2024 Physician Fee Schedule Final Rule Impacts Medicare Shared Savings Program

The Centers for Medicare & Medicaid Services (CMS) released the Physician Fee Schedule (PFS) Final Rule for calendar year (CY) 2024 on November 2, 2023.

The 2024 PFS Final Rule includes refinements to the Medicare Shared Savings Program (MSSP), building on the CY 2023 PFS Final Rule as well as concerns voiced by accountable care organizations (ACO) and other key stakeholders.

The rule also includes refinements to the Quality Payment Program (QPP) measure sets and confirms that the performance threshold for 2024 will remain at 75 points.

Key Updates for MSSP ACOs

CMS streamlined or otherwise changed several elements of the program. The following are key changes healthcare organizations should note.

Moving ACOs Toward a Digital Measurement of Quality

To encourage ACOs to move toward digital measurements of quality, CMS is establishing a new data collection type called Medicare Clinical Quality Measures (CQM) for ACO participants reporting under the Alternative Payment Model (APM) Performance Pathway (APP).

The Medicare CQM is intended to be a transitional data collection type that helps ACOs build the infrastructure, skills, knowledge, and expertise required to report the all-payer, all-patient Merit-based Incentive Payment System CQMs (MIPS CQM) or electronic CQMs (eCQM).

This change gives ACOs the option to digitally report on their Medicare patients only and helps prevent them from being penalized for serving other patients. The data completeness requirement will be 75% through 2026.

CMS will provide all ACOs with a list of beneficiaries eligible for Medicare CQM reporting each quarter throughout the performance year. This cadence will allow ACOs to compile data throughout the performance year, and to facilitate activities that improve health and aid in patient record matching.

This rule will not supplant other methods for reporting quality data in 2024; ACOs can still report using the CMS Web Interface measures, MIPS CQM, or eCQM collection types.

In performance year 2025, ACOs will have the option to report quality data using eCQMs, MIPS CQMs, or Medicare CQMs collection types, and notably, the CMS web interface will no longer be available. It’s important for Medicare ACOs to begin preparing for this requirement in program year 2024, if they haven’t already.

Expanding Health Equity Adjustment to Medicare CQMs

ACOs that report the three Medicare CQMs—or a combination of eCQMs, MIPS CQMs, and Medicare CQMs—while also meeting data completeness standards and administering the Consumer Assessment of Health Providers and Systems (CAHPS) for MIPS survey will be eligible for a health equity adjustment to their quality performance category score when calculating shared savings payments. This will encourage ACOs to transition to the digital reporting methodology.

The 2024 PFS rule will modify the health equity adjustment underserved multiplier. CMS is finalizing policies to recognize beneficiaries with partial year rather than full year of Medicare Part D low-income subsidy (LIS) enrollment or dual eligibility for Medicare and Medicaid. This is a further incentive for ACOs to serve this population.

Adjusting the Benchmarking Methodology

CMS is finalizing proposed changes to eliminate negative regional benchmark cost adjustments to encourage further participation by ACOs serving medically complex and high-cost populations. This will benefit any ACOs that had a negative regional adjustment under the methodology outlined in prior rulemaking, such as those serving patients whose total cost of care is higher than that of the local region. This will also impact prior savings adjustments, as CMS will offset the regional adjustment by the prior savings adjustment if the value is negative.

CMS also finalized changes to the financial benchmarking methodology for ACOs in agreement periods beginning in 2024, and in subsequent years, to apply a symmetrical cap to risk score growth within the ACO and an ACO’s regional service area. This includes modifying the calculation of the regional component of the three-way blended benchmark update factor, weighted one-third Accountable Care Prospective Trend and two-thirds national-regional blend.

The changes are expected to improve the accuracy of the regional update factors for ACOs operating in areas with high hierarchical condition category (HCC) risk score growth and maintain a disincentive against coding intensity for ACOs with high market share, by adjusting the regional risk score growth cap based on ACO market share.

Adoption of a new CMS-HCC Risk Adjustment Model (V28)

In March of 2023, CMS announced that the Medicare Advantage program would transition to an updated 2024 CMS-HCC risk adjustment model (V28). To avoid negative impacts on ACOs that serve higher-risk populations, CMS confirmed it will apply the same CMS-HCC risk adjustment model used in the performance year for all benchmark years, for agreement periods beginning on January 1, 2024, and going forward.

MSSP will mirror the three-year phase-in approach used by Medicare Advantage. This means that in performance year 2024, the underlying model will be weighted 67% toward the current 2020 CMS-HCC risk adjustment model (V24), and 33% toward the new 2024 model (V28).

Adding a Step to the Beneficiary Assignment Methodology

This rule will modify the assignment methodology and definition of an assignable beneficiary.

This change allows Medicare fee-for-service beneficiaries who receive primary care from nurse practitioners, physician assistants, and clinical nurse specialists during the 12-month assignment window and who received at least one primary care service from a physician in the preceding 12 months to be eligible to be assigned to an ACO. This will be the third step in the beneficiary assignment methodology.

The intent is to increase the number of beneficiaries in the assignable population, especially among more underserved communities. It’s estimated that this change will increase the assignable beneficiaries by more than 760,000, nationwide. This change also aligns with HHS’ Initiative to Strengthen Primary Care by better recognizing and considering the variety of clinicians who participate in the delivery of high-quality primary care. This change will come into effect for the 2025 performance year.

Expanding the Primary Care Services Definition Used for Attribution

Additionally, this final rule expands the definition of primary care services that can be used for beneficiary assignment.

These services now include the following:

  • Smoking and Tobacco-use Cessation Counseling Services CPT codes 99406 and 99407
  • Remote Physiologic Monitoring CPT codes 99457 and 99458
  • Cervical or Vaginal Cancer Screening HCPCS code G0101
  • Office-Based Opioid Use Disorder Services HCPCS codes G2086, G2087, and G2088
  • Complex Evaluation and Management services Add-on HCPCS code G2211*
  • Community Health Integration (CHI) services HCPCS codes GXXX1 and GXXX2*
  • Principal Illness Navigation (PIN) services HCPCS codes GXXX3 and GXXX4*
  • SDOH Risk Assessment HCPCS code GXXX5*
  • Caregiver Behavior Management Training CPT codes 96202 and 96203*
  • Caregiver Training services CPT codes9X015, 9X016, and 9X017*

*If finalized under the Medicare FFS payment policy.

Modifications to Advance Investment Payments (AIP) Policies

The 2024 PFS final rule includes several technical modifications and refinements to Advance Investment Payments (AIP) policies to better prepare for initial implementation beginning January 1, 2024. This includes:

  • Allowing ACOs that are prepared to progress to performance-based risk to advance to two-sided model levels within the BASIC track’s glide path, beginning in performance year three of the agreement period in which they receive AIP.
  • Only recouping AIPs from shared savings of an ACO that wishes to renew their participation in MSSP early, instead of directly recouping payments from the ACO.
  • Requiring ACOs to report spending plan updates and actual spend information to CMS in addition to publicly reporting the information.
  • Modifying the termination policies to specify that CMS would immediately terminate AIPs to an ACO for future quarters if the ACO voluntarily withdraws participation from the MSSP.
  • Codifying that ACOs receiving AIPs may seek reconsideration review of all payment calculations.

Other Notable Quality Payment Program Updates

Other notable updates in the 2024 Final PFS Rule impacting the annual quality reporting process for ACOs and other MIPS reporters include:

  • Requiring the administration of the CAHPS for MIPS survey in both English and Spanish
  • Maintaining the MIPS performance threshold at 75 points for performance year 2024
  • Establishment of a measure set inventory of 198 MIPS quality measures
  • Providing ACOs with the 40th percentile MIPS Quality performance category score prior to the start of that performance year

The 40th percentile MIPS Quality score is used as the minimum quality performance threshold for a given performance year. Providing this information in advance will increase transparency and help ACOs understand and meet quality goals, allocate resources effectively, and ultimately support patients and improve quality outcomes.

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To learn more about 2024 PFS Final Rule and how it impacts your organization, contact your Moss Adams professional.

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