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2016 Medicare Final Rule Released – and Congress Incorporates Medical Practices in Budget Deal

Trick or treat? On the eve of Halloween, the Centers for Medicare & Medicaid Services (CMS) issued the Final Rule for the 2016 Medicare Physician Fee Schedule. On the same day, the Senate passed an historic budget deal that fundamentally changes reimbursement for medical practices; the Bipartisan Budget Act of 2015 is expected to be signed into law by the President today.

Let’s review the changes that may impact your practice in 2016 – and beyond:

  • A small increase – 0.5% – was in place for January 1, 2016, but CMS’ efforts to revalue codes (a 0.77% reduction) will offset this near-term bump in payment.
  • After proposing to require the billing physician also be the supervising physician, CMS backed off the proposal, stating that the “physician (or other practitioner) directly supervising the auxiliary personnel need not be the same physician (or other practitioner) that is treating the patient more broadly…”
  • The date of service for transitional care management (TCM) codes will now be the date of the visit, versus the end of the month. CMS revealed that the claim can be released on that date as well, thus streamlining the billing process.
  • As a specialty, gastroenterologists received the biggest decline based on CMS’ revaluing of lower endoscopy services. Although many lower endoscopy codes were decreased – the “base” colonoscopy code, 45378, dropped from 3.69 work RVUs to 3.36, for example, the declines were expected to be even higher based on CMS’ proposal. CMS cited concerns about access to care for Medicare beneficiaries in its decision-making process. GI still takes a significant hit, however, with CMS estimating that the specialty will see an overall 4% drop from Medicare. Pathologists are on the other end of the spectrum, with an estimated 8% increase.
  • The newly covered advanced care planning (ACP) work RVUs are 1.50, (99497) with 1.40 for each additional 30 minutes (99498), but the codes are subject to cost-sharing for the patient (unless billed at the time of the patient’s Annual Wellness Visit, noting that the ACP services should be billed with a modifier -33 and are separately payable) and must be performed by a physician, advanced practice provider, or via incident to under direct supervision.
  • More telehealth services are placed on the “paid” list by Medicare including prolonged service inpatient CPT codes, 99356 and 99357, and end stage renal disease (ESRD)-related services 90963 through 90966, with the originating telehealth site reimbursed a $25.10 facility fee for each patient.
  • CMS delivered a technical correction that will benefit anesthesiologists. Following last year’s announcement that colorectal cancer screening services would be exempt from cost sharing, CMS recognized that it had left out an important component of the service – the anesthesia. In the Final Rule, CMS announced that “anesthesia services furnished in connection with, as a result of, and in the same clinical encounter as a colorectal cancer screening test will be exempt from the deductible.”
  • Federally qualified health centers (FQHCs) and rural health clinics (RHCs) benefited from CMS’ change in stance regarding payment for Chronic Care Management and TCM; both services can now be billed and paid outside of the center’s all-inclusive rate. The same billing rules in apply to FQHCs and RHCs, with the exception of supervision; direct is required for health centers to bill. One more big change for health centers; as of April 1, 2016, RHCs will be required to report CPT(r) codes on all Medicare claims, although reimbursement won’t change.
  • CMS outlined its plans to establish a program to promote the use of appropriate use criteria (AUC) for advanced diagnostic imaging services, which will be required for ordering physicians to consult as of January 2017. This rule outlines the initial component of the new Medicare AUC program, which will be focused on the development of criteria by “provider-led entities.” CMS determines its role to be establishing the “process for specifying applicable AUC and proposing the requirements for AUC development, starting with how PLEs will become qualified to develop or endorse AUCs.”
  • The government’s incentive programs were updated with new measures in the Physician Quality Reporting System (PQRS) and the Shared Savings Program, and a modification of the Value-based Payment Modifier (VBPM). To address “reliability concerns,” the minimum number of patients is increased to 125 to include the practice in the cost assessment. Further, solo practitioners and small groups won’t be subject to the VBPM’s all-cause hospital readmissions measure in 2017 and 2018.
  • Although there are specific parameters to follow, CMS is allowing hospitals to provide financial assistance to physicians in hiring advanced practice providers (APPs) as a new exception to the physician self-referral law. Social workers and clinical psychologists are also included, with CMS revealing that subsidies are limited to situations in which the APP is providing primary care or mental health care services.

Expected to be signed into law today, the bipartisan budget deal included key elements impacting the health care industry. As has been done in years past, the sequestration cuts were tacked on for yet another year, making those 2% reductions to all Medicare payments extend until 2025. Practices that are currently billed as hospital outpatient departments (OPDs) under Medicare’s provider-based billing are grandfathered, but any new OPDs that are physically off the hospital’s campus – defined as 250 yards – will not get an extra payment from Medicare as of January 1, 2017. “New” is considered those OPDs established as of the date the bill is signed into law (i.e., today or tomorrow). These off-campus OPDs won’t be hard to distinguish, because CMS had already required a new place of service code – 19 – for off-campus OPDs as of January 1, 2016.

While we await the President’s signature on the budget deal, the 1,358-page Final Rule will be released officially on November 16, 2015. Until then, click this link to view.

Woodcock & Associates: Changing the Way You Work