Ruminating on Reimbursement

Last week saw the release of over 3,000 pages of new proposed regulations in the outpatient and physician fee schedule rules. No, I have not read it all. While there are many things that are very important in the physician fee schedule rule, I have no need nor any desire to get into the details of the physician quality payment programs and my need to understand any changes to telehealth billing is minimal.

But if you are working in the physician billing realm, reading the proposed rule is absolutely mandatory. There are several new codes being proposed, including a very unique code for infectious disease doctors to use in addition to their Evaluation and Management (E&M) code to compensate the doctor for the inherent complexity of infectious disease assessment and treatment. While this is great news for ID doctors, one has to wonder why ID got such a code and not rheumatology or oncology or pulmonary medicine or any other specialty.

While the physician fee schedule is of less importance to my work, if the Centers for Medicare & Medicaid Services (CMS) starts messing around with the Two-Midnight rule or the inpatient only list, you bet I’ll be scrutinizing it and passing on the information.

And fortunately for 2025, everyone can take a deep sigh of relief. The Two-Midnight rule remains intact and was not even mentioned, either in the inpatient or outpatient rule. Now we all would have loved CMS to scold the Medicare Advantage (MA) plans bit, telling them to stop the games and follow the rule but they did not.

I can also report that there are no substantive changes to the inpatient-only list (IPO). Eight codes were added, three for liver transplant patients and five for dental procedures.

On the other hand, there were changes to outpatient payments as is done every year. This year Medicare is proposing to increase the payment for observation patients by $47.34 and increase payments for outpatient joint replacements by $215.76. Please don’t spend all this added revenue at once.

On the other end of the payment scale, the most expensive outpatient therapy on Addendum B is Hemgenix, a onetime infusion for hemophilia. It has a payment rate of $3.6 million. And that reminds me, last week CMS put out a transmittal that they are changing the formatting of the notices sent to patients to allow 10-digit dollar amounts. Imagine opening your mail from Medicare and seeing a charge for $10,000,000.

And you may have already heard that while hospitals get small payment increases for 2025, the physician fee schedule gets another 2.8 percent cut. I did read some try to blame this on the administration since CMS is an executive branch agency, but payment rates are regulated by laws passed by Congress. When will we reach the breaking point when doctors stop seeing Medicare patients? Well, if there is no Congressional fix, that point will be much closer than ever before.

Moving on, we know how the MA plans have been having trouble understanding the Two-Midnight rule, continuing to deny inpatient admissions for a myriad of reasons, none of which are valid, but now it appears at least one plan, the one “U” all know, does not even know how to count midnights. They are refusing to acknowledge that midnight counting begins with the start of symptom-related care. I have been told that hospital representatives will be meeting with CMS this week to discuss these continued violations of federal regulations. Will it fix anything? Who knows. Now if you want to file complaints with CMS on MA plan malfeasance, I have the most recent complaint form and instructions posted on ronaldhirsch.com.

Finally, alert your finance team that Aetna has made a change to an online policy that they will now be denying payment for 30-day readmissions to any hospital in the health system that uses the same Tax ID number.  It’s no longer readmissions to the same hospital.

If your Aetna contract lets them unilaterally make contractual changes via their website, tell your CFO to get that fixed.