CMS Finalizes Physician Fee Schedule, with ACO Changes Relevant to Nursing Homes

The Centers for Medicare & Medicaid Services (CMS) aims to further advance its overall value-based care strategy with the finalized 20224 Medicare Physician Fee Schedule (PFS) – adding ways for medically complex, high-cost beneficiaries like those in nursing homes to participate in Medicare Shared Savings Programs (MSSPs).

Additionally, CMS therapy assistants can be more generally supervised for remote therapeutic monitoring services with changes in the PFS for 2024.

The agency also finalized its proposal to make payment when practitioners train caregivers to support patients with certain diseases, including dementia, when carrying out a treatment plan in 2024.


“Medicare will pay for these services when furnished by a physician or a non-physician practitioner (nurse practitioners, clinical nurse specialists, certified nurse-midwives, physician assistants, and clinical psychologists) or therapist (physical therapist, occupational therapist, or speech language pathologist) as part of the patient’s individualized treatment plan or therapy plan of care,” CMS said.

The PFS was finalized late Thursday, with payment amounts reduced by 1.25% overall compared to 2023. CMS is also finalizing increases in payment for visits for many services, such as primary and longitudinal care. Overall, the finalized 2024 PFS conversion factor is $32.74, a decrease of $1.15, or 3.4%, from CY 2023.

The rule involves numerous updates to accountable care organizations (ACOs), including financial benchmarking methodology for ACOs starting in January 2024 and subsequent years. There will now be a cap to risk score growth in an ACO’s regional service area.


The same risk adjustment methodology will be applied to benchmark and performance years, eliminating overall negative regional adjustment. CMS hopes this will encourage ACO participation by providers caring for medically complex, high-cost beneficiaries.

“We are finalizing our proposal to modify the calculation of the regional component of the three-way blended benchmark update factor (weighted one-third [Accountable Care Prospective Trend], and two-thirds national-regional blend), for agreement periods beginning on January 1, 2024, and in subsequent years,” according to a statement from the agency.

Such broadened criteria and an attractive high needs population track may be a major draw for those in the skilled nursing space, leaders said in October.

CMS anticipates this change will improve accuracy of regional update factors, if an ACO operates in an area with high-risk growth. The move also maintains a disincentive against coding intensity for ACOs with high market share.

“We sought to reduce the impact of negative regional adjustments in several ways for agreement periods beginning on January 1, 2024, and subsequent years, to incentivize ACOs that serve high-cost beneficiaries to join or continue to participate in the Shared Savings Program,” the agency said in a statement. “ACOs that would have had an overall negative regional adjustment under the methodology adopted in the CY 2023 PFS final rule will benefit from this policy.”

Potential future developments to MSSP policies include incorporating a higher risk track than the ENHANCED track, modifying the amount of prior savings adjustment and potential refinements to the Accountable Care Prospective Trend.

While advocacy groups like the National Association of ACOs (NAACOS) appreciated the agency’s efforts to engage more high risk beneficiaries, there was disappointment that “several favorable policies only apply to new or renewing ACOs in 2024, leaving out existing ACOs,” NAACOS President and CEO Clif Gaus said in a statement.

The agency hopes these changes will increase MSSP participation by 10% to 20%.

ACO beneficiary assignment methodology added a third step as well to provide greater recognition of the role of nurse practitioners, physician assistants and clinical nurse specialists in delivering primary care services.

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