On Saturday, March 9, President Biden signed into law the Consolidated Appropriations Act, 2024, which provides updated funding for calendar year 2024. The bipartisan package of six spending bills has garnered headlines for staving off a government shutdown, but it also has several key implications for healthcare. Notably, it increases the Medicare Physician Fee Schedule (MPFS) conversion rate to $33.29 starting on March 9, 2024, from the previously finalized $32.74 (down from the CY 2023 rate of $33.89).
The conversion factor rates that Medicare finalized in November 2023 included a 3.37% reduction in MPFS rates and went into effect on January 1, 2024. In response to intense lobbying efforts and inflationary pressures, the newly signed law results in an amended 1.68% decrease that will be in effect from March 9 through December 31, 2024.
Despite initial lobbying efforts, it is important to note that this conversion rate change is not retroactive. However, this change will result in a 2% decrease on average for 2024, which is in line with annual lobbying targets.
Other Notable Healthcare Implications
- One-year extension of incentive payments for participation in certain alternative payment models, though the incentive has been reduced from a 3.5% bonus to a 1.88% bonus
- Extension of increased inpatient hospital payment adjustments for certain low-volume hospitals through 2026
- Extension of the Medicare-dependent hospital program through the end of 2024
- Elimination of an $8 billion cut to Medicaid disproportionate share hospital payments through 2026
- Extension of the work geographic index floor under the Medicare program through the end of 2024
- Extension of adjustment to the calculation of hospice cap amounts under Medicare through 2033
- Increases in graduate medical education funding
What’s Next?
ECG closely monitors policy updates and regulatory changes at the national level that may impact healthcare organizations and providers. While this short-term funding measure provides a reprieve, reviews of the bill in its entirety will continue throughout this month, when the formal appropriations process is finalized.
Provider organizations should proactively analyze the impact of these legislative changes on their practice.
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Edited by: Matt Maslin
