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In a disappointing response to advocacy that brought the concerns of millions of health care providers to Capitol Hill, the U.S. Congress approved an end-of-year spending package that fails to fully restore cuts included in the 2023 Medicare Physician Fee Schedule. Rather than provide the needed full 4.5% in funding that would offset reductions in the conversion factor, lawmakers opted for a smaller 2.5% increase this year and an even smaller 1.25% increase in 2024. The resulting cuts will affect 27 specialties, including physical therapy.

The spending decision was included in sweeping omnibus legislation that incorporates elements of multiple bills whose fates hadn't been resolved. While the resulting last-minute legislative mixed bag is short on fee schedule fixes, the bill does include APTA-supported gains in other areas including telehealth, workforce diversity, lymphedema treatment, and the role of PTs and PTAs in the Department of Veterans Affairs. [Update from original article:  The bill was signed into law on Dec. 29.]

'Failure to Fully Commit to Protecting Patient Access'

For the health care provider community, the most significant feature of the omnibus package — the provision of a 2.5% conversion factor funding increase rather than the needed 4.5% infusion — was the final chapter in a yearlong fight to convince Congress to once again intervene to buffer the harm included in the upcoming Medicare Physician Fee Schedule.

As it has for the past two years, in 2022 the U.S. Centers for Medicare & Medicaid Services finalized a fee schedule for 2023 that offsets increases to payment for codes related to evaluation and management with significant cuts to the conversion factor, a key element used in determining payment associated with codes used by a wide range of providers.

APTA and 100 other provider and patient organizations joined in an effort to press Congress to provide a 4.5% spending increase to fully offset the fee schedule cuts. In the end, rather than stepping in at the 11th hour to provide full or nearly full offsets as it did for the past two years, Congress opted to scale back the relief. 

While the 2.5% funding increase will lessen the severity of the cuts, providers will still be left to deal with reductions just as the country's health care system continues to recover from the coronavirus pandemic. The response from provider groups was immediate, with organizations such as the American Medical Association and the Surgical Care Coalition expressing their frustration at Congress’ failure to provide the full 4.5% funding.

In a statement released Dec. 20, APTA President Roger Herr, PT, MPA, voiced the association's "dismay at Congress' failure to fully commit to protecting patient access to needed care," and vowed to continue the fight to address the true problem — a Medicare fee schedule system in need of reform.

"This spending bill underscores our belief that the entire fee schedule system needs an overhaul," Herr stated. "Providers should not be made to carry an outdated system's dysfunction on their backs, and we cannot expect Congress to come to the rescue year after year."

Amid the Disappointment, Some Bright Spots

The omnibus package isn't all bad news, however: The legislation is likely to pass with several key provisions that support APTA's advocacy priorities.

Among the most significant: APTA-supported legislation that provides a two-year extension of telehealth services under Medicare, including those provided by PTs and PTAs. Currently, the telehealth provisions are tied to the public health emergency, with the special provisions ending 151 days after the PHE is declared over. Under the package, those allowances would continue until Dec. 31, 2024, at the earliest.

Other wins include:

Stepped-up emphasis on physical therapy in the Department of Veterans Affairs. The omnibus package includes language APTA was successful in having added to the 2023 VA appropriations bill requesting VA ensure treatment alternatives to opioids, such as physical therapy, are available to veterans where they are most needed. VA is also asked to examine how more competitive pay for PTs and PTAs can help increase patient access to physical therapy, and how the Health Professions Scholarship Program can be expanded to include PTs. The language also directs VA to develop a staffing plan on how to employ PTs and PTAs within primary care, rural health, women’s health, and other areas.

Home health research. Lawmakers included language that would require CMS to share its simulations on what home health pay would look like under the previous Medicare home health pay system, compared with the Patient-Driven Groupings Model now in use. Home health providers have raised numerous concerns with how CMS has come up with the 7.9% behavioral adjustment cut to the 30-day pay rate, which CMS says is needed to keep pay budget-neutral between the old pay system and the PDGM. The agency said in its 2023 pay rule it would phase in the cuts so only 3.5% are set to go into effect next year, and home health providers are set to get a 0.7% pay bump overall for 2023. The bill also asks CMS to provide a description of actual behavior changes between 2020 and 2026 that were the result of the new pay system.

Workforce diversity. The APTA-supported Allied Health Workforce Diversity bill was included in the omnibus package. This legislation will create a new grant program for accredited PT and PTA education programs to offer scholarships and stipends to recruit and retain individuals who are underrepresented in the field of physical therapy, including individuals with disabilities, from ethnic and racial minority populations, and from disadvantaged backgrounds.

Deferred PAYGO-related reductions. In its final package, Congress deferred the implementation of a federally mandated "pay-as-you-go" deficit control budget rule until 2025. That rule, now off the table for two years, will require increases in the federal deficit to be offset by increased revenue or cuts to spending and includes a 4% cut to Medicare.

Lymphedema treatment. The final package folds in provisions of the Lymphedema Treatment Act, which expands Medicare coverage for lymphedema-related pressure garments. The new coverage will go into effect in 2024 andcould affect more than 3 million Medicare beneficiaries.

Funding for NIH. The bill provides $47.5 billion for the National Institutes of Health, an increase of $2.5 billion or 5.6%. APTA joined with provider groups earlier this year in encouraging Congress to provide an increase to NIH’s 2023 budget. APTA supported this increase through our work with the Disability Rehab Research Coalition.

Funding for pediatrics. The bill also includes $15 billion in funding for 2023, an increase of $904 million or 6%, for special education state grant programs that support services to an estimated 9 million students and children with disabilities, including those participating in early intervention and preschool programs.

Funding for the Centers for Disease Control and Prevention. The bill includes $9.2 billion for CDC, an increase of $760 million above the 2022 fiscal year level. This includes $903 million in transfers from the Prevention and Public Health Fund. More than half of the increase is directed to significant investments in our nation’s public health infrastructure. APTA supported this increase through our work with the CDC Coalition.

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