How Will Medicare Change in 2024?

The Medicare Physician Fee Schedule (MPFS) 2024 is set to bring massive changes to Medicare. This proposed law by the Centers for Medicare & Medicaid Services (CMS) will affect the payment rates, quality payment program (QPP), Medicare telehealth, and much more.

The rule also addresses various policies, such as

•       Speech-language pathology;
•       Quality reporting;
•       Payment cuts for audiology;
•       New provision for access to audiology services;
•       Changes to coding for remote therapeutic monitoring;
•       Alternative payment models;

So, what changes can we expect in Medicare health insurance in 2024? This article will discuss the significant changes that the MPFS will bring.

Telehealth Coverage Extended

During the pandemic, the Centers for Medicare & Medicaid Services (CMS) extended the Medicare Telehealth List by adding over 150 services. These services included telephone visits and the services of the emergency department.

While some services were added only temporarily until the public health emergency (PHE) ends, others would receive extended coverage for additional five months after the PHE ends. However, many expect that to change in 2023 as CMS wants to extend coverage for all temporary telehealth services after the PHE ends for an additional five months.

Moreover, the CMS also plans to include various other services on the coverage list, such as ophthalmology services, therapy services, etc.

By expanding the telehealth service, AMA aims to ensure the fair payment of physicians’ services. It has collaborated with more than 100 physicians and healthcare firms to develop particular suggestions for the CMS and Congress.

Payment Rates

The CMS calculates the MPFS payment rates using an annual conversion rate. As per summary, the proposed Medicare conversion factor (CF) for 2023 is $33.0775. This figure shows a decrease of 4.4% ($1.53) from the previous year’s CF.

The main reason for the decline is due to Congress’s expiration of a one-time 3% positive adjustment to stop the physician payment cuts of approximately 9.75%. Besides the decrease in the CF, the CMS’s regulatory impact analysis (RIA) shows that audiologists will experience no changes in their payments as per the proposed policy.

Changes in the Premium for Medicare Part D

According to the Centers for Medicare and Medicaid Services, the monthly premium for Part D coverage will fall next year. The premium for Part D will be closer to $31.50, which shows a decrease of 1.8% from 2022.

Medicare Part D is very significant since it assists people with this coverage in buying their generic prescription and brand-name drugs. The program has more than 49 million beneficiaries, as per the CMS.

A study by the American Society of Health-System Pharmacists shows that overall drug spending will increase by more than 7.5% in 2021. The overall drug spending reached $576 and is estimated to grow from around 4% to 6% this year.

Furthermore, CMS is also publishing additional details, like the Part D national average monthly bid amount, to assist the plan sponsors in setting their premiums.

Changes in the Premium for Medicare Part B

Medicare Part B is also critical coverage for many people. It provides coverage for outpatient services, including all doctor-related services, and unlike Part A, people have to pay a premium for it.

Understanding how Part B is calculated is critical to understanding the changes. The Medicare department has set the premium for anyone with an income of $91,000 per annum or a combined income of $182,000 for a couple.

Anyone making more than $91,000 or $182,000 combined will have to pay a surcharge known as the Income Related Monthly Adjustment Amounts (IRMAA). When setting the premiums for 2021 to 2022, the Medicare department considered a new medication for Alzheimer’s, known as the Aduhelm.

Since the medication was expensive, they considered it a key factor when setting the premiums for Part B. However, the manufacturer cut production of the medicine by half, and it wasn’t as effective as expected. Therefore, we see a change in the premiums of Part B in 2023.

In fact, it came down $5.20 and is $164.90 in 2023.

Changes in Medicare Enrollment Period

Lastly, we see a change in the enrollment periods of Part A and B for Medicare coverage. Previously, you became eligible for the healthcare program during your IEP (Initial Enrollment Period), which refers to the seven months surrounding your 65th birthday.

So, you could enroll three months before or three months after your 65th birthday. However, this enrollment process was quite complex and challenging for many people to understand. There were some issues regarding enrolling in the seven-month window when your coverage begins.

For instance, if you enroll one month after your 65th birthday, there is a possible coverage lapse of two months. This complicated process changed with the introduction of the new proposal.

Starting from January 1, 2023, if you sign up the month you turn 65 or during the last 3 months of your Initial Enrollment Period, your coverage starts the first day of the month after you sign up.

Wrapping Up

The changes in Medicare premiums take place annually to account for the increasing healthcare expenditures and inflation. Most people were surprised after a massive and unexpected jump of $22 in Part B premiums for 2022. The primary reason for this jump was the Aduhelm drug for Alzheimer’s disease.

While Medicare changed and adjusted the premiums after reassessing Aduhelm, the changes will take effect in 2024. Therefore, we saw a change in the premiums of Part B along with other changes in Medicare for 2024.