On November 12, 2014, CMS published its final rule to update the Medicare physician fee schedule (MPFS) for CY 2015. Highlights of the sweeping rule include the following:

  • The Protecting Access to Medicare Act (PAMA) of 2014 provides for a 0% update to the conversion factor (CF) for MPFS services furnished between January 1, 2015 and March 31, 2015, with the CF adjusted afterwards according to the statutory Sustainable Growth Rate (SGR) formula. In the final rule, CMS determined that based on the zero percent update under PAMA and adjustments necessary to maintain budget neutrality, the CF for the first quarter of 2015 will be $35.8013 (compared to $35.8228 in 2014). CMS also announced that the CF for April 1, 2015 through December 31, 2015 will be $28.2239 – a 21.2% reduction — unless Congress establishes an alternative CF or otherwise modifies the SGR formula. While there is an expectation that Congress eventually will override this payment cut, the form any such action might take is speculative at this point.

  • The final rule includes numerous provisions intended to address potentially misvalued codes. Notably, CMS has adopted its proposal to transform all 10- and 90-day global surgery codes to 0-day global codes. Under this provision, CMS will include in the value for these procedures all services provided on the day of surgery, and pay separately for visits and services actually furnished after the day of the procedure. CMS intends to begin with revaluing the 10-day global services in CY 2017, and follow with the 90-day global services in CY 2018. CMS also discussed implementation of a PAMA provision authorizing CMS to use alternative approaches to establish practice expense (PE) relative value units (RVUs), including the use of data from other suppliers and providers of services, including outpatient hospital data, but CMS is not adopting any particular policy to incorporate such data into PE values at this time. Moreover, while CMS proposed to review a number of specific high-expenditure specialty service codes that have not been recently reviewed, CMS is not proceeding with this review at this time in order to concentrate efforts on its plan to revalue services with global periods. CMS is revising how it accounts for costs associated with x-ray services, but CMS did not adopt its proposal to refine the way it values radiation therapy costs.
  • CMS is adopting, with modifications, is proposal to establish a new process to enhance transparency in MPFS ratesetting and ensure that virtually all payment input revisions are subjected to public comment prior to being used for payment. In short, CMS will include in its annual proposed MPFS rule the proposed values for all new, revised, and potentially misvalued codes for which it has complete American Medical Association’s Relative Value Update Committee (RUC) recommendations by February 10 (instead of the proposed January 15th) of the preceding year. For 2016, a transition year, if CMS does not receive timely RUC recommendations, CMS will establish interim final values for these codes in CY 2016. Beginning with valuations for CY 2017, CMS expects to propose values for most new, revised, and potentially misvalued codes and before establishing final values, use G-codes as necessary in to facilitate continued payment for certain services for which CMS does not receive RUC recommendations in time to propose values, and adopt interim final values in the case of wholly new services for which there are no predecessor codes or values and for which CMS does not receive RUC recommendations in time to propose values.
  • CMS adopted numerous changes to the Physician Quality Reporting System (PQRS) for 2015, including the addition of 20 new individual measures and two measure groups, and removal of 50 measures. CMS also is requiring eligible professionals who see at least one Medicare patient in a face-to-face encounter to report on at least one measure from a new cross-cutting measures set in addition to other required measures. The rule also includes revisions to Shared Savings Program/accountable care organization (ACO) quality requirements, including changes to the scoring strategy to recognize quality improvement, revisions to quality measure benchmarks, and revisions to individual quality measures.
  • CMS adopted changes to the Physician Value-Based Payment Modifier program, under which CMS will adjust payment to physicians based on the quality of care compared to costs. Under the final rule, CMS will apply the Value Modifier to all physicians, including those in groups with two or more eligible professionals (EPs) and solo practitioners, as proposed, but CMS is delaying until 2018 (instead of 2017) application of the Value Modifier to non-physician EPs in groups with two or more EPs and to non-physician EPs who are solo practitioners. CMS also is, among other things, modifying its proposed 2017 payment adjustment framework to reduce the maximum amount of payment at risk (2% instead of the proposed 4%) for groups with fewer than 10 physicians and solo practitioners.
  • CMS will require physicians to report a place of service code on professional claims to distinguish services furnished in an off-campus provider-based department (hospitals similarly will be required to report a modifier for such services). The place of service code will be required for professional claims as soon as it is available, but not before January 1, 2016.
  • CMS is adopted changes to its Physician Payment Sunshine Act regulations, also known as the Open Payments program. These provisions are discussed in a separate post.
  • Among many other things, the final rule also: updates malpractice RVUs; revises Geographic Practice Cost Indices; reduces beneficiary cost-sharing associated for anesthesia related to screening colonoscopies; adds to the list of services that can be furnished to Medicare beneficiaries under the telehealth benefit annual wellness visits, psychoanalysis, psychotherapy, and prolonged evaluation and management services; and establishes a payment rate of $40.39 for chronic care management services for beneficiaries who have multiple, significant chronic conditions. Note that while CMS had proposed to establish a revised local coverage determination (LCD) process for new draft clinical diagnostic laboratory test LCDs, in response to concerns raised by commenters, CMS is not adopting changes to the LCD process in this final rule. Likewise, in the proposed rule, CMS raised concerns about “operational and program integrity issues” arising from the use of substitute (locum tenens) physicians to fill staffing needs or to replace a physician who has permanently left a medical group, particularly with regard to potentially inappropriate use of the departed physician’s Provider Transaction Access Numbers (PTAN) or National Provider Identifier (NPI). CMS solicited comments on specific questions associated with substitute physician billing arrangements, including with regard to implications for the physician self-referral law. In the final rule, CMS noted that it received a few comments on issues raised in this solicitation, which CMS will consider in any rulemaking on this subject, but the agency did not discuss specific plans for future action.

Comments on a limited number of provisions, including interim final RVUs, will be accepted if received by December 30, 2014.