Proposed Doctor Fee Schedule Would Change Process for Setting New Payments

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By Mindy Yochelson  

July 3 — The Centers for Medicare & Medicaid Services July 3 proposed a 2015 Medicare physician fee schedule rule that would change the agency's procedure for establishing payments for services.

Beginning in 2016, “payment changes will go through notice and comment rulemaking before being adopted,” the CMS said in a fact sheet.

The proposed rule (CMS-1612-P; RIN 0938-AS12) is scheduled to be published in the July 11 Federal Register. Comments will be accepted until Sept. 2. The final rule is to be published by Nov. 1 and takes effect Jan. 1, 2015.

In separate letters this year, members of the Senate and House had asked the CMS to place information on modifications of physician codes in the proposed fee schedule, rather than just in the final rule.

In the most recent letter, a dozen senators told the CMS that placing the payment modifications only in the final rule “limits the ability of providers to review the rationale and various methodologies used in revising the payment codes”.

The CMS said that the new process “will be more transparent and allow for greater public input prior to payment rates being set.”

‘A Good Start.'

Brian Whitman, senior manager, policy and practice for the American Society of Hematology, told Bloomberg BNA July 3 that “the proposal is a good start in a direction that CMS should have gone in long ago.”

He said that “for years, specialties have been subject to the possibility of significant cuts that would only come to light 60 days before implementation and could not be addressed until a year later.”

However, he expressed concern about the schedule that the CMS set out, beginning with the proposed rule for 2016.

Included in future proposed fee schedules would be relative values for new, revised and potentially misvalued codes for which the CMS received recommendations from the American Medical Association's Specialty Society Relative-Value Scale Update Committee (RUC) by Jan. 15 of the preceding year.

Recommendations Deadline

As an example, for the 2016 rulemaking process, the agency said it “would include in the proposed rule proposed values for all services for which we have RUC recommendations by January 15, 2015.”

Relative values are assigned to more than 7,000 services to reflect the amount of expense involved and are multiplied by a conversion factor to establish the payment amount.

Whitman said, however, that the proposed change could be “administratively more complex than necessary and the proposed January 15 deadline seems to not take into account the RUC cycle.”

He suggested that if the CMS were to instead take recommendations by Feb. 15, “specialties could better work to ensure that values are included in the proposed rule.”

GI Comments

A July 7 statement by three gastroenterology societies said they were encouraged that the CMS is aiming for “increased transparency in the Medicare rate-setting process” but expressed concern that colonoscopies are scheduled to be considered under the current system.

“It is vital for physicians to have the ability to comment on proposed changes to reimbursement rates and for patients to weigh in on policies that may directly impact their access to procedures,” according to the American College of Gastroenterology, the American Gastroenterological Association, and the American Society for Gastrointestinal Endoscopy.

“Publishing changes to reimbursement for colonoscopy” in the final 2015 rule in November “allows fewer than 60 days for physicians and patients to prepare for these changes.”

Chronic Care Management

In the 2014 rule, published in November 2013, the CMS established a separate payment for managing the care of Medicare patients with two or more chronic conditions. The payment was to begin in 2015, and the agency said that further details would be forthcoming.

The 2015 proposal established the details for receiving that extra payment for non-face-to-face chronic care management (CCM) services. They are defined as the development and revision of a plan of care, communication with other treating health professionals and medication management.

The proposal establishes a payment rate of $41.92 for the code. It may be billed once a month for each patient.

Also in the 2014 final rule, the CMS had said that, through notice and comment rulemaking, it would establish practice standards to support payment for furnishing the CCM services.

No Separate Standards

However, in a statement on the 2015 proposal, the agency said, it has decided not to “establish separate standards that practitioners and practices furnishing this service would have to meet, as we had indicated last year.”

The agency said that “the scope of service requirements for CCM, most of which were finalized last year, would be sufficient for practitioners to deliver CCM.”

Only a requirement for electronic health records would be included under the new code.

Those furnishing the new CCM services would have to use electronic health record technology that has been certified by a certifying body authorized by the National Coordinator for Health Information Technology.

The requirement would “ensure that practitioners have adequate capabilities to allow members of the interdisciplinary care team to have immediate access to the most updated information informing the care plan,” according to the proposal.

The new payment “is projected to have a positive effect on family practice, internal medicine, and geriatrics,” the CMS said.

The American Academy of Family Physicians (AAFP) July 3 commended the CMS for the new code, saying it recognizes “the value of additional cognitive and administrative work that occurs outside the exam room but that is essential to comprehensive, coordinated care.”

Concerns About SGR

However, the AAFP said that failure by Congress to repeal the sustainable growth rate (SGR) formula “overshadows the 2015 proposed fee schedule's new and commendable code for chronic care management services.”

Although Medicare physician pay rates are due to be cut by at least 20 percent under the SGR, the proposed rule doesn't include proposals or announcements on the update. The final figures, the agency said, are to be announced in the final rule in November.

In March, the CMS said it estimated that the fee schedule update for 2015 would be a cut of 20.9 percent.

In 2014, as in previous years, Congress canceled the payment reductions. On April 1, President Barack Obama signed into law a measure to extend Medicare physician pay rates through the end of March 2015.

Payment Chart

While CMS estimated that most specialties would see a pay change ranging from a cut of 2 percent to an increase of 1 percent, radiation therapy centers and radiation oncology would receive cuts of 8 percent and 4 percent respectively.

These reductions primarily stem from a proposal to consider an equipment item—a radiation treatment vault— as an indirect rather than a direct practice expense, the proposed rule said.

The item “appears to be more similar to building infrastructure costs than to medical equipment costs,” according to the proposal.

The vault is the treatment room that houses the linear accelerator that delivers the radiation treatments, and it is designed to protect staff and others within the radiation office and adjacent offices from secondary radiation exposure, according to the American Society for Radiation Oncology (ASTRO).

ASTRO said that because of the proposed reimbursement change, “those practicing in freestanding centers will experience greater cuts than those practicing in hospitals, yet the specific impact will vary depending on an individual practice's particular mix of services.”

Similarly, Ted Okon, executive director of the Community Oncology Alliance, told Bloomberg BNA that the reductions have the potential to drive patients from the “more cost-effective community oncology setting” to hospitals.

“The payment cuts will further drive community clinics into hospitals, and the higher hospital costs will be borne by cancer patients, Medicare, and all taxpayers,” he said.

Value-Based Modifier

The proposal also continues the phase-in of the physician value-based payment modifier, which provides different payments to physicians based on comparison of the quality of care furnished to beneficiaries and the cost of care.

The Affordable Care Act required the CMS to begin applying the modifier on Jan. 1, 2015, for items and services furnished by specific physicians.

Performance in 2014 determines how the modifier affect payments to practices in 2016, and performance in 2015 affects 2017 payments.

The American Medical Association's House of Delegates in June supported a resolution requiring the AMA to seek limitations on the rollout of the modifier.

The resolution specifically called for a delay in the modifier's penalty for smaller medical practices and encouraged the selection of modifier quality measures that are clinically meaningful and within the control of physicians

Surgical Payments

Another proposed changed deals with how surgeons bill for Medicare reimbursements.

Surgeons are paid a single global fee that, depending on the procedure, includes the value of the surgical procedure and post-surgery visits for up to 10 or 90 days.

The payment includes post-operative visits by the surgeon in the hospital, as well as follow-up visits at the medical office. A provider may not bill separately for services related to the procedure 10 or 90 days after the service.

CMS is proposing to eliminate, beginning in 2017, the global payment policy.

According to the CMS, the Department of Health and Human Services' Office of the Inspector General has identified a number of surgical procedures that include more visits in the “global period” than are being furnished.

“In order to address the potential for misvaluation of surgical services,” the agency said it is proposing to pay separately for visits and services furnished after the day of the procedure.

Surgeons would bill separately for the surgical procedure and each subsequent visit.

‘Significant Concerns.'

Katie O. Orrico, director of the Washington Office of the American Association of Neurological Surgeons/ Congress of Neurological Surgeons, said her group has “significant concerns that this approach will result in inappropriate cuts for surgical services.”

Her group and other surgical societies are analyzing the policy impact, she said.

“If CMS decides to move forward, it is essential that we do not lose value in the malpractice component, in particular, as risk is associated with the surgical procedure itself, rather than with the follow-up visits,” she said.

Two Calls

The CMS will host an Open Door Forum on the proposed rule on July 10. More information is at

A national provider call on the proposed rule will be held on July 24. More information is available at

To contact the reporter on this story: Mindy Yochelson in Washington at

To contact the editor responsible for this story: Ward Pimley at

The proposed rule is at