SPECIAL EDITION: It’s a Regs & Eggs Buffet—Scrambled, Over Easy, Fried, Soft and Hard-Boiled - McDermott+Consulting

SPECIAL EDITION: It’s a Regs & Eggs Buffet—Scrambled, Over Easy, Fried, Soft and Hard-Boiled

SPECIAL EDITION: It’s a Regs & Eggs Buffet—Scrambled, Over Easy, Fried, Soft and Hard-Boiled

McDermottPlus is pleased to bring you Regs & Eggs, a weekly Regulatory Affairs blog by Jeffrey Davis.

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November 3, 2023 – Hungry for some Regs & Eggs? Well, you are in luck, because this week, the Regs & Eggs buffet is open, with your choice of eggs made any style. Enough regs were released this week to feed an entire family—and the McDermottPlus team is here with +Insights and other helpful analyses to help you digest them all (be sure to check this website in the next few days as new +insights pop up!). While I usually dig deep into the regs, this week I’m just going to explain what’s on the menu and let you choose which of the regs to sample.

Scrambled: The Physician Fee Schedule Final Reg

If you want your eggs scrambled, then try out the calendar year (CY) 2024 Physician Fee Schedule (PFS) final reg. The Centers for Medicare & Medicaid Services (CMS) released this major reg on November 2, 2023. CMS finalized most of the proposals as proposed. Of note is a 3.4% cut to overall Medicare reimbursement for clinicians, which is similar to what was proposed. Despite objections to the proposed utilization assumption estimates for a new add-on code for complexity, G2211, CMS decided to finalize the code and the utilization assumptions, leading to an approximate 2% negative adjustment to the PFS conversion factor to preserve budget neutrality.

Beyond the conversion factor cut, CMS finalized many of its proposals around extending telehealth flexibilities, including creating a new process for adding telehealth codes to the Medicare telehealth list. CMS also will establish new payments for community health integration services, social determinants of health risk assessment and principal illness navigation services provided by social workers, community health workers and other auxiliary personnel. In addition, CMS is finalizing the following policies:

  • Establish the definition of “substantive portion” of a split or shared service in 2024 to mean more than half of the total time spent by the physician and NPP performing the split (or shared) visit, or a substantive part of the medical decision making—aligning with Current Procedural Terminology (CPT) guidelines.
  • Indefinitely suspend the Appropriate Use Criteria (AUC) Program, which would have required clinicians who order an advanced diagnostic imaging service to consult an AUC using a qualified clinical decision support mechanism.
  • Continue the practice of issuing a prescriber notice of non-compliance as the non-compliance action for the Electronic Prescribing for Controlled Substances requirement.
  • Codify previously finalized payment policies for dental services prior to or during head and neck cancer treatments, whether primary or metastatic and permit payment for certain dental services inextricably linked to other covered services used to treat cancer, including chemotherapy, CAR T cell therapy and antiresorptive therapy.
  • Modify many aspects of the Medicare Shared Saving Program to promote growth and help move toward digital quality measurement.

Finally, CMS is finalizing some, but not all, of its proposed modifications to the Merit-Based Incentive Payment System (MIPS), the Medicare quality and cost performance program for clinicians. Importantly, based on feedback from stakeholders, CMS decided to maintain the 2024 MIPS performance threshold at 75 points in 2024 rather than increasing it to 82 points as proposed. While CMS had projected that over half of clinicians would receive a penalty with an 82-point threshold, CMS now projects that only 22% of clinicians will receive a penalty with the threshold remaining at 75 points.

We are working on a comprehensive summary of the reg, so stay tuned!

Over Easy: The Outpatient Prospective Payment System Final Reg

While there is nothing necessarily easy about the CY 2024 Outpatient Prospective Payment System (OPPS) final reg, the cooks over at CMS finalized most of the policies as they were proposed in the OPPS proposed reg:

  • Annual Update: CMS finalized a 3.1% increase to payments for hospital outpatient services, slightly higher than what was proposed (2.8%).
  • 340B Drugs (more on this in the fried egg category below): For drugs under Medicare Part B, CMS will continue the statutory payment rate of average sales price plus 6% and will use only a single modifier to identify separately payable drugs and biologicals acquired under the 340B program.
  • Price Transparency: CMS will require hospitals to report all information in a standardized way through the use of a template (which is currently optional). CMS will also publicly display information about its compliance actions against hospitals.
  • Site Neutrality: CMS will continue its current policy (in place since 2019) to reimburse clinic visits delivered in off-campus provider-based outpatient departments at 40% of the OPPS payment rate, but will shield intensive cardiac rehabilitation services from this reduction.
  • Radiopharmaceuticals: CMS is maintaining its current payment policy and will consider alternative payment approaches in future rulemaking.
  • Quality Program: CMS is making modifications to the Hospital Outpatient Quality Reporting and Ambulatory Surgical Center Quality Reporting Programs. However, it is notable that CMS did not finalize its proposal to remove the Left Without Being Seen measure from the Outpatient Quality Reporting Program. CMS also finalized new measures that will be included in the Rural Emergency Hospital Quality Reporting Program, the quality reporting program for this new facility type under Medicare.
  • Intensive Outpatient Services: CMS finalized payment rates for intensive outpatient services and established physician certification requirements and coding and billing procedures.

McDermottPlus is also working on a detailed summary of this reg as well!

Fried: 340B Remedy Final Reg

CMS served up fried eggs in the release of the 340B remedy final reg on November 2, 2023. Many commenters objected to CMS’s proposals, and despite these comments, CMS has decided to finalize its proposals mostly as proposed.

Specifically, in response to a 2022 Supreme Court of the United States decision that invalidated CMS’s reduction to 340B payments, CMS is providing a one-time, lump-sum refund to hospitals that had payments reduced because of the now-invalidated policy. This payment will account for the difference in what was paid to the hospitals and what should have been paid had the cut not been implemented. CMS will implement the payment cuts remedy in a budget-neutral manner, by reducing the OPPS conversion factor by 0.5% starting in CY 2026 (a one-year delay from the proposed starting date of 2025). CMS estimates that it would take 16 years to recoup all of the additional payments that were made from 2018 through September 27, 2022.

Soft-Boiled: Provider Information Blocking Disincentives Proposed Reg

On November 1, 2023, CMS issued a proposed reg that would establish disincentives for providers who violate the information blocking requirements of the 21st Century Cures Act. While these requirements have been in effect for a while, so far there have been no penalties for providers whom the US Department of Health and Human Services Office of Inspector General (OIG) has determined to have committed information blocking. The proposed reg also provides information related to OIG’s investigation of claims of information blocking and proposes to establish a process for sharing information with the public about healthcare providers that OIG determines have committed information blocking.

With respect to the disincentives, CMS proposes penalties for some, but not all, providers that are subject to the information blocking requirements:

  • Hospitals and critical access hospitals (CAHs) would not be meaningful electronic health record (EHR) users under the Medicare Promoting Interoperability Program if they committed information blocking. As a result, a hospital would not be able to earn the three-quarters of the annual market basket increase associated with qualifying as a meaningful EHR user, while a CAH would have its payment reduced to 100% of reasonable costs, from the 101% of reasonable costs it might have otherwise earned.
  • Clinicians would not be meaningful EHR users under the Promoting Interoperability performance category of MIPS if they committed information blocking. Clinicians who are subject to MIPS and are required to report on the Promoting Interoperability performance category therefore would receive a zero score (the Promoting Interoperability performance category is 25% of the total MIPS score). It is important to note that some providers, including hospital-based clinicians, are exempt from this category of MIPS and therefore would not be impacted by this proposed policy.
  • For the Medicare Shared Savings Program, CMS proposes that accountable care organizations (ACOs) and healthcare providers that are part of an ACO would be barred from participating in the Shared Savings Program for at least one year if the OIG determines that they committed information blocking. This may result in a healthcare provider being removed from an ACO or prevented from joining an ACO, and would prevent an ACO’s participation in the Shared Savings Program.

Comments on the proposed rule are due on January 2, 2024.

For additional information, see this blog post by CMS and the Office of the National Coordinator for Health Information Technology (ONC). ONC and CMS will host an information session on the proposed rule on November 15, 2023. You can access fact sheets and other resources and sign up for the information session on the ONC website.

Hard-Boiled: No Surprises Act Independent Dispute Resolution Operations Proposed Reg

Lastly, if you want a hard-boiled egg, try the extremely technical independent dispute resolution (IDR) proposed reg that the US Departments of Health and Human Services, Labor and the Treasury (the Departments) released on October 27, 2023. This McDermottPlus +Insight (written by my colleague Kristen O’Brien and me) highlights the major proposals in the reg. Please read this +Insight and let us know if you have any questions!

The Departments proposed many process changes that are meant to facilitate negotiations prior to the IDR process, help reduce the number of ineligible disputes that initiating parties put forth, and help speed up payment determinations by certified IDR entities (arbiters). The Departments also took into account stakeholder feedback about how to broaden batching requirements. However, since the Departments are cooks in this kitchen, they didn’t have to give everyone everything they wanted—and they didn’t. Some batching policies that specialties (especially emergency medicine) wanted were not granted.

Interestingly, the Departments also proposed many changes to the structure and collection of the administrative fee, even though they issued a proposed reg on the IDR fees just a short while ago. These proposed changes seem to override the previous proposals in the long run, so many of the comments that stakeholders submitted on the previous reg may ultimately be moot. With respect to this particular policy, the Departments seem to have overcooked the hardboiled egg in their previous reg and therefore decided to make a fresh batch of hard-boiled eggs with this reg.

Comments are due on this proposed reg by January 2, 2024. The Departments expect most of the policies to go into effect by either August 2024 or January 2025. Health plans, however, are expected to register in the IDR portal (which will help providers identify specific health plans) as soon as the final reg is issued.


Now that you have the menu, it’s time to dig in! As you do so, let us at McDermottPlus know if you need help digesting these regs and understanding how their full implications may affect your organization.

Until next week, this is Jeffrey saying, enjoy reading regs with your eggs!

For more information, please contact Jeffrey Davis. To access the full archive of Regs & Eggs, visit the American College of Emergency Physicians.

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