Breaking Down Upcoming Legislative Changes

The new year brings several changes to legislation that will affect how health care in the United States is delivered and reimbursed. These changes include updates to Medicare payment policies, changes to prior authorization requirements, and expansion of telemedicine services (Table 1). In this article, we will look at the details of these legislative changes and explore their potential impact on dermatologists and their patients.

Medicare Payment Cuts

One of the most significant changes to health care legislation in 2023 is the reduction in Medicare payments to providers. Despite the rising costs of running a dermatology practice,¹ payments for Medicare services have continued to decline for another consecutive year.² The Centers for Medicare & Medicaid Services (CMS) releases an annual regulatory rule termed the Medicare Physician Fee Schedule (PFS). The 2023 PFS initially proposed a 4.5% pay cut for physicians beginning January 1; however, this was partially averted through the $1.7 trillion federal omnibus spending bill and national physician-led efforts.^3,4 As a result, physicians will now face a 2% Medicare reimbursement cut beginning in 2023, which is expected to increase to an estimated 3.5% in 2024.^5,6 These changes are expected to result in decreased reimbursement from the CMS directly, as well as from private insurers, which typically base their rates on a percentage of what Medicare pays.⁷

Although declining reimbursement rates have been a longstanding issue for physicians, the current economic climate coupled with challenges created by the COVID-19 pandemic places significant financial strain on dermatology practices. In addition, physicians are the only providers within the Medicare program whose payments do not receive an automatic adjust­ment to account for inflation.^8,9 This statutory omission further exacerbates the impact of these payment cuts during a time of record-high inflation and economic turmoil. Dermatology practices are subject to the effects of economic volatility and are affected by staffing shortages, wage increases, and higher medical equipment and supply costs.¹⁰

Medicare beneficiaries account for a large percentage of patients who receive care in dermatology clinics, and the demand for dermatology care among the Medicare population is expected to continue to increase as the US population ages. In one study analyzing the trends of Medicare utilization, a greater number of dermatologists used Medicare from 2012 to 2015, with a corresponding increase in the number of total submitted charges to Medicare, but there was no actual increase in the amount paid out by Medicare per clinician ($137 742 in 2012 compared with $134 206 in 2015; P = .47).¹¹ Geographic disparities in the distribution of dermatologists across the United States also continue to increase due to the concentration of dermatologists in urban areas.¹² Areas with a higher density of dermatologists are correlated with increased spending and utilization of dermatology services among the Medicare-eligible population. These factors signify the potential impact on access to dermatologic care if practices are disincentivized from accepting Medicare patients due to pay cuts.

 In the long term, these economic factors may impede access to patient care through the closure of independent practices and forced consolidation of small community practices.¹³ From 2012 to 2018, 17 private equity-backed groups acquired 184 dermatology practices. In some instances, these profit-driven acquisitions have been shown to drive up costs for patients and to limit patient choice.¹³

 Increasing medical costs and decreasing physician reimbursement emphasize the need for a comprehensive reform of the current Medicare physician payment system.¹⁴ To ensure that both dermatologists and patients receive equitable support, it is important to create a more stable and permanent solution to the current system of yearly adjustments to reimbursement rates.

The Future of Prior Authorization

One frustrating aspect of current dermatology practice is the process of seeking prior authorizations for prescription medications or procedures. In a 2020 survey conducted by the American Academy of Dermatology,¹⁵ assigned practice staff spent up to 3.5 hours per day working on prior authorizations, making it one of the top administrative burdens in practice.¹⁵ A total of 60% of dermatologists reported interrupting patient visits for prior authorizations.¹⁶ The prior authorization process causes unnecessary treatment delays for patients and negatively impacts quality of care. Patients and physicians often have to choose less-optimal treatments or to abandon certain treatments entirely due to the prior authorization process.¹⁶ In a 2021 survey conducted by the American Medical Association, 34% of physicians reported that the prior authorization process led to a serious adverse event for a patient under their care, including death, hospitalization, disability, and other life-threatening events.¹⁷ For dermatologists, obtaining prior authorizations for various biologic medications and even topical medications, such as clobetasol, tretinoin, and 5-fluorouracil, can be time-consuming and adds to the already substantial administrative workload of running a practice.^16,18 The list of medications and services requiring prior authorization by insurance companies continues to grow each year.¹⁹

 Thankfully, both the CMS and lawmakers are pushing for legislation to streamline the existing prior authorization process for Medicare beneficiaries.²⁰ These reforms aim to increase efficiency, reduce administrative burden, and modernize the current process.²¹ Many of these changes are outlined in the Improving Seniors’ Timely Access to Care Act.²² This bill proposes the creation of an electronic prior authorization program and a synchronous process for fulfilling requests that are routinely approved, improves transparency by requiring plans to report metrics on prior authorization usage and approval rates to the CMS, allows for the modification of prior authorization requirements based on provider adherence, and holds insurers accountable for timely decisions with rationales for denials.²² Already receiving bipartisan support in both the House of Representatives and Senate, along with the backing of over 500 health care organizations, this bill was recently passed unanimously by the House and is expected to become law in 2023.²³

Another piece of legislation aims to exempt qualifying physicians from the prior authorization process for Medicare Advantage plans if 90% or more of their requests were approved in the preceding 12 months. The Getting Over Lengthy Delays in Care as Required by Doctors Act of 2022, or GOLD CARD Act, is modeled after a similar law in Texas that took effect in 2021 and has received satisfactory outcomes.^24,25 However, this bill would only apply to items and services and not to pharmaceutical drugs.  The CMS recently proposed a new rule in early December that will further enhance health data exchange, improve access to patient health information, and streamline the prior authorization process.^20,26 This rule addresses a number of common concerns and requires prior authorization decisions to be made within a period of 72 hours to 7 days, depending on the urgency of the request.²⁶ This is twice as fast as the current response time limit and would aim to reduce delays in drug approval. The proposed rule would also require public reporting of certain prior authorization metrics to increase the transparency of the process overall. The CMS estimates that these policies would save clinics and hospitals more than $15 billion over a 10-year period.²⁰

Prior authorization is an important tool in health care meant to optimize health care resource utilization, but the current process is inefficient and burdensome for both physicians and patients. The described policy changes may solve some of the inefficiencies in the prior authorization process, simplify tasks, and reduce the overall time spent on prior authorizations.

Telemedicine and Virtual Health Care

Since the COVID-19 pandemic, the practice of telemedicine and virtual care has rapidly grown, as has the coverage by insurance providers for these services. Through COVID-19 emergency waivers, Medicare reimbursed providers to furnish telehealth services, expanded the use of audio-only telehealth counseling for behavioral health services, and allowed dermatologists to conduct telehealth visits from their homes while billing from their currently enrolled locations.²⁷ These waiver authorities supported the rapid expansion of telehealth services and led many patients and physicians to prefer telehealth services over in-person visits.²⁸

 These blanket waivers have been renewed every 90 days since the COVID-19 public health emergency was initially declared in 2020 and are currently effective through January 11, 2023.²⁹ The CMS PFS final rule extends certain telehealth services for 151 days following the end of the public health emergency.³⁰ This temporary extension will allow for the evaluation of whether these services should become permanently covered. Several groups are urging Congress to expand and make these virtual health care policies permanent. These lobbying efforts have led to the House passing the Advancing Telehealth Beyond COVID-19 Act of 2022 bill,³¹ which aims to extend telehealth services through December 31, 2024. Other bills, including the Telehealth Extension and Evaluation Act and the Ensuring Telehealth Expansion Act of 2021, aim to provide an extension of Medicare coverage for certain telehealth tools and seek to make telehealth indefinite following the public health emergency, respectively.^32,33 The federal omnibus spending bill also extends COVID-19 flexibilities for telehealth coverage through December 31, 2024. This legislation reflects a desire from patients and providers to continue to have access to convenient telehealth services.³⁴ Given the legislative push to extend and expand telehealth waivers, it is worth examining the organizations that are advocating for these policies. Recent multibillion-dollar acquisitions of homebased care companies suggest these companies are betting on the future success of telemedicine and virtual health care. Notably, companies such as Amazon, Walmart, and Google are among the many entities lobbying for a permanent extension of telehealth flexibilities for patients.^35,36 These efforts coincide with Amazon’s recently launched Amazon Clinic, an online 24/7 telehealth marketplace that connects patients with clinicians who can diagnose, treat, and prescribe medications for a variety of conditions, including common dermatologic conditions such as acne, eczema, and rosacea.³⁷ Unlike other online-based telehealth services, Amazon Clinic only requires patients to answer a series of questions to receive a prescription, without the need for a video visit or live chat. These prescriptions can be delivered to the patient’s home via Amazon Pharmacy or sent to any local pharmacy. Amazon continues to purchase large health care information technology companies and offers patients the option of receiving virtual care visits through Amazon’s Alexa device. This evolution of modern health care raises the question of what implications these services may have for quality of care, health information privacy, and the future of dermatology practice.  The COVID-19 pandemic has greatly impacted the use of telehealth and virtual health care, with telehealth services demonstrating their effectiveness in providing high-quality medical care to patients who may have otherwise been unable to access it due to insurance coverage or geographic limitations. As the telehealth industry has rapidly grown and significant Medicare funding has been dedicated to these services, permanent reform of the law to fully support telehealth would give needed certainty to clinicians and patients who rely on it as a critical tool for delivering and accessing care. By ensuring compliance and minimizing risks, dermatologists can continue to effectively utilize telehealth to provide the best possible care to their patients.

Conclusion

In recent years, the health care landscape has undergone vast changes, with an increasing focus on value-based care and the integration of technology into the delivery of medical services. In 2023, there will be a reduction in Medicare payments to providers, expansion of telemedicine, and possible changes to the prior authorization process. These developments have the potential to impact how dermatologists practice medicine and interact with patients. As such, it is important for dermatologists to stay current on the intersection of health care, health policy, and technology to be prepared to adapt to new rules, regulations, and care delivery models. It is also crucial for dermatologists to remain active in advocacy and policy efforts to help shape the future direction of our field and to advocate for the needs of both patients and providers. By staying informed and proactive, dermatologists can position themselves to provide the best possible care to their patients in a rapidly evolving health care environment. 

References

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