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Jerris Heaton


Understanding the Proposed 2024 CMS Medicare Physician Fee Schedule and Merit-Based Incentive Payment System Update

October 2, 2023


EHR, News 20 Minute Read

What is the Medicare Physician Fee Schedule (PFS) and Merit-based Incentive Payment System (MIPS)?

In the evolving healthcare landscape, understanding the PFS and MIPS is paramount. Managed by the Centers for Medicare and Medicaid Services (CMS), the PFS sets payment rates for medical services provided to Medicare beneficiaries, ensuring fair pricing for both providers and patients. Meanwhile, MIPS shifts the focus from quantity to quality in healthcare delivery, offering incentives for top-tier patient care through its performance-based metrics.

Annual CMS updates aim to enhance equity within the Shared Savings Program, addressing disparities to ensure an inclusive healthcare system. While the PFS provides the pricing blueprint, MIPS fine-tunes these payments based on quality metrics. For healthcare providers, staying updated on these mechanisms is crucial, affecting both their earnings and the quality of care they offer.

2024 Medicare Physician Fee Schedule Proposed Update Timing

On July 13, 2023, CMS unveiled the proposed rule for the 2024 PFS. This move is a continuation of CMS’s mission to cultivate growth, alignment, and equity in value-based care, addressing feedback from accountable care organizations (ACOs) and other stakeholders. Building upon the prior year’s finalized rules, these new proposals offer nuanced refinements which are detailed in the CY 2023 Medicare Physician Fee Schedule Final Rule Fact Sheet.

Encouraging public participation, CMS launched a 60-day comment period, which ended September 11, 2023. This provides an avenue for ACOs, providers, suppliers, Medicare beneficiaries, and the broader public to voice their insights and perspectives. Typically, the final rule is published in November; however, for the most up-to-date information, it’s advised to monitor the CMS website.

Below we’ll outline the proposed changes for 2024 and its potential impact on physicians, practices, and patients.

2024 PFS Proposed Changes

Shared Savings Program Quality Performance Standard

1. Proposal for Shared Savings Program ACOs to Report Medicare CQMs

  • Establishment of Medicare CQMs as a new collection type for Shared Saving Program ACOs under the APP, starting 2024.
  • Goal is to transition ACOs to report the all payer/all patient MIPS CQMs and eCQMs, targeting Medicare patients.
  • Aims to ensure ACOs aren’t penalized for serving other patients, while also transitioning to digital measurements, aligning with Universal Foundation for adults by 2025.
  • In 2025 and subsequent years, ACOs can report data using eCQMs, MIPS CQMs, or Medicare CQMs collection types.

Potential Impact:

Physicians: Increased reporting avenues, flexibility in choosing the mechanism suitable for their patient base.

Practices: Need to adapt to new collection types, potentially overhauling or integrating new IT systems.

Patients: Could benefit from a more streamlined and holistic data reporting system, focusing on patient-centric care.

Data Completeness Standard for Medicare CQMs

  • Proposed use of the MIPS data completeness criteria for Medicare CQMs.
  • Thresholds set at 75% for the years 2024 to 2026 and increased to 80% for 2027.
  • The list of beneficiaries eligible for Medicare CQMs would be shared once annually at the beginning of the quality data submission period.

Potential Impact:

Physicians: More stringent data reporting requirements, emphasis on accuracy and consistency.

Practices: Need to invest in tools or systems to ensure data reporting adheres to the completeness standards.

Patients: Assurance of consistent, high-quality care due to stricter data standards.

Benchmarking Policy for Medicare CQMs

  • Proposes development of benchmarks for ACOs on Medicare CQMs in alignment with MIPS policies.
  • For 2024 and 2025, performance period benchmarks would be used since historical data isn’t available.
  • Transition to historical benchmarks is proposed for 2026 and onwards.

Potential Impact:

Physicians: Adjustments to care delivery might be needed based on benchmarks.

Practices: Would have to continuously monitor and adjust their practices to align with or outperform benchmarks.

Patients: Could experience varying levels of care quality as practices strive to meet or exceed benchmarks.

Expanding the Health Equity Adjustment to Medicare CQMs

  • Proposes making ACOs that report Medicare CQMs eligible for the health equity adjustment to their quality performance category score from 2024.
  • Recognizes ACOs that cater to underserved populations and offer high-quality care.

Potential Impact:

Physicians: Those serving underserved populations could see enhanced scores, possibly translating to better compensation or recognition.

Practices: Incentive to provide higher quality care to underserved individuals, potentially leading to organizational shifts to cater to these populations.

Patients: Underserved populations might experience enhanced attention and care quality due to these adjustments.

2. Proposals to Align CEHRT Requirements for Shared Savings Program ACOs with MIPS

  • Proposal to align the CEHRT requirements of the Shared Savings Program with MIPS for enhanced care coordination.
  • Remove Shared Savings Program CEHRT threshold requirements from 2024 and introduce requirements that all related clinicians report the MIPS PI performance category measures.

Potential Impact:

Physicians: Might experience a change in the electronic health record reporting mechanisms.

Practices: Integration of new CEHRT requirements, potential IT infrastructure changes, and increased alignment with MIPS.

Patients: Improved care coordination, better integration of health data, and potentially improved care quality.

3. MIPS Value Pathway (MVP) Reporting for Specialists in Shared Savings Program ACOs — Request for Information (RFI)

  • Starting in CY 2023, specialists participating in Shared Savings Program ACOs have an option to report MVPs either as an individual, group, or subgroup.
  • The initiative enables specialists to report pertinent data and relevant quality measures.
  • The overarching aim is to empower patients and referring clinicians with more informed decisions regarding the specialists involved in a patient’s care.
  • Feedback is being sought on potential future scoring incentives tied to the ACO’s health equity adjusted quality performance score for 2025 when specialists in the ACO report quality MVPs.

Potential Impact:

Physicians: Greater flexibility in reporting avenues and potential new scoring incentives.

Practices: Might need to adopt new reporting structures or guidelines for specialists.

Patients: More transparent and tailored data on specialists, enabling better decision-making.

4. Proposals to Modify the Health Equity Adjustment Underserved Multiplier

  • Proposed modification in the calculation method for beneficiaries dually eligible for Medicare and Medicaid and beneficiaries enrolled in Medicare Part D LIS.
  • The focus is to use the actual number of beneficiaries rather than person-years to calculate the proportion.
  • Recognizes beneficiaries with partial-year enrollments as underserved, boosting incentives for ACOs to serve and facilitate enrollment for this population.

Potential Impact:

Physicians: Possible re-evaluation of underserved beneficiaries they cater to.

Practices: A stronger push towards serving partially enrolled beneficiaries, with potential adjustments in outreach and support systems.

Patients: Enhanced support and attention to those partially enrolled or eligible.

5. Proposal to Use Historical Data to Establish the 40th Percentile MIPS Quality Performance Category Score

  • From performance year 2024 onwards, a rolling three-performance year average (with a one-year lag) will be used to calculate the 40th percentile MIPS Quality performance category score.
  • The goal is to offer ACOs clear benchmarks prior to the start of a performance year.
  • Addresses concerns about the lack of public benchmarks before the start of the performance year and uncertainty regarding the quality scores needed to meet the performance standard.

Potential Impact:

Physicians: Clarity in performance benchmarks, which might influence quality-focused efforts.

Practices: Enhanced foresight in performance goals and more strategic planning based on clear benchmarks.

Patients: Consistent and enhanced care quality due to clear quality benchmarks for care providers.

6. Proposal to Apply a Shared Savings Program Scoring Policy for Excluded APP Measures

  • To protect ACOs from events out of their control, such as measure exclusions, a new scoring policy is proposed for 2024 onwards.
  • If an ACO reports all required measures and its total available measure points are reduced due to exclusions, the higher of the ACO’s health equity adjusted quality performance score or the equivalent of the 40th percentile MIPS Quality performance category score will be used to determine if the ACO meets the required standard.

Potential Impact:

Physicians: Alleviated concerns over external factors affecting their quality performance scores.

Practices: More secure performance evaluations, irrespective of external measure exclusions.

Patients: Assured of ACOs’ consistent drive for quality, even if certain measures get excluded.

7. Proposal to Revise the Requirement to Meet the Case Minimum Requirement for Quality Performance Standard Determinations

  • To clear confusion about case minimum references in ACO quality performance standards, a new proposal for 2024 onwards replaces these references.
  • Instead of case minimums, ACOs must receive a MIPS Quality performance category score to meet the quality performance standard.
  • This change corrects the use of case minimum references by consolidating its applications in MIPS Quality performance category scoring policies.

Potential Impact:

Physicians: Streamlined requirements, with clarity on performance standards.

Practices: A clearer understanding of how to achieve performance standards, ensuring adherence to set benchmarks.

Patients: Benefit from ACOs that have clearer guidelines, possibly leading to more consistent care quality.

For more details on the CY 2024 Quality Payment Program proposed changes, refer to the QPP Resource Library.

Proposals to Improve ACO Risk Adjustment and Alignment

1. Proposal to Cap Regional Service Area Risk Score Growth for Symmetry with ACO Risk Score Cap

  • Modification to the calculation of the regional component of the three-way blended benchmark update factor (1/3 ACPT, 2/3 national-regional blend).
  • Cap HCC risk score growth in an ACO’s regional service area using the CY 2023 PFS final rule methodology.
  • Caps applied whether or not the ACO’s prospective risk score growth was capped.
  • Adjust regional risk score growth cap based on ACO market share.

Potential Impact:

Physicians: May experience changes in risk score calculations and incentives, depending on their ACO’s regional growth and market share.

Practices: Practices in regions with high aggregate risk score growth will have an increased regional component of their update factor.

Patients: This proposal aims to incentivize ACOs to care for higher-risk beneficiaries, potentially leading to more resources and attention to those with greater health needs.

2. Proposal to Update How Benchmarks Are Risk Adjusted

  • Transition to a revised CMS-HCC risk adjustment model, Version 28 (V28) for 2024.
  • Aim to use the same CMS-HCC risk adjustment model for both the performance year and all benchmark years.
  • A three-year phase-in approach will be used, comprising 67% of the 2020 CMS-HCC model and 33% of the PY 2024 model.
  • Additionally, a symmetrical cap will be applied to risk score growth in an ACO’s regional service area, like the cap placed on an ACO’s risk score growth.

Potential Impact:

Physicians: Consistent risk adjustment methods across years may lead to a more predictable benchmarking process.

Practices: Practices with higher average risk scores or those in two-sided models may experience a more favorable risk adjustment, leading to potentially better financial outcomes.

Patients: No direct impact noted, but over time, improved risk adjustment might lead to more tailored care strategies for patients with different risk profiles.

Proposed Modifications to the Shared Savings Program’s Benchmarking Methodology — Negative Regional Adjustment

1. Proposal to Mitigate the Impact of the Negative Regional Adjustment on the Benchmark to Encourage Participation by ACOs Caring for Medically Complex, High-Cost Beneficiaries

  • Policies from the CY 2023 PFS final rule aimed to reduce negative regional adjustments for the agreement periods starting January 1, 2024.
  • Intent is to incentivize ACOs that cater to high-cost beneficiaries to participate in the Shared Savings Program.
  • The proposal aims to further mitigate the impact of the negative regional adjustment, potentially resulting in higher benchmarks than the current methodology.
  • ACOs facing a negative overall adjustment based on the existing methodology would receive no downward adjustment under the new proposal.
  • ACOs eligible for the prior savings adjustment and having a negative regional adjustment would benefit because the prior savings amount won’t be offset by the negative regional adjustment.

Potential Impact:

Physicians: Those serving medically complex, high-cost beneficiaries may experience a more favorable benchmarking, which could encourage their participation or continuation in ACOs.

Practices: Practices that previously faced downward adjustments might experience financial relief, possibly improving the overall feasibility of their operations within the Shared Savings Program.

Patients: High-cost or medically complex patients could potentially see enhanced or continued care, as ACOs serving them might find better financial incentives to continue doing so.

Determining Beneficiary Assignment Under the Shared Savings Program

1. Proposal to Add a Step Three to the Step-Wise Assignment Methodology Used to Assign Beneficiaries to ACOs

  • Proposed modification in the assignment methodology and definition of an “assignable beneficiary.”
  • Aim to better account for beneficiaries receiving primary care from nurse practitioners, physician assistants, and clinical nurse specialists during a 12-month assignment window and those who had at least one primary care service from a physician in the previous 12 months.
  • Goal to increase access by assigning more Medicare fee-for-service beneficiaries to ACOs, especially in underserved populations.
  • Proposal introduces a new “step three” to the step-wise beneficiary assignment methodology, which involves using an expanded 24-month assignment window (12-month assignment window + preceding 12 months).
  • The expanded window is expected to identify more beneficiaries, particularly those from underserved populations, for assignment.
  • Beneficiaries likely to be added are more prone to be disabled, enrolled in the Medicare Part D LIS, or reside in areas with higher ADI scores.
  • The changes would affect aspects of the Shared Savings Program dependent on the assigned population, national assignable population, and assignable beneficiaries for an ACO’s regional service area.
  • The proposal aligns with the HHS’ Initiative to Strengthen Primary Care, recognizing a variety of clinician types involved in high-quality primary care.
  • This step is also designed to provide greater recognition of the role of nurse practitioners, physician assistants, and clinical nurse specialists in delivering primary care services. Furthermore, there are updates to the definition of primary care services used for the purpose of beneficiary assignment, ensuring consistency with current billing and coding guidelines.

Potential Impact:

Physicians: May see an increase in the diversity of assigned beneficiaries, particularly those from underserved populations. This could change the dynamics of care provision and potential reimbursement.

Practices: ACOs might experience an increase in their assigned beneficiaries, necessitating adjustments in care management, resources, and potential reimbursement structures.

Patients: Underserved populations, including those receiving primary care from non-physician professionals, could benefit from more integrated and coordinated care within the ACO framework. This might lead to enhanced access to resources and improved health outcomes.

Proposed Modifications to Advance Investment Payments Policies

  • A new payment option called “advance investment payments” (AIP) was finalized in the CY 2023 PFS final rule for eligible Shared Savings Program ACOs starting from January 1, 2024.
  • A series of technical modifications are proposed to refine AIP policies in preparation for their initial implementation.
  • ACOs are supported in their progression to performance-based risk by allowing progression to two-sided model levels within the BASIC track’s glide path from the third performance year of receiving AIP.
  • Advance investment payments would only be recouped from the shared savings of an ACO wishing to renew early; direct recoupment from ACOs will be avoided.
  • ACOs are required to report both to CMS and publicly on spend plan updates and actual expenditure.
  • Termination policies are to be modified, where CMS will cease advance investment payments if an ACO voluntarily exits the Shared Savings Program.
  • ACOs can seek reconsideration reviews for all AIP-related calculations.
  • Furthermore, there are proposed refinements to policies related to the newly established advance investment payments (AIP).

Potential Impact:

Physicians: Should remain updated with these changes, especially if their practices are part of an ACO. This might affect their financial planning and performance metrics.

Practices: Modifications in financial processes and risk management will be necessary, given the new reporting requirements and recoupment stipulations. There might also be an increased emphasis on performance metrics with the shift towards two-sided risk models.

Patients: No immediate direct impact, but there could be indirect implications if ACOs restructure services or focus more intently on performance outcomes due to the new policies.

Proposed Modifications to Shared Savings Program Eligibility Requirements

1. Shared Governance Requirement

  • In the November 2011 final rule, CMS established that 75% control of an ACO’s governing body must be held by ACO participants.
  • An exception option was provided for ACOs regarding this requirement.
  • CMS has not granted an exception to any ACO thus far.
  • The proposed modification seeks to remove the option for ACOs to request this exception, solidifying the 75% participant control threshold.

Potential Impact:

Physicians: This change would ensure that physicians and other healthcare providers who are ACO participants have a predominant say in ACO governance, ensuring that the decisions are taken with their firsthand experience and knowledge.

Practices: Medical practices within the ACO structure will likely see more consistent governance that aligns closely with the front-line healthcare delivery experience. The potential for exceptions might have allowed for a more varied control structure.

Patients: Patient care could benefit from governance led predominantly by ACO participants, as the decisions made would likely be more patient-centered, given that the majority of governance would be held by direct care providers. The absence of exceptions ensures consistent participant-led decisions across ACOs.

Preparing for the 2024 CMS Proposed Changes

  1. Stay Informed: Regularly monitor updates from the CMS website and subscribe to notifications. Given that many of these updates are proposed, they may undergo further refinements before being finalized.
  2. Utilize with Advanced EHR: ChartLogic’s Electronic Health Records (EHR) seamlessly manages and monitors patient data. The intuitive interface and customizable templates will aid in tracking the latest CMS updates.
  3. Embrace Digitalization: With ChartLogic’s comprehensive suite, you can ensure the data submission and patient interaction aligns with CMS standards.
  4. Optimize Billing Practices: With ChartLogic’s Revenue Cycle Management, ensure that billing practices align with CMS guidelines, optimizing the claims process and reducing denials.
  5. Review & Update Quality Measures: Based on the new set of quality measures proposed, practices should conduct an internal audit. Evaluate your current measures against the proposed ones and identify gaps. Develop an action plan and consider using ChartLogic’s customizable EHR templates to tailor quality measures as per the new guidelines.
  6. Engage and Educate Patients: Use ChartLogic’s Patient Portal to keep patients informed and gather feedback about their care plans, medications, and any new changes in the care process. An informed patient is more likely to be engaged and compliant, aligning with CMS’s goals.
  7. Upscale Your IT: Ensure that data and technology is at the forefront of your practice. With ChartLogic’s Managed IT customizable solution, you can completely outsource your IT operations.
  8. Consult and Collaborate: Given the intricacies of CMS guidelines, consider reaching out to ChartLogic’s expert consultants and leveraging their insights. Their vast experience with numerous practices can provide invaluable guidance in navigating CMS compliance.

To conclude, as the healthcare landscape continues to evolve with new regulations and standards, it’s imperative for medical practices to stay agile and informed. The 2024 CMS proposed changes underline the importance of improved care delivery, patient engagement, and streamlined data submission. To navigate these changes efficiently, practices should not only understand these updates but also harness digital health solutions, such as those provided by ChartLogic. By proactively leveraging these tools, practices can ensure compliance, enhance patient outcomes, and maintain the highest standards of care quality. The future of healthcare lies in integration, innovation, and informed decision-making.



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