Psych News Alert: Biden Signs Spending Bill That Reverses Part of 2024 Medicare Physician Fee Cut

On March 9, President Biden signed into law the Consolidated Appropriations Act, 2024 (HR 4366) to avert a partial government shutdown. The $460 billion spending package includes a 1.68% reduction to the 3.4% cut to the Medicare Physician Fee Schedule conversion factor that took effect on January 1.  (The conversion factor is an element in the equation that determines physician reimbursement for every payment code.)

The new payment rate went into effect on March 9; it is not retroactive to January 1. APA continues to work for full repeal of the physician pay cut, which was automatically enacted to offset overall increases in Medicare payment.

The impact of the remaining overall payment reduction on individual psychiatrists depends on what kinds of services they provide. The fee schedule, released last November, did include some good news for psychiatrists; positive provisions included an increase in reimbursement for providing psychotherapy as an add-on to evaluation and management (E/M) services and the extension of some telepsychiatry provisions into 2024.

The appropriations act also reauthorizes some substance use disorder treatment programs that were created under the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act.

Other provisions in the appropriations act include the following:

• A requirement that the Department of Health and Human Services provide guidance to states on how they can improve behavioral and primary care integration, including via the Collaborative Care Model.
• Indefinite extension of the requirement that state Medicaid plans cover the costs of medication assisted treatment for substance use disorders.
• A provision that prohibits termination of Medicaid and CHIP (Children’s Health Insurance Program) coverage because of incarceration.
• A provision making permanent the state Medicaid option to cover treatment at a residential or inpatient substance use disorder program with over 16 beds.
• An extension of the Geographic Practice Cost Index (GPCI) floor related to physician work through December 31. The GPCI accounts for differences in practice expenses among different regions of the country.
• An extension of Alternative Payment Model bonus payments at 1.88% for performance year 2024.
• An extension of funding for the Teaching Health Center Graduate Medical Education Program through December 31.

For related information see the Psychiatric News article “Psychiatrists Win Important Gains in 2024 Fee Schedule.”

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