On November 2, the Centers for Medicare & Medicaid Services (CMS) issued the final calendar year (CY) 2024 Physician Fee Schedule, which finalizes policies for physician payment and other outpatient services covered under Medicare Part B. CMS released a fact sheet and a press release in tandem with the final rule. CMS also published a separate Shared Savings Program fact sheet. The rule finalizes the following:

• Decrease the conversion factor for 2024 by 3.4 percent from the conversion factor for 2023,
• Extend pandemic era telehealth policies through December 31, 2024, as mandated by Consolidated Appropriations Acts of 2023,
• Clarify who can provide outpatient therapy, Diabetes Self-Management Training (DSMT) and Medical Nutrition Therapy (MNT) telehealth visits and expand DSMT telehealth access,
• Update caregiver training services,
• Expand coverage of diabetes screening tests to include HbA1c test,
• Relax direct supervision requirements for certain provider types and services,
• Create a new code, G0136, for social determinants of health risk assessment,
• Update the Quality Payment Program, including changes to the Merit-based Incentive Payment System Value Pathways (MVPs),
• Revise the provider and supplier Medicare enrollment requirements,
• Update vaccine administration payment,
• Clarify policies regarding COVID-19 vaccine and monoclonal antibody products,
• Add polices to implement required manufacturer refunds for discarded drugs,
• Codify previously finalized covered dental services, and
• Responds to comments on request for information on digital therapeutics.

This final rule is scheduled to be published in the Federal Register on November 16, 2023.

CMS FINALIZES DECREASED CONVERSION FACTOR, LOWER PAYMENT RATES FOR PHYSICIANS

CMS finalizes payment reduction for physicians for a second year in a row. The CY 2024 PFS will be reduced by 1.25 percent compared to CY 2023. Physicians and other health professionals are paid under Medicare Part B for services that include office visits, surgical procedures, and other diagnostic and therapeutic efforts. To determine payment, Medicare uses a physician fee schedule (PFS) that is based on the resources typically used to furnish the service. These relative value units (RVUs) are applied to each service for physician work, practice expense (PE), and malpractice.

CMS multiplies these RVUs by a “conversion factor” to determine the Medicare payment amounts for each physician service. For 2024, CMS finalizes decreasing the conversion factor by 3.4 percent, which reflects the finalized unadjusted 2023 conversion factor of $33.06 multiplied by an RVU budget neutrality adjustment of – 2.20 percent and the 1.25 percent increase provided by the CAA, 2023. As proposed, CMS finalizes a conversion factor of $32.74, which is a decrease of $1.15 from the 2023 conversion factor of $33.89.[1] This means that each physician service will be paid less in 2024 than it was in 2023, except for services where CMS finalized changes to the RVUs or otherwise specifically finalized payment increases.

TABLE 1. Physician Fee Schedule Conversion Factor (CF) Comparison[2]

2023 Conversion Factor	2023 Adjusted CF	2024 Finalized CF
33.8872	33.0607	32.7375

Potentially Misvalued Codes

Under current law,[3] the Secretary is required to conduct periodic review at least every five years of the RVUs under the PFS. To this end, each year, CMS solicits nominations of codes that are potentially misvalued. CMS publishes a list of these codes in the subsequent year’s proposed rule along with the agency’s evaluation of their status. CMS finalizes some codes it proposed as potentially misvalued codes, including the 19 therapy codes identified in the proposed rule as potentially misvalued for 2024.[4]

CMS FINALIZES CHANGES TO TELEHEALTH POLICIES

Place of Service Codes for Medicare Telehealth Services

Beginning CY 2024, claims billed with place of service (POS) 10 (Telehealth Provided in Patient’s Home) will be paid at the non-facility physician fee schedule rate. Claims billed with POS 2 (Telehealth Provided Other than in Patient’s Home) will continue to be paid at the PFS facility rate for non-home originating sites, such as physician’s offices and hospitals.

Removal of Category Taxonomy from the Medicare Telehealth Services List

During the COVID-19 public health emergency (PHE), CMS introduced more flexibility for telehealth services to enhance Medicare beneficiary access to healthcare. CMS is responsible for maintaining the Medicare Telehealth Services List, which comprises all the services covered by Medicare when delivered via telehealth. CMS routinely evaluates requests to expand the list and determines whether to add services on a temporary or permanent basis under the Category 1, 2, or 3 criteria.

In this final rule, CMS finalizes its proposal to simplify its multicategory approach and consider additions to the list as either permanent or provisional beginning in 2024. The process remains consistent with the existing principles applied during the COVID-19 PHE. Services can be assigned “permanent” or “provisional” status based on the following five step process:

1. Determine if the service is separately payable under the Physician Fee Schedule (PFS).
2. Determine if the service is subject to the provisions of section 1834(m) of the Act.
3. Review the service elements and assess if they can be delivered using interactive telecommunications technology.
4. Consider whether the service elements of the requested service match those of a service on the list with permanent status.
5. Examine the clinical benefit of the service when provided via telehealth compared to in-person services.

CMS Finalizes Permanent and Temporary Additions to the Medicare Telehealth Services List

CMS assigns permanent status on the List to the new HCPCS code G0136 (Administration of a standardized, evidence-based Social Determinants of Health Risk Assessment tool, 5-15 minutes).

Additionally, CMS temporarily adds the following health and well-being coaching codes to the List: 0591T, 0592T, and 0593T, noting that further evidence is required to establish their clinical benefits.

Several services currently included on the list on a temporary basis, including cardiovascular and pulmonary rehab^[5], deep brain stimulation^[6], therapy^[7] , and hospital care^[8] remain on the List through end of 2024 and will be removed beginning January 1, 2025, barring additional evidence available to inform future rulemaking.

PHE Telehealth Polices to Extend Through End of 2024

The Consolidated Appropriations Act of 2022 (CAA 2022) extended specific Medicare telehealth flexibilities that were implemented during the PHE. Under CAA 2022, these flexibilities were initially extended for a period of 151 days following the conclusion of the PHE. One notable change introduced by CAA 2022 was the temporary elimination of constraints on telehealth originating sites, allowing patients to access telehealth services from their homes. Subsequently, CAA, 2023 further extended these telehealth flexibilities beyond the initial 151-day period, until December 31, 2024. CMS will maintain existing payment policies through the end of 2024.

Notably, CMS is continuing to delay in person requirements for mental health telehealth and will continue to provide coverage and payment parity for telehealth services furnished via audio-only communications through December 31, 2024.[9] Additionally, CMS is removing the frequency limitations for several subsequent care services in inpatient and nursing facility visits, and critical care consultation services, furnished via telehealth.

Under Medicare Part B, direct supervision is required for most services furnished by auxiliary personnel incident to the services of the billing practitioner. During the PHE, the practitioner was allowed to be virtually present through audio/video real-time communication. CMS also extends this flexibility through the end of 2024.

Eligible Telehealth Practitioners Expanded

CMS finalizes its proposal to add Marriage and Family Therapists (MFTs) and Mental Health Counselors (MHCs) as distant site practitioners for furnishing telehealth services.

CMS Clarifies Originating Site Requirements and Updates Fee

Section 4113(a)(2) of CAA, 2023 temporarily expanded the definition of telehealth originating sites to include any location in the United States where a Medicare beneficiary is situated during the provision of telehealth services, including their own home.

In response to comments, CMS clarifies the definition of “the patient’s home” to include various settings such as homeless shelters, group homes, or any location identified by the beneficiary as their residence, be it temporary or permanent. Further, CMS responds to concerns about the expiration of the flexibility allowing telehealth practitioners to use their currently enrolled location, rather than their home address, when delivering services from their home. CMS acknowledges the safety concerns raised and will continue to use the enrolled practice location instead of home addresses for distant site practitioners until the end of CY 2024. As this provision was not in the proposed rule, CMS requests clear examples of how the enrollment process may pose privacy risks to inform future  rulemaking,

For 2024, CMS sets the telehealth originating site fee at $29.96 for HCPCS code Q3014 (Telehealth originating site facility fee).

Remote Patient Monitoring and Remote Therapeutic Monitoring Services Policies

In this final rule, CMS provides the following clarifications regarding remote patient monitoring (RPM) and remote therapeutic monitoring (RTM) services:

• New vs. Established Patient Requirements: In the CY 2021 PFS final rule,[10] CMS established that after the PHE for COVID-19 ends, RPM services should be furnished only to established patients. Patients who received initial remote monitoring services during the PHE are considered established patients for this purpose.
• Data Collection Requirements: The requirement for collecting data for at least 16 days in a 30-day period for remote monitoring services was reinstated at the end of the PHE. This requirement applies to existing RPM and RTM code families for CY 2024.
• Use of RPM and RTM in Conjunction with Other Services: Practitioners may bill RPM or RTM but not both concurrently with other care management services to prevent overbilling of these services. Additionally, the same patient can only be billed for these services once per 30-day period when at least 16 days of data have been collected.
• Other Clarifications for Appropriate Billing: RPM and RTM services can be furnished separately during global periods for surgery, provided they are unrelated to the global procedure’s diagnosis. Therapists and practitioners not receiving global service payment can provide RPM or RTM services during global periods for surgery.

Additionally, CMS clarifies that the 16-day data collection requirement does not apply to certain treatment management codes.

CMS Expands Outpatient Therapy, DSMT, and MNT Telehealth Visits and DSMT Telehealth Access

During the PHE, CMS allowed institutions to bill for services furnished remotely by their employed practitioners (where the practitioners do not bill for their own services). As such, CMS will to continue to also allow institutional providers to bill for outpatient therapy (physical therapy, occupational therapy, speech-language pathology), Diabetes Self-Management Training (DSMT), and Medical Nutrition Therapy (MNT) services when furnished to beneficiaries in their homes through communication technology through end of 2024. Hospitals no longer need to register beneficiaries’ homes as provider-based departments to bill for these services.

Current CMS policy in the Medicare Claims Processing Manual[11] requires one hour of the 10-hour DSMT initial training and one hour of the two-hour follow-up annual training to be furnished in person to allow for effective injection training when injection training is applicable for insulin-dependent beneficiaries. The in-person requirement in DSMT has been a major hurdle for the program and the telehealth flexibilities adopted during the PHE has shown that virtual training can be equally successful. As such, CMS proposes to revise its policy to allow one hour of in-person training to be provided via telehealth for insulin-dependent beneficiaries.

UPDATES TO CAREGIVER TRAINING SERVICES

CMS finalizes its proposal to make payment when health care practitioners train caregivers to support patients with certain illnesses in carrying out a treatment plan. CMS revises and finalizes the definition of caregiver to as ““an adult family member or other individual who has a significant relationship with, and who provides a broad range of assistance to, an individual with a chronic or other health condition, disability, or functional limitation” and “a family member, friend, or neighbor who provides unpaid assistance to a person with a chronic illness or disabling condition”. CMS states that the “volume and frequency of CTS sessions furnished to caregivers by the treating practitioner for the same patient may be based on the treatment plan, as well as changes in patient condition, the treatment plan, the patient’s diagnosis, or the patient’s caregivers.”[12]Additionally, CMS designates CPT codes 97550, 97551, and 97552 as “sometimes therapy” services.

CMS FINALIZES PROPOSAL TO EXPAND DIABETES SCREENING POLICIES

Currently Medicare coverage for diabetes screening tests under Par B is limited to two types of tests: the fasting plasma glucose test and the glucose tolerance test.[13] CMS has authority to cover other tests that the Secretary determines appropriate.[14] CMS finalizes its proposal to expand coverage of diabetes screening tests to include the Hemoglobin A1C test (HbA1c) test. HbA1C tests are commonly used in clinical practice for diagnosis of diabetes and with this update, CMS aligns with the recommendations of the U.S. Preventative Services Task Force and the American Diabetes Association.[15]

Additionally, CMS finalizes expansion and simplification of the frequency limitations for diabetes screening. Currently, diabetes screening testing is limited to twice in the 12 months following the most recent diabetes screening test. Screening tests are allowed two times in 12 months for a patient with a pre-diabetes diagnosis and once in 12 months for anyone who is not diagnosed. CMS will now allow screening testing twice every 12 months for anyone. CMS is limited by statute and cannot cover diabetes screening tests more than twice every 12 months.[16]

Lastly, CMS finalizes its proposal to simplify the regulatory definition of “diabetes” for diabetes screening[17], MNT[18] and DSMT[19]. Specifically, CMS removes codified clinical test requirements from the definition of diabetes so that CMS can be flexible to adapting to evolving clinical standards and add tests if needed. CMS also finalizes its proposal to define diabetes for screening purposes simply as “diabetes mellitus, a condition of abnormal glucose metabolism” and to remove the definition of pre-diabetes. These definitions support existing regulatory frequency limitations and therefore are no longer needed to separate how frequently someone can get the screening tests.

GENERAL SUPERVISION OF THERAPY ASSISTANTS WILL BE ALLOWED FOR REMOTE THERAPEUTIC MONITORING SERVICES

Currently, CMS requires physical therapists and occupational therapists in private practices (PTPPs and OTPPs, respectively) to conduct direct supervision of their therapy assistants.

In this final rule, CMS finalizes its proposal to allow for lower general supervision of therapy assistants by PTPPs and OTPPs for remote therapeutic monitoring (RTM) services. The change is meant to align with CMS’ RTM general supervision policy finalized last year.

CMS is also considering revising its current direct supervision regulatory policy for PTPPs and OTPPs of their therapy assistants to the general supervision policy for all services, not just for RTM services.  CMS solicited feedback on the impacts of such a policy in the proposed rule and states that comments will be taken into consideration for possible future rulemaking.

CMS FINALIZES ADD-ON PAYMENT FOR COMPLEX E/M VISITS, REVERSES DELAY OF SPLIT/SHARED VISIT POLICY

In this final rule, CMS finalizes the change in status for HCPCS code G2211 to make it separately payable by assigning an “active” status indicator, effective from January 1, 2024. This code, known as an add-on code, characterizes office and other outpatient (O/O) E/M visits based on the kind of care being provided, specifically medical care services that serve as the focal point for a patient’s health care or part of ongoing care related to a single, serious, or complex condition.

CMS additionally updated its utilization assumptions for the code, estimating that G2211 would be billed with 38% of O/O E/M visits initially, and 54% when fully adopted.

CMS revises the definition of the “substantive portion” for split (or shared) visits to align with the changes in the CPT E/M guidelines. For Medicare billing purposes, “substantive portion” now means more than half of the total time spent by the physician who performs a split (or shared) visit with a Non-Physician Practitioner or a substantive part of the medical decision-making. This definition applies to all split (or shared) visits except for critical care visits, which continue to use more than half of the total time. CMS will update its regulations accordingly. CMS originally proposed to delay implementation of the definition in the CY 2024 proposed rule but now finalizes the policy, stating that the reason for the reversal is to prevent the administrative burden that occurs when policies are repeatedly delayed.

NEW SOCIAL DETERMINANTS OF HEALTH RISK ASSESSMENT G-CODE ADDED TO E/M VISITS AND MEDICARE ANNUAL WELLNESS VISITS

CMS finalizes a new stand-alone code, G0136, for administration of a standardized, evidence-based Social Determinants of Health Risk (SDOH) Assessment, 5-15 minutes, not more often than every 6 months. The time spent on HCPCS code G0136 should count towards the 60 minutes per month spent on the performance of Chronic Care Management (CCM) services.

CMS is not finalizing the requirement that the practitioner who performs the Social Determinants of Health (SDOH) risk assessment must also be capable of providing Comprehensive Health Assessment (CHA), Personalized Prevention Plan (PPP), other care management services, or have partnerships with Community-Based Organizations (CBOs). However, the practitioner conducting the SDOH risk assessment is expected to, at a minimum, refer the patient to relevant resources and incorporate the assessment results into their medical decision making, diagnosis, and treatment plan for the visit.

CMS will require that any SDOH needs identified during the SDOH risk assessment service be documented in the medical record. While the use of Z codes for documentation is not mandatory, it is considered appropriate to document SDOH needs in the medical record, and CMS encourages the use of Z codes across its programs to better understand beneficiary needs. CMS is also implementing a payment limitation for the SDOH risk assessment service, allowing it once every 6 months per practitioner per beneficiary.

CMS FINALIZES CHANGES TO THE MEDICARE SHARED SAVINGS PROGRAM

CMS builds on changes made in the CY 2023 PFS final rule to the Medicare Shared Savings Program (MSSP) with the goal of furthering value-based care. CMS expects these changes to increase participation in the Shared Savings Program by 10 to 20 percent. A Fact Sheet specifically addressing the Medicare Shared Savings Program proposals finalized in this year’s rule can be found here.

CMS Establishes New Medicare CQM Collection Type for Accountable Care Organizations (ACOs) Participating in the APP

CMS finalizes its proposal to establish a new Medicare Clinical Quality Measure collection type for ACOs under the Alternative Payment Model (APM) Performance Pathway (APP), known as Medicare CQMs. This will serve as a transition collection type to help ACOs build infrastructure, skills, knowledge, and expertise to report all payer/all patient Merit-Based Incentive Payment System (MIPS) measures by focusing on Medicare patients with claims encounters with ACO professionals with specialty designations used in the Shared Savings Program assignment methodology. ACOs will continue to have the option to report quality data using other collection types.

Additionally, CMS finalizes policies to apply the Shared Savings Program’s health equity adjustment to an ACO’s MIP Quality performance category score, which CMS believes will enhance health equity.

Changes to Benchmarking Methodology Finalized

CMS finalizes its proposed refinements to financial benchmarking methodology for ACOs in agreement periods beginning January 1, 2024, and subsequent years to apply a symmetrical cap to risk score growth in ACO’s regional services area, similar to the cap applied on an ACO’s risk score growth. CMS states applying a symmetrical cap within the beneficiary population and regional service area will improve the accuracy of the regional update factors for ACOs in regions with high risk score growth.

Currently, CMS uses the CMS-Hierarchical Condition Categories (CMS-HCC) risk adjustment model that is applicable for the calendar year to identify a Medicare FFS beneficiary’s prospective HCC risk score for the corresponding benchmark year or performance year. When the CMS-HCC risk adjustment model changes, the Shared Savings Program performance year and benchmark year comparisons are calculated using different CMS-HCC risk adjustment models, which can negatively impact ACOs with the highest average risk scores, participating in two-sided models, or that have been participating longer. CMS finalizes its proposal to apply the same CMS-HCC risk adjustment model used in the performance year to all benchmark years, when calculating prospective HCC risk scores to risk adjust expenditures used to establish, adjust and update an ACO’s benchmark.

In addition, CMS finalizes proposals to further mitigate the impact of the negative regional adjustment on ACO benchmarks, to encourage ACO participation for providers caring for medically complex, high-cost beneficiaries. ACOs that would have seen an overall negative regional adjustment under the previous methodology will benefit from this policy.

UPDATES TO THE QUALITY PAYMENT PROGRAM

In the annual PFS rulemaking, CMS includes its proposals for the Quality Payment Program (QPP), which includes two tracks: Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs). MIPS includes four performance categories: quality, cost, improvement activities, and promoting interoperability.

MIPS Proposals

In 2020 rulemaking, CMS finalized creation of the MIPS Value Pathways (MVPs), a reporting option for MIPS that the agency believes will provide a more cohesive participation experience by aligning activities from the four MIPS performance categories around a certain specialty, medical condition, or patient population. CMS will add five new MVPs related to:

• Women’s Health
• Infectious Disease, Including Hepatitis C and HIV
• Mental Health and Substance Use Disorder
• Quality Care for Ear, Nose, and Throat (ENT), and
• Rehabilitative Support for Musculoskeletal Care.

In addition, CMS finalizes revisions to the following MVPs:

• Adopting Best Practices and Promoting Patient Safety within Emergency Medicine;
• Advancing Cancer Care;
• Advancing Care for Heart Disease;
• Advancing Rheumatology Patient Care;
• Coordinating Stroke Care to Promote Prevention and Cultivate Positive Outcomes;
• Improving Care for Lower Extremity Joint Repair;
• Optimal Care for Kidney Health;
• Optimal Care for Patients with Episodic Neurological Conditions;
• Patient Safety and Support of Positive Experiences with Anesthesia;
• Supportive Care for Neurodegenerative Conditions; and
• Value in Primary Care (previously the Promoting Wellness and Optimizing Chronic Disease Management MVPs).

Furthermore, CMS finalizes several updates to the MIPS performance categories, including:

• Modifications to the quality performance category;
• Adding five new episode-based measures to the cost performance category beginning with the CY 2024 performance period, among other cost performance category proposals;
• Adding five, modifying one, and removing three improvement activities; and
• Policy modifications to the Promoting Interoperability performance category.

CMS has posted resources on 2024 QPP Final Rule Changes here.

APM Proposals

Current CMS policy is to require that 75 percent of clinicians in each APM entity use Certified Electronic Health Record Technology (CEHRT) for an APM to be considered an Advanced APM. CMS proposed to remove the 75 percent threshold and instead specify that each APM entity be required to use certified EHR technology. CMS finalizes this policy but is delaying implementation by one year, to apply to performance years beginning on or after January 1, 2025.

CMS also finalizes a number of changes to APM incentives, including maintaining the Qualifying APM Participant (QP) and Partial QP threshold percentages as required by the CAA, 2023.

Lastly, CMS proposed to increase the performance threshold for all MIPS reporting types from 75 points to 82 points but finalizes a policy to maintain the performance threshold of 75 points for the CY 2024 performance period. When finalizing the 75-point threshold, CMS considered stakeholder feedback, with many commenters noting that health systems and physician practices continue to face financial and resource constraints and are still recovering from the PHE.

CMS FINALIZES POLICIES FOR ADVANCING ACCESS TO BEHAVIORAL HEALTH SERVICES

CMS finalizes several policies to enhance access to behavioral health services. As required by the CAA, 2023, CMS will allow for Part B coverage and payment for the services of marriage and family therapists (MFTs) and mental health counselors (MHCs), including eligible addiction, alcohol, or drug counselors who meet qualifications requirements for MHCs, by permitting these providers to enroll in Medicare. CMS will update Behavioral Health Integration Codes to allow MFTs and MHCs to provide their services in primary care settings. As additionally required by the CAA, 2023, CMS establishes two new HCPCS codes, GPFC1 and GPFC2, for psychotherapy.

CMS will also expand the provider types that can bill Health Behavior Assessment and Intervention (HBAI) services, modify hospice Conditions of Participation to meet CAA, 2023 requirements regarding hospice interdisciplinary groups, and apply an adjustment to the work RVUs for psychotherapy codes to increase the valuation for timed behavioral health services. In response to public comments, CMS will also apply the adjustment to the work RVUs to psychotherapy codes that are billed with an E/M visit and to the HBAI codes.

UPDATES TO MEDICARE AND MEDICAID PROVIDER AND SUPPLIER ENROLLMENT POLICIES

CMS has the authority to revoke or deny a Medicare provider’s or supplier’s enrollment for several reasons, including failure to adhere to Medicare enrollment requirements or termination by another federal health program. CMS can also deactivate a provider’s or supplier’s Medicare billing privileges under certain circumstances, including in lieu of a revocation when the Agency believes a more modest penalty is warranted. CMS does not finalize the proposal that CMS may revoke enrollment if managing employees or organization have been convicted of a misdemeanor within the previous 10 years. CMS finalizes other new reasons for enrollment revocations including civil judgments under the False Claims Act and non-compliance with enrollment standards.

Additionally, CMS establishes a new provider enrollment status called “stay of enrollment” which would represent a “pause” in enrollment prior to any deactivation or revocation and requires all Medicare provider and supplier types to report additions, deletions, or changes in their practice locations within 30 days.

CMS WILL EXTEND IN-HOME ADDITIONAL PAYMENT FOR VACCINE ADMINSTRATION BEYOND COVID-19 VACCINES TO THREE OTHER PREVENTIVE VACCINES

Currently, CMS provides for additional payment for the administration of a COVID-19 vaccine in the home. In light of results from a CMS study demonstrating that in-home additional payment improved healthcare access to vaccines for often-underserved Medicare populations and significant support from public comments, the agency is finalizing its proposal to extend this payment policy to include the other three preventive vaccines included in the Part B preventive vaccine benefit — the pneumococcal, influenza, and hepatitis B vaccines — when provided in the home beginning January 1, 2024. This change broadens the conditions for the payment to reflect preventive vaccines for the other diseases.

The payment amount for all four vaccines will be identical. As with the COVID vaccination payment, this additional payment amount will be annually updated using the percentage increase in the Medicare Economic Index (MEI) and adjusted to reflect geographic cost variations. The CY 2024 in-home additional payment for Part B preventive vaccine administration is $38.55 which would be geographically adjusted. CMS will limit the additional payment to one payment per home visit, even if multiple vaccines are administered during the same home visit though every vaccine dose that is furnished during a home visit will still receive its own unique vaccine administration payment.

CMS CODIFIES COVERAGE AND PAYMENT FOR COVID-19 MONOCLONAL ANTIBODY PRODUCTS

In the CY 2023 PFS final rule, CMS established its policy to continue coverage and payment for monoclonal antibodies that are used for pre-exposure prophylaxis (PreP) of COVID-19 under the Part B preventive vaccine benefit if they meet certain applicable coverage requirements even after the Emergency Use Authorization (EUA) declaration for drugs and biological products is terminated so long as such products have market authorization. CMS also established that payments for the administration of monoclonal antibodies that are used for PreP of COVID-19 would be adjusted for geographic cost variations using the PFS Geographic Adjustment Factor (GAF). However, CMS did not codify these changes in their regulations.

In this final rule, CMS codifies the regulations to reflect policies for monoclonal antibodies for PreP of COVID-19 that were finalized in the CY 2023 PFS final rule. The agency did not finalize any payment regulations for monoclonal antibodies indicated for PreP of the dominant strains of COVID because none are currently approved. However, when a new monoclonal antibody for PreP of COVID-19 becomes authorized for use, CMS intends to establish specific coding and payment rates for the administration of that product through technical direction to Medicare Administrative Contractors (MACs) and information posted publicly on the CMS website, and subsequently propose coding and payment rates for the administration of that product via rulemaking. CMS also reiterates that the in-home additional payment policies do not apply to the administration of monoclonal antibodies for PreP of COVID-19.

POLICIES TO IMPLEMENT REQUIRED MANUFACTURER REFUNDS FOR DISCARDED SINGLE-DOSE OR SINGLE-USE DRUGS

Under current law,[20] drug manufacturers must provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use package drug. The refund amount is equal to the amount of discarded drug that exceeds an applicable percentage, which is generally required to be at least 10 percent of total charges for the drug in a given calendar quarter. This refund applies to refundable single-dose container or single-use package drugs beginning January 1, 2023.

In this rule, CMS finalizes the following policy changes to implement this provision:

• Plans to issue the initial refund report to manufacturers no later than December 31, 2024, and to require that the refund amounts specified in the initial refund report be paid no later than February 28, 2025, except in circumstances where a report is under dispute.
  • Note this differs from the preliminary refund report which CMS notes in this rule and the 2023 PFS final rule that it plans to send to manufacturers no later than December 31, 2023, to provide estimated discarded amounts based on available claims data from the first 2 quarters of CY 2023.
• Plans to issue the second annual refund report to manufacturers no later than September 30, 2025, and once annually thereafter no later than September 30 for every year thereafter prior to or around the time CMS plans to send Part B inflation rebate reports for the first quarter of the following year and to require manufacturers to pay refunds specified in each report (beginning with the second report) no later than December 31 of the year in which the report is sent, except in circumstances where a report is under dispute.
• All reports (except the initial refund report) include lagged claims data (that is, true-up information) for quarters from two calendar years prior and include the following information for updated refund quarters to address lagged claims data: the updated total number of units of the billing and payment code of such drug, if any, that were discarded during the refund quarter and the updated refund amount that the manufacturer is liable for with respect to such updated quarter that was not previously accounted for in the prior year’s report
• Includes information for lagged claims data in all reports other than the initial report and that such data would be used to calculate revisions to the manufacturer refund amount
• Methodology for apportioning financial responsibility for the refund amount where there are multiple manufacturers of a refundable drug (e.g., refundable drug is produced by one manufacturer, and also by one or more manufacturer(s) that is a repackager or relabeler or cases of authorized generic products marketed under the same FDA-approval)
• Establishes a hybrid approach to determining when it is appropriate to increase the applicable percentage for a drug with unique circumstances:
  • Categorical unique circumstances: CMS will identify drugs that have unique circumstances of low volume doses and rarely utilized orphan drugs in the report sent to manufacturers and apply the increased applicable percentages based on these unique circumstances. If a manufacturer believes that the incorrect applicable percentage was applied to the refund calculation, the manufacturer may submit a dispute regarding the calculation by submitting an error report.
  • Application process: CMS establishes a process for manufacturers to request CMS consider whether an increased applicable percentage would be appropriate for a particular drug in light of its unique circumstances (and if an increased applicable percentage is considered appropriate it would then be proposed in future notice-and-comment rulemaking).
    • CMS indicates that it will issue additional guidance and communications to providers and suppliers prior to the application window for increased applicable percentages taking effect in CY 2025.
    • CMS reiterates that it does not consider weight-based doses, BSA-based doses, varying surface area of a wound, loading doses, escalation or titration doses, tapering doses, and dose adjustments for toxicity as unique circumstances warranting an increased applicable percentage because the agency believes manufacturers can optimize the availability of products for these circumstances to limit the percentage of discarded units for a drug.
  • Modifies the JW and JZ modifier policy for drugs payable under Part B from single-dose containers that are furnished by a supplier who does not administer the drug, and
  • Finalizes proposal to not include skin substitutes for purposes of identifying refundable drugs for calendar quarters during 2023 and 2024 though the agency will revisit this in future rulemaking.

In addition to the above policy changes, CMS reiterates that the requirements on provider reporting of the JW modifier, which is used in calculating refund obligations, do not apply to units billed to Medicare Advantage plans and that the refund amount calculations under section 1847A(h)(3) of the Act will not include units billed to Medicare Advantage plans.

POLICY CHANGES ALIGN PART B DRUG BENEFICIARY OUT-OF-POCKET COSTS WITH INFLATION REDUCTION ACT PROVISIONS 

To align with provisions in the Inflation Reduction Act (Pub. L. 117-169, August 16, 2022) regarding payment limits for beneficiary out-of-pocket costs for certain Part B drugs, CMS finalizes several changes:

• Codifies requirement that the payment limit for new biosimilars furnished on or after July 1, 2024, during the initial period when Average Sales Price (ASP) data is not available, is the lesser of (1) an amount not to exceed 103 percent of the Wholesale Acquisition Cost (WAC) of the biosimilar or the Medicare Part B drug payment methodology in effect on November 1, 2003, or (2) 106 percent of the lesser of the WAC or ASP of the reference biological, or in the case of a selected drug during a price applicability period, 106 percent of the maximum fair price of the reference biological,
• Updates regulatory text regarding the payment limit for certain biosimilars with an ASP that is not more than the ASP of the reference biological as being ASP plus 8 percent of the ASP of the reference biological for a 5-year period[21],
• Updates regulatory text to reflect requirement that beneficiary coinsurance for a Part B rebateable drug is to be based on the inflation-adjusted payment amount if the Medicare payment amount for a calendar quarter exceeds the inflation-adjusted payment amount, beginning on April 1, 2023, and
• Codified that for insulin furnished through an item of durable medical equipment (DME) on or after July 1, 2023, the deductible is waived and coinsurance is limited to $35 for a month’s supply of insulin furnished through a covered item of DME.

CMS RECEIVES PUBLIC COMMENTS TO REQUEST FOR INFORMATION ON DEFINITION OF SELF-ADMINISTERED DRUGS AND CODING FOR COMPLEX DRUG ADMINISTRATION

Drugs that are “usually self-administered” are statutorily excluded from Medicare Part B coverage and payment, and drugs that fall under this category are determined by the Medicare Administrative Contractors (MACs). CMS has provided guidance and definitions to MACs when determining drugs that are “usually self-administered.” As part of this guidance, CMS requires MACs to publish a description of the process used to determine whether a drug is self-administered, and a list of drugs that fall under this determination, usually called the “self-administered drugs (SAD) list.” Each MAC maintains their own SAD list, and as such, lists are not identical across jurisdictions. Noting stakeholder concerns with these policies, CMS sought feedback on 1) definitions of “administered,” “self-administered,” “usually,” and “by the patient; and 2) the process for issuing decisions on whether drugs are classified as “not usually self-administered by the patient” and any associated changes.

CMS has received comments from stakeholders concerned that existing Medicare billing and coding guidelines are inadequate for complex non-chemotherapeutic drug administration infusion services. Additionally, CMS notes there were several public comments on the complex non-chemotherapeutic drug administration infusion services asking CMS to provide additional guidance clarifying the conditions considered complex which could be reported using the chemotherapy administration CPT codes and noting concerns with MAC guidance. In response, CMS referenced their existing guidance and indicated it would consider these comments for potential future rulemaking.

CLINICAL LAB FEE SCHEDULE REVISED DATA REPORTING PERIOD AND PHASE-IN OF PAYMENT REDUCTIONS

CMS finalizes its proposal to make changes to data reporting and payment requirements for clinical diagnostic laboratory tests (CDLTs) in accordance with the CAA, 2023. CMS will delay the reporting period by another year to the first quarter of 2024 (i.e., January 1, 2024 through March 31, 2024) and limit reductions in payment to 0 percent for 2023 and 15 percent for each year 2024 through 2026.

For background, the Protecting Access to Medicare Act (PAMA) of 2014 required Clinical Lab Fee Schedule (CLFS) to be based on private payer data. CMS required laboratories to collect the rates they were paid by private payers (data collection period) and report these rates to CMS (data reporting period). The most recent data collection period was January 1, 2019 through June 30, 2019, and the reporting period was originally January 1, 2020 through March 31, 2020. The reporting period has been delayed several times due to statutory amendments.

CMS FINALIZES PAYMENT FOR DENTAL SERVICES LINKED TO CERTAIN COVERED TREATMENTS

CMS finalizes its proposal to allow payment for certain dental services inextricably linked to other covered services used to treat cancer including chemotherapy services, Chimeric Antigen Receptor T- (CAR-T) Cell therapy, and the use of high-dose bone modifying agents (antiresorptive therapy).

In the CY 2023 PFS final rule, CMS established that Medicare payment under Parts A and B could be made for dental services when furnished in the inpatient or outpatient setting under certain circumstances, such as when linked to the clinical success of a covered medical service. CMS specifically finalized payment for dental services inextricably linked to other covered medical services, such as dental exams and necessary treatments prior to organ transplants, cardiac valve replacements, and valvuloplasty procedures. CMS also finalized Medicare payment for dental exams and necessary treatments prior to the treatment for head and neck cancers, beginning CY 2024. CMS will now codify this previously finalized policy and specifies that payment can be made for dental services prior to, or during, head and neck cancer treatments, whether primary or metastatic.

CMS COLLECTS COMMENTS ON DIGITAL THERAPEUTICS  

To keep up with the increasing involvement of prescribed mobile apps that work with medical devices or alongside other prescribed therapies, CMS previously expanded Medicare payment under Part B for use of technologies through new RPM and RTM codes. Still, these codes are not enough to cover all types of digital therapeutics used in practice. CMS states it must understand opportunities and challenges related to coverage and payment policies, and claims processing in digital therapeutics. CMS sought comments on various specific questions regarding standards, data collection, staff training, type and frequency of circumstances that involve multiple devices and multiple clinicians[22] Some stakeholders commented that CMS had the authority to cover digital therapeutics under the Medicare Part B DME benefit. CMS responds that digital therapeutics must meet the specific Medicare Part B criteria[23] and definition of DME to be covered under that benefit. CMS states these comments will be used to inform potential future policy development.

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This Applied Policy® brief was prepared by Simay Okyay McNutt with support from the Applied Policy team of health policy experts. If you have any questions or need more information, please contact her at sokyay@appliedpolicy.com or at (202) 558-5272.

[1] This conversion factor includes the update from the Protecting Medicare and American Farmers from Sequester Cuts Act (PMA, Pub. L. 117-71).

[2] See Table 116 on page 1948of the unpublished rule.

[3] Section 1848(c)(2)(B) of the Social Security Act.

[4] See Table 10 on page 96 of the unpublished rule.

[5] HCPCS codes 93797 and 94624

[6] HCPCS codes 95970,95983, and 95984

[7] HCPCS codes 97110,97112,97116,97161-97164,97530,97750,97763,90901

[8] HCPCS codes 99221-99223, 99234-99239, 99281-99283

[9] This provision applies only to telehealth services specified on the Medicare Telehealth Services List under section 1834(m)(4)(F)(i) of the Act that are permitted to be furnished via audio-only technology as of the date of enactment of the CAA, 2023.

[10] 85 FR 84472

[11] Pub. 100-04, chapter 12, section 190.3.6

[12]See page 298 of the unpublished rule.

[13] § 410.18

[14] Section 1861(yy)(1)(B) of the Act

[15] Sacks et al. Consensus Report from ADA on Guidelines and Recommendations for Lab Analysis in the Diagnosis and Management of Diabetes. Diabetes Care 2023; dci230036. https://doi.org/10.2337/dci23-0036

[16] 1861(yy)(3) of the Act

[17] § 410.18(a)

[18] § 410.130

[19] § 410.140

[20] Section 90004 of the Infrastructure Investment and Jobs Act (Pub. L. 117-9).

[21] For existing qualifying biosimilar biological products which CMS paid using ASP as of September 30, 2022, the applicable 5-year period began on October 1, 2022. For new qualifying biosimilar biological products for which CMS paid using ASP between October 1, 2022 – December 31, 2027, the applicable 5-year period began the first day of the calendar quarter. https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price/asp-reporting

 

[22] Since the existing RTM codes can be billed by only one practitioner, only once per patients, per 30-day period and only when at least 16 days of data have been collected, even when multiple medical devices are provided to the patient.

[23] 1861(n) of the Act.