A look at what policy changes to expect this year.
A new year comes with a raft of uncertainties and with Congress stalled on a number of pieces of legislation the future of healthcare policy can seem particularly murky.
Physicians Practice sat down for an interview with Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, for his insight in to what can be expected this year in Washington, DC.
Physicians Practice: What can we expect from Washington, DC, on the policy side?
Anders Gilberg: I think 2022 will be a really interesting year, we spent a lot of money dealing with the implications of COVID. A lot of federal stimulus, I'm sure you and your readers have seen that inflation clocked in at 7%. That's just unprecedented growth for decades. Although that's not necessarily directly impacting healthcare policy, I do think that when you think about the amount of money that's been spent, we have to start to think about how that will impact the ability of Congress or the (Biden) administration to do things in the future. We're not working with Monopoly money, and the high-ticket prices of legislation, and the corresponding debt that has been created by some of the actions of Congress during COVID has been largely needed. But now I think in 2022, we're going to have to really start to think about whether Congress will be able to use the same purse strings as it has over the last couple of years.
So, if you think about when Congress spends trillions of dollars in a legislative package, there are ramifications if it doesn't offset that legislative package. So, one of the larger legislative packages related to COVID was the American Rescue Plan and this year, at the end of last year, we would have seen a potential 4 percent cut across the board in Medicare if Congress didn't intervene to prevent a 4 percent cut as a result of what are known as Pay as You Go rules that Congress has put on itself. The good news is, in 2023, that physician medical groups are not experiencing a PAYGO cut. But that's only for one year, so a lot of what we're going to be doing on the advocacy front is dealing with the ramifications of these of these spending measures.
Another one that a lot of folks are aware of and was almost fully negated was some of the policy actions in 2021. Dealing with the physician fee schedule, what happened then was a lot of the office visit codes in the physician fee schedule for Medicare increased and it provides some significant increases for primary care specialties and internal medicine specialties, non-procedural specialties. But by law, there needs to be a budget neutrality adjustment to the multiplier, called the conversion factor in Medicare. The conversion factor determines the actual dollar amount that Medicare will reimburse physicians, so in spring of 2021 Congress delayed the implementation of that budget neutrality adjustment and that was going to be a 3.75 percent reduction in the conversion factor in 2021. They put several billion dollars into the Medicare program to avert that in 2021 and then in 2022, this year, they averted 3 percent of the 3.75 percent. They left 0.75 percent in the mix, and that also expires in 2023. So, that's another looming kind of cut over the heads of physicians and medical groups next year that will have to be addressed somehow in Congress or it will shock the system in the beginning of next year.
Finally, it's an oldie but goodie, but medical groups as well as hospitals and other providers have dealt with 2 percent sequestration for years. Congress did intervene in 2021 to delay sequestration during COVID, but this year they've only temporarily delayed it. Right now, they have prevented the 2 percent cut through the end of March, then 1 percent will come back into play through June. By July, if Congress doesn't intervene, the 2 percent sequestration on all Medicare payments to physicians and hospitals will go back into effect.
So, that's three things that are directly attributable to larger policy decisions, or to the fact that certain COVID related legislative initiatives were not offset. If we don't have congressional action in 2022, it could be another shock to the system in 2023. That's something we're watching and working on very carefully here and it's an advocacy priority for MGMA to prevent these.
PP: What will become of the emergency provisions implemented to combat the COVID-19 pandemic, should the public health emergency come to an end this year?
AG: I don't think people are really thinking about that yet, but you never know it could end in 2022. What people associate most with the public health emergency and the regulatory flexibilities that came with it was telehealth. When I talk to folks, and policymakers even, everyone talks about telehealth like it's a foregone conclusion that telehealth is here to stay. But the way I would characterize it is: it's here to stay if there are payers that will reimburse telehealth in a manner that allows physicians and other providers to deliver telehealth services in a financially viable way.
Before the public health emergency, and consistent with current law, Medicare did not cover telehealth outside of rural areas and even in rural areas there were restrictions on what were called originating site requirements and where patients could get telehealth. So, you couldn't just get telehealth in the comfort of your home. That's existing law and the only way that after the public health emergency that's going to change is if Congress intervenes. Right now not only do we have coverage outside of rural areas for telehealth, we also have a degree of payment parity so that telehealth services are reimbursed around the same levels as in-person visits for physician groups.
You know, the good news is, we're still under the public health emergency and with the Omicron Varian, some recent data that MGMA just captured in (January showed) that medical groups have ramped up their telehealth capabilities once again. So, 50 percent of our members have told us that they've had to ramp telehealth back up as a result of the Omicron Variant. But again, if Omicron starts to subside, and toward the latter part of the year the public health emergency did go away that would leave us back at square one with telehealth.
My best guess on how Congress would deal with that, if the public health emergency lapsed, would be not to just keep the status quo but to address some of the concerns that they have. There are concerns about the potential for telehealth in Medicare to drive up volume in Medicare, there's also privacy issues, HIPAA privacy issues, there's quality concerns, and then there's also concerns about the the potential for fraud in the Medicare program. So, my best guess is that there would be something like a two-year expansion of telehealth if Congress intervenes, that they would study some of those aspects that they're concerned about, that they don't just drive up volume in Medicare unnecessarily, with a lower quality care for Medicare beneficiaries. And so, do I see post PHE? Permanent telehealth? No, but I do see some action to maybe ease into it from a policy perspective.
PP: What can be expected this year in terms of value-based care?
AG: We've been talking about this for the last decade, perhaps more. I don't see a whole lot of movement on value-based care in 2022. I think what we're hearing from our members, a large majority of our members told us in the fall, somewhere around 75 or 80 percent of them said that they are interested in value based care; but, at least in the Medicare program, the advanced alternative payment models that would move medical groups closer to a taking on more risk, financial and other types of risk in the Medicare program, a lot of those programs are not available outside of primary care specialties.
MGMA represents primary care, but we also have a lot of non-primary care specialties and a large percentage of our members said that there just aren't enough clinically relevant value-based care options for them to participate. So, we need additional reforms or additional advanced alternative payment models that allow flexibilities, stability, a voluntary participation. That would start to perhaps stimulate the move towards value again.
We have a huge issue, again a pocketbook issue, but a huge issue expiring at the end of this year, which is those medical groups that participate in value based care and Medicare right now, they receive a 5 percent bonus on their non-value book of business on their fee for service reimbursement from Medicare; they get a 5 percent bump to help offset that kind of risk of transition, that expires at the end of this year. We're advocating strongly for that to be continued, because of the kind of flattening out or stalling in Medicare value-based care participation. Without that to help the transition, I think it would really stall. So, that's a big issue.
Alternatively, we can see more tests and pilots out of the Centers for Medicare and Medicaid Innovation, but I really think we need to have bolder, bigger moves and provide more opportunities for medical groups, physicians, and even hospitals and other provider categories to participate in value-based care. It's really plateaued since the large part of value-based care was kick started in the Affordable Care Act, which also included ACOs. We're going to need some significant reform to get things moving again in 2022 and it's a little unclear from this administration where their priorities lie with value-based care. They use a lot of broad terminology about health equity, and things that I think most people can rally behind. But what are the practical ways that you would implement value-based care initiatives that addressed health equity, but at the same time dealt with some of the important practical issues that you need to address in order to get medical groups and physicians to begin participating in a larger scale?
PP: The midterm elections are this year, how can the political dynamics change the calculus on policy this year?
AG: Yeah, midterm election years can often be quite contentious. I know, it's hard to believe it could be more contentious, but it could (become more contentious.) Members of Congress are busy running for reelection, and they're also focusing on their own specific priorities that address their base. As you know, all of the House of Representatives this year and a third of the US Senate are up for reelection and the odds, the betting is that Republicans are likely to take control of Congress in 2023. So, with that knowledge, there may be a reluctance in Congress, on the Republican side and potentially on the Democratic side, to achieve much consensus around policy issues that they could refer to the following year. Especially on the Republican side, the thought would be to create more clear policy differences with President Biden, and especially then going into a presidential election a couple years later after that.
This administration, it's been interesting to watch, and they've been under a tough situation with COVID, and nobody denies that. But this administration has been pretty top down, and that obviously has rankled Republicans, so if Republicans do take over in 2023 there will be considerably more oversight, and it'll really slow things down in terms of the administration doing what it would like. It's unlikely that the Republicans would just be able to do anything that they would like either. So, midterm election years can really slow down policy, so we'll see.
There are some big legislative initiatives that are out there not containing a ton of healthcare, some drug pricing and other initiatives in the build back better act. That's sort of stalled right now, but we'll see after we get beyond some of the fiscal deadlines in mid-February. We could very well see very little happening, at least at the congressional level this year.