Consolidated Appropriations Act, 2024 – Impact on Healthcare Providers
Published March 20, 2024

Consolidated Appropriations Act, 2024 – Impact on Healthcare Providers

On March 9, President Biden signed into law the Consolidated Appropriations Act, 2024, avoiding a looming partial government shutdown. The new law includes the following provisions impacting healthcare providers. In the CAA 2024, Congress has applied several short-term fixes rather than making any significant changes to existing programs.

Medicare Physician Fee Schedule. Since January 1, 2024, the MPFS conversion factor has been $32.74, a 3.37% reduction from 2023’s factor of $33.89. The CAA 2024 reduces this cut by half, increasing the conversion factor to $33.32 for services furnished between March 9 and December 31, 2024. (The $32.74 conversion factor still applies to services furnished between January 1, 2024, and March 8, 2024, even if those services have not yet been billed.)

APM Incentive Payments. Congress approved a one-year extension to incentive payments under the Quality Payment Program for physicians and non-physician practitioners who participate in certain alternative payment models, albeit at a lower rate. For performance year 2023, the bonus equals 3.5% of Medicare Part B payments for personally performed services. For performance year 2024, the bonus will be 1.8%.  

Geographic Practice Cost Index Floor (GPCI). CAA 2024 extends GPCI floor for physician work under the MPFS through the end of 2024. This floor raises the work GPCI value to 1.0 (the national average) for any locality that would otherwise have an index value below that level.

Medicaid Disproportionate Share Hospital Program. Congress reduced the statutory four-year, $32 billion cut to the program to a three-year, $24 billion cut. The first $8 billion will take effect in 2025, meaning no DSH cuts in 2024.

Medicare-Dependent Hospital Program. Congress extended this supplemental payment program for three additional months, to December 31, 2024. Absent further Congressional action, the MDH program will be discontinued in 2025.

Expanded Low Volume Hospital Program. Like the MDH program, the enhanced LVH program has been extended through the end of calendar year 2024. Presently, a hospital qualifies for LVH payments if it has less than 3,800 total discharges and is located more than 15 road miles from another hospital paid under the Medicare Inpatient Prospective Payment System. Absent further Congressional action, the LVH program qualifications will be less than 200 discharges and more than 25 road miles.

Community Health Centers. The CAA 2024 includes $270 million in new annual funding for community health centers. The funding is backdated to the beginning of the current fiscal year and brings the program’s total annual funding to $4.27 billion.

Other Funding Extensions. Congress also extended through December 31, 2024, funding for the National Health Service Corps with an additional $35 million, the Teaching Health Center Graduate Medical Education program with a $48.5 million increase, and funding for the Special Diabetes Programs with a $10 million increase.

What’s Missing? Earlier versions of the legislation had included stricter price transparency requirements, reduced payments for drug administration services in grandfathered off-campus hospital outpatient departments, mandatory reporting of ownership information, and 340B drug discount program reporting requirements. After all of the wheeling and dealing to produce a final bill, however, these provisions did not make the final cut.

Also absent from the CAA 2024 are extensions of the Medicare telehealth flexibilities set to expire at the end of this year. Absent Congressional action, Medicare no longer will cover most telehealth services furnished to beneficiaries in their home or to individuals residing in urban areas.

If you would like information about the CAA, or any matter involving healthcare compliance, our executives are happy to help. Please contact them via email below or call (800) 270-9629.

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