College advocacy largely averts Medicare pay cut

College advocacy largely averts Medicare pay cut

As you know, many allergists were facing reductions in Medicare payments that could have been as high as 9.75% beginning Jan. 1 if Congress did not step in to pass legislation to prevent them. Thanks to the College’s advocacy efforts – along with the efforts of other physician organizations – the majority of those cuts have been averted for 2022. Legislation passed today prevents Medicare from imposing 9% of the 9.75% planned Medicare payment reductions scheduled for Jan. 1.

Thanks to those of you who reached out to Congress in support of this legislation and to those who signed on to our advocacy letter during the College’s Annual Meeting – it worked!

Here’s a summary of the new changes:

  • We’ve achieved a temporary waiver of the 2% sequestration on Medicare Fee-for-Service claims. The 2% sequestration of Medicare Fee-for-Service claims will be waived completely from January – March of 2022. Following that, it will be adjusted to 1% for April – June of 2022 and it will be restored to 2% on July 1, 2022.
  • The scheduled 3.75% reduction in the Medicare Conversion Factor (CF) will be revised to a 0.75% reduction for 2022.
  • The statutory PAYGO law, which was estimated to reduce Medicare payments by 4%, will be temporarily waived by Congress for 2022.

It should be noted that Congress has also approved an increase in the 2% sequester that has been in place since 2011. Beginning in 2030, this will become 3%. So, instead of providers receiving 78.4% of the Medicare allowable amount (80% X .98), providers will receive 77.6% of the Medicare allowable amount (80% x .97).

Conversion Factor
In 2020, the Centers for Medicare and Medicaid Services (CMS) increased the value of the Evaluation and Management (E/M) Codes to reflect updated and more current data. This update was long overdue. However, in making this adjustment, CMS also had to reduce the value of other codes in order to keep Medicare spending within the approved budget.

The Advocacy Council advocated for the increased valuation of the E/M Codes but was disappointed that the value of other codes had to be reduced to accommodate the E/M adjustment.

The Advocacy Council, the AMA and several physician specialty societies requested that Congress prevent payment reductions. In response, legislation was approved last year to provide an across-the-board 3.75% increase in the Medicare Conversion Factor (CF). However, this “bump up” was only for 2021. Without Congressional intervention again this year, the full effect of the E/M adjustments would have been felt by several physician specialties (including allergy).

This new legislative agreement would raise the CF by 3% for 2022. This does not eliminate the reduction completely but lessens the adverse impact of the E/M cuts. The same problem will recur in 2023. It seems likely that a similar (albeit smaller) “bump up” could occur at the end of 2022 to once again lessen (but not eliminate) the impact of the reduction in 2023. This “glide path” approach would result in the full impact of the E/M cuts taking effect in 2024.

Statutory PAYGO
Finally, Congress is going to temporarily waive an additional sequester order due to what is referred to as “statutory PAYGO.” Statutory PAYGO is a law enacted more than 10 years ago that requires Congress to offset deficit spending with automatic cuts to certain mandatory spending programs such as Medicare. The American Rescue Plan, passed by the new Democratic Congress and signed by President Biden earlier this year, added to the deficit, thus triggering the PAYGO cuts. It is estimated that if PAYGO is fully enforced, it would cut 4% from the Medicare program. Congress agreed to waive PAYGO for one year.