Ten Key Payment Policies in the Proposed 2015 Medicare Physician Fee Schedule

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While the rest of us were heading out the door for the holiday weekend, the Centers for Medicare & Medicaid Services (CMS) in the late afternoon of July 3 posted the proposed 2015 Medicare Physician Fee Schedule.

CMS does not propose to make any payment update for 2015, noting the Protecting Access to Medicare Act of 2014 provides for a 0% payment update for services furnished during the first quarter of 2015.  According to CMS, any payment update – positive or negative – for services provided on or after April 1, 2015, is the subject of the legislative process, not agency rulemaking.

The payment policies proposed by CMS in the 607-page document, however, will have a direct and lasting impact on Part B providers’ day-to-day operations.  From this point forward, there is no turning back on the road to value-based purchasing in the Medicare program.

Comments on the proposed rule are due to CMS by September 2, 2014, the day after Labor Day.  The final rule will be published around Thanksgiving.
(1) Chronic Care Management
As promised last year, CMS will move forward with payment for non-face-to-face chronic care management (CCM) services.  Beginning January 1, 2015, Medicare will make a per-beneficiary-per-month payment (at a proposed rate of $41.92) for CCM services provided to patients with two or more significant chronic conditions.

With two exceptions, CMS has not changed the elements of CCM services outlined in the 2014 Medicare Physician Fee Schedule Final Rule.  (Those requirements are detailed in PYA’s very-soon-to-be-updated white paper on CCM services.)  First, CMS eliminated the requirement that CCM services be furnished under direct physician supervision (i.e., physician present in the office suite), opting instead for general supervision (no physician presence requirement).  This change is welcome news, as it opens up new opportunities in delivering CCM services that will be detailed in our updated white paper.

Second, CMS will require that a provider furnishing CCM services utilizes an electronic health record (EHR) system certified by the National Coordinator for Health Information Technology (ONC).   CMS previously had discussed imposing some sort of separate standards that providers would have to meet to bill for CCM services, such as certification as a patient-centered medical home.  Instead of going that route, the agency chose this more limited requirement intended to ensure members of the care team have immediate access to the most updated information informing the care plan.

(2) Value Modifier

Over the last three years, CMS has introduced the value-based payment modifier for the Medicare Physician Fee Schedule.  The value modifier provides for differential payment to solo practitioners and physician groups based on the quality of care they provide to Medicare beneficiaries compared to the cost of that care over a specified period of time.

Based on their relative scores on specified quality and efficiency measures, solo practitioners and physician groups will be placed in one of nine quality tiers ranging from high quality/low cost to low quality/high cost.  Each tier will have a corresponding upward, downward, or neutral payment adjustment.

The agency has made available to providers resources detailing the calculation and application of the value modifier.  The payment differentials go into effect in 2015 for groups with 100 or more eligible professionals and in 2016 for groups with ten or more.

In the proposed rule, CMS announces its plans to expand the value modifier in 2017 to apply to all physicians and non-physician practitioners.   CMS proposes also to increase the maximum upward and downward adjustments from -2.0/+2.0 in 2015 and 2016 to -4.0/+4.0 in 2017.  That is, solo practitioners and groups in the lowest tier (as well as those that do not meet reporting requirements for the Physician Quality Reporting System [PQRS]) would see a negative 4% payment adjustment while those in the highest tier would benefit from a positive 4% payment adjustment.

CMS also proposes solo practitioners and groups with fewer than ten eligible professionals would not be subject to downward adjustments in 2017 so long as they meet PQRS reporting requirements.  Those that do not meet those requirements, however, will be subject to the full negative 4% payment adjustment.

(3) Physician Feedback Program/QRURs

Later this summer, CMS will make available on its portal individualized Quality and Resource Use Reports (QRURs) for all solo practitioners and group practices based on 2013 data.  Each QRUR will include the recipient’s performance on the quality and cost measures used to calculate the value modifier as well as the specific performance tier to which the recipient would be assigned based on its scores on those measures.

For those groups subject to the value modifier in 2015, the QRUR also will show how the group’s payments will be affected.  CMS strongly encourages all providers to access their QRURs once they are available to better understand their current performance levels and how to improve their scores on quality and cost measures.

In the proposed rule, CMS states it will make available informal review mechanisms for providers to request certain limited corrections to their QRURs.  For 2015, such requests will have to be made by January 1, 2015.  CMS intends to formalize and expand the review process in 2016 and beyond.

(4) Physician Quality Reporting System

After years of bonus payments for physicians who reported specific quality information to CMS, PQRS switches gears in 2015.  Now, physicians who did not report in 2013 will be subject to a downward payment adjustment.  Failure to report in 2014 will mean a downward adjustment in 2016.

In the proposed rule, CMS outlines updates to PQRS related to the 2017 payment adjustment.  In addition to increasing the downward adjustment from 2% to 4%, CMS proposes adding 28 new individual measures and two new measures groups to fill existing gaps.   Also, CMS intends to require physicians to report measures from a newly proposed set of cross-cutting measures (i.e., measures of improvements in patient functional status) in addition to any other required reporting.

The proposed rule includes several changes to the methods and manner in which quality data is to be submitted.  Finally, CMS continues its phased approach for public reporting of PQRS data on the Physician Compare website.  By 2016, the number of group-level and individual measures to be publicly reported will be expanded significantly, giving beneficiaries more information on which to base treatment decisions.

(5) Open Payment Act 

The Open Payments program requires applicable manufacturers of covered drugs, devices, biologicals, and medical supplies to report payments or other transfers of value they make to physicians and teaching hospitals to CMS.  This information will be made available to the public on CMS’ website through searchable databases.

Now excluded from the reporting requirements are payments related to certain accredited or certified continuing medical education events.  CMS proposes to eliminate this Continuing Education Exclusion in its entirety, noting this will create a more consistent reporting requirement.

(6) Elimination of Global Surgery Periods 

CMS proposes to eliminate all 10- and 90-day global codes in 2017, noting that many providers are not performing the number of post-surgical visits contemplated by these codes.  To address this potential for misvaluation of surgical services, CMS plans to make one payment for all services rendered on the day of surgery and to pay separately for visits and services actually furnished any subsequent day.

(7) Expanded Telehealth Services

CMS proposes to include four new services on the list of services that can be furnished to Medicare beneficiaries under the telehealth benefit.  These include annual wellness visits, psychoanalysis, psychotherapy, and prolonged evaluation and management services.

(8) Medicare Shared Savings Program Quality Measures 

The proposed rule includes updates to parts of the Medicare Shared Savings Program regulations. First, CMS proposes to reward accountable care organizations (ACOs) that make year-to-year improvements in quality performance scores by adding a quality improvement measure that adds bonus points to each of the four quality measure domains based on improvement.

Second, CMS intends to make revisions to reflect up-to-date clinical guidelines and standards of practice, reduce duplicative measures, increase focus on claims-based outcome measures, and reduce the ACO reporting burden.  New measures would be added to focus on avoidable admissions for patients with multiple chronic conditions, heart failure, and diabetes; depression remission; all-cause readmissions to a skilled nursing facility; and stewardship of patient resources.  Also, the existing composite measures for diabetes and coronary artery disease would be updated.

Finally, CMS proposes that during a second or subsequent participation agreement period, an ACO would continue to be assessed on the quality performance standard that would otherwise apply to an ACO if it were in the third performance year of the first agreement period.

(9) Off-Campus Hospital Departments

CMS proposes to begin collecting data on services furnished in off-campus provider-based departments beginning in 2015.  Specifically, hospitals and physicians would be required to report a modifier for those services furnished in an off-campus, provider-based department on both hospital and physician claims.  CMS would use this data to evaluate whether practice expense methodology should be revised in response to the growing number of hospital acquisitions of physician practices.

(10) Adjustments for Misvalued Codes
CMS continues its statutorily mandated hunt for misvalued codes, i.e., those codes for which work and/or practice expense (PE) relative value units (RVUs) are overstated based on comparison to actual practice.  For 2015, CMS has identified that special building requirements to house linear accelerators do not represent a direct cost in its PE methodology; instead, it is accounted for in the indirect PE methodology.

CMS, therefore, proposes to remove these building requirements as a direct PE input from radiation treatment procedures.  This seemingly minor change is expected to result in a 4% reduction in Part B payments for radiation oncology and an 8% reduction for radiation therapy centers.
With regard to future adjustments, the proposed rule includes a list of all high-expenditure codes across specialties CMS intends to review.  It is likely, therefore, that CMS will identify and propose more high-impact revisions to work and PE RVUs in the near future.

Source: PYA Healthcare blog

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