Medicare Delays Penalties for Appropriate Use Program
By Emma Freer


After long-standing warnings from the Texas Medical Association and others in medicine about Medicare’s appropriate use criteria (AUC) program, Medicare is delaying the next phase of the program, in which physicians face monetary penalties.

The Centers for Medicare & Medicaid Services (CMS) recently announced it would postpone indefinitely the payment penalty phase of AUC, which was expected to begin as soon as Jan. 1, 2023.

TMA experts welcomed the news, saying the beleaguered program requires physicians to jump through administratively burdensome hoops to reach its goal of cutting down on excessive imaging tests.

Under the AUC program, physicians ordering advanced imaging tests would have to use an electronic portal to consult Medicare’s criteria, which evaluate whether a test meets Medicare’s definition of “appropriate use.” Eventually, under full implementation of the program, Medicare potentially could deny claims from physicians who don’t document that system check. CMS also could label physicians’ test-ordering as “outliers” and subject them to prior authorization.

TMA has repeatedly warned CMS about the significant challenges posed by the AUC program, including in a September 2021 letter sent with 39 other medical societies to three lawmakers, who had requested a report on the program.

“If ever fully implemented, the AUC program would apply to every clinician who orders or furnishes an advanced diagnostic imaging test … and would be layered on top of other CMS quality programs that are intended to … incentivize appropriate use of health care resources,” TMA and the other signatories wrote. “Especially at a time when physician practices and hospitals are experiencing staffing shortages, they should not be expected to make investments in activities that are administratively burdensome and costly when the consultation of AUC could be incentivized through existing CMS quality programs.”

Congress established the AUC program in 2014, when it passed the Protecting Access to Medicare Act, but CMS has since struggled with its implementation, according to the same letter. TMA and the other medical societies wrote that the program has grown obsolete as new Medicare payment and delivery models – including the Merit-Based Incentive Payment System, accountable care organizations, and alternative payment models – have evolved to hold physicians responsible for health care resource use.

TMA has endorsed CMS’ previous moves to delay the AUC program and has applauded the agency for recognizing the challenges it creates for physicians, including in a 2021 comment letter to CMS.

“While TMA acknowledges the importance of evidence-driven ordering, we maintain operational concerns with the AUC program that must be addressed before its enforcement,” then-TMA President E. Linda Villarreal, MD, wrote. “Further, the COVID-19 [public health emergency] greatly limits physician practices’ ability to prepare or to participate in an educational campaign and operations testing period.”

Last Updated On

July 18, 2022

Originally Published On

July 13, 2022

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Emma Freer

Associate Editor

(512) 370-1383

Emma Freer is a reporter for Texas Medicine. She previously worked in local news, covering city politics, economic development, and public health. A native Clevelander, she graduated from Columbia Journalism School and the University of St. Andrews.

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