HR6545-118

1. Short title This Act may be referred to as the Physician Fee Schedule Update and Improvements Act.

2. Extending floor for work geographic index Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w–4(e)(1)(E)) is amended by striking January 20, 2024 and inserting January 1, 2025.

3. Increasing support for physicians and other practitioners in adjusting to Medicare payment changes Section 1848(t)(1)(D) of the Social Security Act (42 U.S.C. 1395w–4(t)(1)(D)) is amended by striking 1.25 percent and inserting 3 percent.

4. Extending incentive payments for participation in eligible alternative payment models Section 1833(z) of the Social Security Act (42 U.S.C. 1395l(z)) is amended— in paragraph (1)— in subparagraph (A)— by striking In the case and inserting Subject to subparagraph (E), in the case; by striking ending with 2025 and inserting ending with 2026; and by inserting and 2026 after with respect to 2025; and by adding at the end the following new subparagraph: Subject to clause (ii), with respect to an amount payable under subparagraph (A) for 2026 to an eligible professional who is a qualifying APM participant for such year, such amount shall be reduced, in the case such participant has received payment under such subparagraph— for at least 4 years but fewer than 7 years, by 34 percent; or for 7 years, by 67 percent. If an eligible professional described in clause (i) increased such professional’s financial risk (as specified by the Secretary) with respect to the furnishing of items and services during the most recent period for which data are available (which may be less than a year) for 2026 as compared to such professional’s financial risk with respect to the furnishing of such items and services during the most recent period for which data were available (which may be less than a year) for 2025, the Secretary may reduce the amount payable under subparagraph (A) for 2026 to such professional by a percentage that is less than the percentage otherwise applicable to such amount under clause (i) (and which may include 0 percent). in paragraph (2)— in subparagraph (B)— in the subparagraph heading, by striking 2025 and inserting 2026; and in the matter preceding clause (i), by striking 2025 and inserting 2026; in subparagraph (C)— in the subparagraph heading, by striking 2026 and inserting 2027; and in the matter preceding clause (i), by striking 2026 and inserting 2027; and in subparagraph (D), by striking 2024, and 2025 and inserting 2024, 2025, and 2026; and in paragraph (4)(B), by striking 2025 and inserting 2025 and 2026. Section 1848(q)(1)(C)(iii) of the Social Security Act (42 U.S.C. 1395w–4(q)(1)(C)(iii) is amended— in subclause (II), by striking 2025 and inserting 2026; and in subclause (III), by striking 2026 and inserting 2027. (E)Special payment rule for 2026(i)In generalSubject to clause (ii), with respect to an amount payable under subparagraph (A) for 2026 to an eligible professional who is a qualifying APM participant for such year, such amount shall be reduced, in the case such participant has received payment under such subparagraph—(I)for at least 4 years but fewer than 7 years, by 34 percent; or(II)for 7 years, by 67 percent.(ii)ExceptionIf an eligible professional described in clause (i) increased such professional’s financial risk (as specified by the Secretary) with respect to the furnishing of items and services during the most recent period for which data are available (which may be less than a year) for 2026 as compared to such professional’s financial risk with respect to the furnishing of such items and services during the most recent period for which data were available (which may be less than a year) for 2025, the Secretary may reduce the amount payable under subparagraph (A) for 2026 to such professional by a percentage that is less than the percentage otherwise applicable to such amount under clause (i) (and which may include 0 percent).;

6. Timely updates to direct costs used to calculate practice expense RVUs Section 1848(c)(2)(B) of the Social Security Act (42 U.S.C. 1395w–4(c)(2)(B)) is amended by adding at the end the following new clause: The Secretary shall, not less often than every 5 years, update the prices and rates, as applicable, for each of the direct costs inputs described in subclause (II) used in the methodology for calculating the practice expense relative value units under this subsection for physicians’ services. Updates made pursuant to the previous sentence shall be made in the same year for all direct cost inputs described in such subclause. For purposes of this clause, the direct costs inputs described in this subclause are clinical staff wage rates, prices of medical supplies, and prices of equipment. In making the updates under this clause, the Secretary shall consult with relevant stakeholders, including physician specialty societies. (vii)Timely updates to direct costs used to calculate practice expense relative value units(I)Simultaneous updates to direct cost inputs at least once every 5 yearsThe Secretary shall, not less often than every 5 years, update the prices and rates, as applicable, for each of the direct costs inputs described in subclause (II) used in the methodology for calculating the practice expense relative value units under this subsection for physicians’ services. Updates made pursuant to the previous sentence shall be made in the same year for all direct cost inputs described in such subclause.(II)Direct costs input categories describedFor purposes of this clause, the direct costs inputs described in this subclause are clinical staff wage rates, prices of medical supplies, and prices of equipment.(III)ConsultationIn making the updates under this clause, the Secretary shall consult with relevant stakeholders, including physician specialty societies..