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2015 Proposed Medicare Physician Fee Schedule Released

On July 11, 2014, the Centers for Medicare & Medicaid Services (CMS) published the proposed 2015 Physician Fee Schedule (PFS) for Medicare. In past years, the proposed PFS has focused on the rates for the upcoming year. This time, the proposed schedule has a more limited scope due to the Protecting Access to Medicare Act (PAMA) of 2014 — signed into law on April 1 – which provides for a 0% increase in fees for services rendered between January 1 and March 31, 2015. However, CMS announced a negative 20.9% update for the remainder of 2015 following the expiration of PAMA.

CMS reveals little about its EHR Incentive Program in the proposed rule, other than mentioning its support of health information exchanges (HIEs) and outlining a refinement of reporting CQMs for a cohort of participants, including those who are members of an accountable care organization (ACO) under Medicare’s Shared Savings Program. Presumably, CMS will soon release an update on the EHR program to follow its highly publicized proposed rule issued on May 20, 2014, which pushed back the meaningful use timeline.

PAMA also gives CMS the right to examine the value of nine new categories of codes – the so-called “misvalued” codes, an action that CMS intends to take as articulated in the July 11 proposed rule. If finalized, this would clearly impact reimbursement for some physicians in the future, as codes, such as those used for mammography – now most commonly performed via a digital platform versus the more resource-intensive film – are to be scrutinized and (most likely) lowered. CMS increases its scope by proposing a new protocol for assessing and billing codes it has identified as misvalued. Doing so will effectively reduce the agency’s almost exclusive reliance on recommendations from the American Medical Association’s Relative (Value) Update Committee (RUC). CMS asserts that this new process will achieve “added transparency in [the] development of payment rates.”

As announced in the 2014 Medicare PFS final rule, chronic care management will be reimbursed as of January 1, 2015. Somewhat surprisingly, CMS opted to ignore the existing CPT® codes for complex chronic care services, instead announcing that it will create a new code – dubbed GXXX1 for now. GXXX1 is intended to describe services furnished to patients with multiple (two or more) chronic conditions expected to last at least 12 months or until the death of the patient, and which place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline. The new code, proposed at the rate of $41.92, stipulates that the service must be for 20 minutes or more and billed only once in a 30-day span for qualified patients. These services can be non-face-to-face with the physicians’ employees, or simply with clinical staff under his or her “general” supervision (notably, “direct” employment is not required). In an interesting twist, the qualifying service must be supplied by a practice using a certified EHR system. In another expansion of reimbursement, group behavioral counseling for obesity can soon be reported and billed under two new proposed codes – GXXX2 and GXXX3, the latter for patients participating in larger groups (up to 10 patients).

Changes to relative value units leave most specialties whole, with the exception of radiation oncology and radiation therapy centers for which CMS proposes decreases of four percent and eight percent, respectively. These reductions stem from a reconsideration of the radiation treatment vault as an indirect rather than a direct practice expense for equipment. Ophthalmology also sees a small decrease at two percent, based on the recognition and reversal of a mistake related to the historical valuation of the malpractice component of several procedure codes commonly used by the specialty.

For practices that have converted to provider-based services – a common strategy to boost reimbursement for hospitals and health systems after acquiring physician practices – CMS warns: “…we continue to seek a better understanding regarding the growing trend toward hospital acquisition of physician offices.” CMS notes that “MedPAC continues to question the appropriateness of increased Medicare payment and beneficiary cost-sharing when physician offices become hospital outpatient departments, and to recommend that Medicare pay selected hospital outpatient services at PFS rates.” In order to gather data, CMS proposes a new modifier for provider-based practices to use, but offers no details about it other than to request comments from readers.

Perhaps the most unanticipated revelation in the proposed PFS is CMS’ intention to assess the payment system for global surgical packages. Historically, procedures and surgeries have been paid under a 10- or 90-day period, with all services rendered during that time period – including the pre-operative, post-operative, as well as the surgery itself – included in a single, “global” payment. (Minor procedures and surgeries typically have a 0-day package, which means that any services billed outside of the surgery are paid separately.) After citing significant concerns with this long-standing payment method, CMS reveals its objective to “transition… over several years all 10- and 90-day global codes to 0-day global codes.” The schedule calls for 10-day codes to make the switch in 2017 and the remaining codes in 2018.

Other issues include an expansion of data made available to the public on Medicare’s Physician Compare website; a remarkably substantial number of changes for PQRS, which converts from a bonus program to a payment-adjusting initiative in 2015 (in other words, no more bonuses for compliance, just penalties for those who do not participate in PQRS or fail to do so successfully); revisiting CMS’ current quality performance standard for ACOs and proposing changes to the quality measures required of them; and paving the way for CMS’ newest carrot-and-stick initiative, the Value-Based Payment Modifier, which will be applied to all physicians in 2017, based on 2015 performance.

For more information, click here for a link to the Proposed Rule, which was released to the public on July 3, and officially published on July 11, 2014.

It’s important to note that these are all proposed changes; the final rule is expected to be released by November 1.

Woodcock & Associates: Changing the Way You Work