued to focus on some of the same areas as Trump’s CMS (expanding telehealth, additional payments for complex services, etc.)
If former President Trump were to win the election, we believe that would happen again: CMS would continue building out some policies while reverting to its previous position on others. For example, although telehealth would still be a priority, CMS would likely shift back to its focus on reducing administrative burden and improving rural healthcare. Conversely, a Harris Administration would likely build on the Biden-era policies, and many of the themes we’ve seen over the last several years would be revisited (perhaps with a twist as the new policy officials added their own perspectives to each of the issues).
Now we can only wait and see what policies (either new or resurrected) lie in store for us.
Until next week, this is Jeffrey (and Leigh) saying, enjoy reading regs with your eggs (and candy?). Enjoy the holiday!
For more information, please contact Jeffrey Davis. To subscribe to Regs & Eggs, please CLICK HERE.
