NAACOS Analysis of the CY 2024 Medicare Physician Fee Schedule Final Rule

Executive Summary

On November 2, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2024 Medicare Physician Fee Schedule (MPFS) Final Rule. This regulation includes several positive changes to the Medicare Shared Savings Program (MSSP) for which NAACOS has long advocated. 

In this analysis, we provide details on key policies affecting ACOs. The rule is summarized in several fact sheets provided by CMS: MPFS Fact Sheet, MSSP Fact Sheet, and Quality Payment Program (QPP) Fact Sheet (download). 

NAACOS provided detailed comments in response to the proposed 2024 MPFS rule, with key input from members. Most policies were finalized as proposed. 

Medicare Physician Payment Policies 

• Decreases the Medicare conversion factor from $33.89 to $32.74 for 2024.
• Implements an evaluation and management visit add-on code for complexity (G2211); this code was previously delayed by Congress. CMS is proposing implementation with modifications.
• Creates new codes for community health integration services and social determinants of health (SDOH) risk assessment. 

MSSP Policies 

Assignment Methodology:

• Adds a third step to the assignment process in 2025 that would expand the assignment window for a physician visit to two years; this allows the assignment methodology to better account for beneficiaries who primarily receive services from a nurse practitioner (NP), physician assistant (PA), or clinical nurse specialist (CNS).
• Adds several new codes to the definition of primary care services used in ACO assignment. 

Benchmarks and Risk Adjustment:

• Eliminates the negative regional adjustment.*
• Modifies its use of the CMS-Hierarchical Condition Code (HCC) risk adjustment model by using the same model version in benchmark and performance years for agreements starting in 2024.*
• Phases in new risk model version over three years for all ACOs starting next year.*
• Caps the risk score growth in an ACO’s region for agreements beginning in 2024, making the cap on the ACO and its region symmetrical.* 

Quality:

• Creates a new quality reporting option for MSSP ACOs; the Medicare Clinical Quality Measures reporting option allows ACOs to report only on Medicare beneficiaries meeting assignment criteria, providing flexibility with the previous all-payer reporting requirement.*
• Changes the Quality Performance Standard calculations to use historical data.*
• Adjusts policies related to quality scoring requirements for suppressed measures.*
• Removes Certified Electronic Health Record Technology (CEHRT) threshold requirements for MSSP ACOs to instead align with Merit-based Incentive Payment System (MIPS) Promoting Interoperability (PI) requirements. 

Other:

• Modifies policies for advance investment payments (AIPs) to allow ACOs receiving AIPs to transition to a two-sided risk model under the Basic Track in Performance Year (PY) Three, to allow an exception to the recoupment policies for ACOs that early renew, to permit reconsideration of quarterly payment calculations, and to update policies related to early termination and reporting.*
• Revises MSSP eligibility requirements and clarifies definitions for experience with performance-based risk. 

Quality Payment Program Policies

• Continues CMS’ current policy of making Qualifying APM Participant (QP) determinations at the alternative payment model (APM) entity level.
• Maintains the MIPS performance threshold at 75 points for PY 2024.
• Finalizes a policy to apply MIPS Promoting Interoperability requirements to all ACO participants, with a one-year delay (effective PY 2025 and subsequent years). 

*Denotes policies for which NAACOS has advocated.