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From Health Law Daily, November 3, 2016

PFS improves payment accuracy, requires MA network provider enrollment

By Kathryn S. Beard, J.D.

Payments for comprehensive primary care services are changing for the better for providers who use coordinated and patient-centered care. CMS released a Final rule revising payment policies for the Physician Fee Schedule (PFS) and Medicare Part B with changes designed to improve the quality of care provided and health outcomes while using the Medicare Trust Funds properly and more efficiently. The rule, which will publish in the Federal Register on November 15, 2016, includes changes to the Medicare Shared Savings Program (MSSP), new requirements for Medicare Advantage (MA) provider networks, expands the Medicare Diabetes Prevention Program (MDPP), and adds data transparency requirements for MA and Part D. The regulations are effective on January 1, 2017.

Most provisions in the Final rule are adopted from the Proposed rule (81 FR 46161, July 15, 2016; see Physician fee schedule plans ‘significant actions’ emphasizing primary care, July 8, 2016) without alteration.

PFS conversion factor. The PFS pays for Medicare services furnished by physicians and other practitioners in all sites of service based on the relative resources typically used to furnish the service. Each service is assigned a relative value unit (RVU) and paid after applying a yearly conversion rate. For calendar year (CY) 2017, CMS estimates the PFS conversion factor to be 35.8887, slightly higher than the Proposed rule’s estimate of 35.7751.The CY 2017 anesthesia conversion factor is estimated to be 22.0454. Both calculations include required adjustments for budget neutrality and a 0.5 percent update required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114-10).

Section 3134(a) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) requires the identification of potentially misvalued services, and adjustments to their RVUs. Congress set a target adjustment of 0.5 percent for 2017; CMS finalized code changes achieving 0.32 percent in net expenditure reductions. The agency therefore had to apply an additional adjustment to the update, which accounts for the increase in conversion factors from the Proposed rule.

MA provider enrollment. The Final rule creates parity between provider and supplier enrollment requirements for all Medicare programs by requiring health care providers who contract with an MA organization to provide services to beneficiaries enrolled in MA health plans to be screened and enrolled in Medicare. The change will help ensure that Medicare enrollees receive appropriate or medically-necessary items or services from health care providers and suppliers that fully comply with Medicare enrollment requirements.

These requirements apply to:

  • MA network providers and suppliers;
  • first-tier, downstream, and related entities;
  • health care providers and suppliers in Program of All-inclusive Care for the Elderly (PACE) plans;
  • suppliers in Cost Health Maintenance Organizations and/or competitive medical plans;
  • health care providers and suppliers participating in demonstration and pilot programs;
  • locum tenens suppliers that provide physician staffing services for hospitals, outpatient medical centers, government and military facilities, group practices, community health centers, and correctional facilities; and
  • incident-to-suppliers that furnish integral, but incidental, professional services in the course of diagnosis or treatment of an injury or illness.

Enrollment is required beginning in 2018—two years after publication of the Final rule—and beginning on the first day of the plan year thereafter, MA plans that do not meet the requirements may be subject to contract actions ranging from intermediate sanctions to contract termination.

MDPP. The MDPP is the first model tested successfully through the ACA’s CMS Innovation Center to be implemented. The independent CMS Chief Actuary certified that expanding the program would reduce or not result in any increase in net program spending. HHS determined that the expansion will improve quality of patient care without increasing spending, or reduce spending without reducing quality of patient care, and that it will not deny or limit the coverage or benefits that Medicare beneficiaries receive. CMS released data and a fact sheet about the MPDD, which will be expanded during CY 2018.

Data collection. MACRA Sec. 523 required CMS to gather data on post-surgical visits; the Final rule significantly reduces the burden on practitioners from that of the Proposed rule. The final regulations now:

  • require reporting of post-operative visits only for high-volume/high-cost procedures;
  • use an existing CPT code instead of the proposed G-codes;
  • require reporting only from a sample of practitioners consisting of those in larger practices (10 or more practitioners) in specified states; and
  • allow voluntary reporting from all others.

The reporting requirement is effective for services related to global procedures furnished on or after July 1, 2017, though voluntary reporting is available for the full year.

Other. The Final rule will make public MA bid pricing data, and MA and Part D medical-loss ratio (MLR) data. CMS revised the methodology used to calculate Geographic Practice Cost Indices (GPCIs) in the U.S. territories, leading to an overall increase in PFS payments in Puerto Rico. The agency also finalized MSSP policies including quality reporting requirements for accountable care organizations (ACOs). The Final rule makes numerous changes and additions to the Current Procedural Terminology (CPT) codes, including new codes for moderate sedation; telehealth services for end-stage renal disease (ESRD)-related dialysis services, advance care planning services; and mammography services.

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