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Analysis

Surgeons Pan Cuts in CMS' Proposed Fee Schedule for 2021

By John Commins  
   August 04, 2020

The proposed rule would reduce payments to nearly all surgical specialties, including up to 9% for cardiac surgery, 8% for thoracic surgery, 7% for vascular surgery, 7% for neurosurgery, and 6% for ophthalmology.

The Centers for Medicare & Medicaid Services late Monday issued its proposed Physician Fee Schedule for 2021 and surgeons wasted no time dissecting it.

The proposed rule, which would take effect on January 1, 2021, would reduce payments to nearly all surgical specialties, including up to 9% for cardiac surgery, 8% for thoracic surgery, 7% for vascular surgery, 7% for neurosurgery, and 6% for ophthalmology

David B. Hoyt, MD, executive director of the American College of Surgeons, called the 1,353-page proposed rule "a big disappointment for patients and surgeons."

"We support steps to expand access to care, but this rule takes one step forward and several steps back by overlooking both patients and the surgeons who care for them," he said.

CMS said the budget neutrality law mandates an adjustment to account for changes in relative value units. The proposed 2021 conversion factor is $32.26, a decrease of $3.83 from the 2020's conversion factor of $36.09.

However, CMS said the 2021 proposed rule provides about $84 billion for outpatient services, an increase of more than $7 billion over the 2020 payment.

The ACS and the Surgical Care Coalition, a group of 12 surgical professional associations, on Tuesday urged Congress to step in and stop the cuts by waiving Medicare's budget neutral mandates.     

"The middle of a pandemic is no time for cuts to any form of healthcare, yet this proposed rule moves ahead as if nothing has changed," Hoyt said.

Hoyt cited a recent in-house survey which found that one-in-three private surgical practices were already at risk of closing permanently due to the financial strain of the COVID-19 crisis.

"The healthcare system cannot absorb cuts of this magnitude," Hoyt said. "This proposed rule would move forward with significant payment cuts that will only make the situation worse and harm patients."

AMA Offers Praise, Sort Of

The American Medical Association was more receptive to the proposed rule, noting with approval the expansion of telehealth visits, paperwork reductions, coding revisions, and improved payments for office-based evaluation and management services.

"The AMA appreciates that CMS will implement significant increases to the payment for office visits, based on recommendations on resource costs from the AMA/Specialty Society RVS Update Committee (RUC)," said AMA President Susan R. Bailey, MD.

But, like the surgeons, the AMA said budget neutral provisions will wreak havoc for some healthcare providers.

"Unfortunately, these office visit payment increases, and a multitude of other new CMS proposed payment increases, are required by statute to be offset by payment reductions to other services, through an unsustainable reduction of nearly 11% to the Medicare conversion factor," Baily said.

"For this reason, the AMA strongly urges Congress to waive Medicare’s budget neutrality requirement for the office visit and other payment increases," she said. "Physicians are already experiencing substantial economic hardships due to COVID-19, so these pay cuts could not come at a worse time."

Primary Care Docs Love It!

The American College of Physicians said it "strongly supports" the proposed rule because it "recognizes the value of cognitive services in providing quality care to patients."

"Medicare has long undervalued office visit services provided by internal medicine and other cognitive and primary care physicians, and CMS's decision to move forward with higher payments for E/M services is a major step toward recognizing the importance of these services to our patients," said ACP President Jacqueline W. Fincher, MD.

"These changes are especially important at a time when many primary care practices in particular are under severe financial stress due to the COVID-19 pandemic and are at risk of closing their doors," she said.

Understanding that the budget neutrality mandates creates winners and losers among providers, ACP threw a bone to their specialist colleagues and said it would support "requests to Congress to waive budget neutrality for the 2021 Medicare Fee Schedule RVU increases, provided that this would not result in a delay or in any way undermine CMS’s decision to fully implement the E/M increases and other improvements on Jan. 1, 2021."

AHA Airs Grievances

American Hospital Association Executive Vice President Tom Nickels offered a list of grievances against the proposed rule.

"First, we adamantly oppose the proposed rule’s deepening of cuts in payments for 340B drugs," he said. "These cuts decimate the intent of the 340B program and only exacerbate the strain placed on hospitals serving vulnerable communities."

Nickels said, the cuts "also conflict with Congress' clear intent and defer to the government’s inaccurate interpretation of the law. Today's proposal will result in the continued loss of resources for 340B hospitals at the worst possible time."

Last month, a federal appeals court overturned a lower court and affirmed the Department of Health and Human Services' authority to cut payments for drugs purchased by hospitals under the 340B discount program.

Nickels also rapped "attempts to loosen the current restrictions on physician-owned hospitals."

He cited studies from the Congressional Budget Office, Medicare Payment Advisory Commission and independent researchers that have found that physician-owned hospitals have higher per capita utilization and costs for Medicare.

"Further, physician-owned hospitals tend to cherry-pick the most profitable patients, jeopardizing communities’ access to full-service care," he said. "This trend creates a destabilizing environment that leaves sicker and less-affluent patients to community hospitals, threatening the health care safety net."

AHA has also raised concerns about CMS' proposal to eliminate the inpatient-only list over the next three years, which he said was put in place to protect Medicare beneficiaraies.

"Many of the services on the inpatient-only list are surgical procedures that may be complex, complicated, and require the care and coordinated services provided in the inpatient setting of a hospital," he said. 

340B Payment Cuts

Bruce Siegel, MD, president and CEO of America's Essential Hospitals, said CMS took a bad policy on Part B drug payments and "makes it worse by digging an even deeper financial hole for essential hospitals and their vulnerable patients."

"There is no reasonable basis to further reduce payments to hospitals in the 340B Drug Pricing Program—the same hospitals that are now straining under the heavy costs of responding to COVID-19," Siegel said.

"This ill-conceived payment policy flouts congressional intent for the 340B program, undermines program savings for hospitals that operate with little or no margin, and ultimately jeopardizes access to care in underserved communities."

Like the AMA, Siegel said safety net hospitals are happy about CMS' support for telehealth services, but noted that "additional flexibilities are needed to further improve access for vulnerable communities."

“The middle of a pandemic is no time for cuts to any form of healthcare, yet this proposed rule moves ahead as if nothing has changed.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

CMS said the budget neutrality law mandates an adjustment to account for changes in relative value units.

The proposed 2021 conversion factor is $32.26, a drop of $3.83 from 2020's conversion factor of $36.09.

Surgeon are urging Congress to step in and stop the cuts by waiving Medicare's budget neutral mandates.

AMA approves expansion of telehealth visits, paperwork reductions, coding revisions, and improved payments for office-based evaluation and management services.


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