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From Health Law Daily, November 2, 2015

Physician Fee Schedule rule updates payment and quality reporting for 2016

By Bryant Storm, J.D.

CMS issued an advance release of the Final rule to update the Physician Fee Schedule (PFS) and other Medicare Part B payment policies. The Final rule updates payments for services furnished by physicians, nurse practitioners, physician assistants, physical therapists, radiation therapy centers, and independent diagnostic testing facilities after January 1, 2016. The Final rule also finalizes changes to the Physician Quality Reporting System (PQRS) and the Physician Value-Based Payment Modifier (Value Modifier). The Final rule is the first update to the PFS since the repeal of the Sustainable Growth Rate (SGR) formula by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114-10). The Final rule is scheduled to be published in the Federal Register on November 16, 2015.

Payment provisions. The Final rule makes the following payment updates to the PFS:

  • Part B drugs (biosimilar biological products). CMS is finalizing its proposal to clarify that the payment amount for a biosimilar biological drug product is based on the average sales price of all biosimilar biological products included within the same billing and payment code.

  • Misvalued Code Target. Section 3134 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) directed CMS to identify “misvalued codes” in the PFS. CMS is finalizing a methodology to adjust those improper valuations. The methodology identified changes that achieve 0.23 percent in net reductions. To account for the misvalued codes, the new policy will require a 0.77 percent reduction to all PFS services.

  • Radiation Therapy. CMS updated the utilization rate for radiation therapy treatment with a new assumption that capital equipment used for radiation therapy is generally used for 35 hours per week (a 70 percent utilization rate) instead of 25 hours per week (a 50 percent utilization rate). CMS did not finalize proposals to implement a new code set for payment of radiation therapy treatment under the PFS.

  • RVU reductions. The Protecting Access to Medicare Act of 2014 (PAMA) (P.L. 113-93) required if the total relative value units (RVUs) for a service would otherwise be decreased by an estimated amount equal to or greater than 20 percent as compared to the total RVUs for the previous year, the adjustments must be phased-in over a two-year period. The Final rule finalizes CMS’ proposal to reduce a service by the maximum allowed amount (e.g., 19 percent) in the first year, and phase in the remainder of the reduction in the second year.

  • Misvalued code changes in lower GI endoscopy services. In response to recommendations regarding how CMS could better valuate lower GI endoscopy services, the Final rule finalizes payment rates that are more closely tied to the Relative Value Update Committee (RUC) recommended values.

  • “Incident to.” The Final rule finalizes a policy that “incident to” Medicare Part B services must be billed by the supervising physician or practitioner. Additionally, the Final rule finalizes a CMS proposal which mandates that auxiliary personnel providing “incident to” services cannot be excluded from Medicare, Medicaid, or other Federal health care programs at the time that they provide such services or supplies.

  • Self-referral. The final rule clarifies the scope of the physician Self-referral or Stark Law (42 U.S.C. 1395nn) and establishes two new exceptions. The exceptions include (1) permitting payment by hospitals, Federally Qualified Health Centers (FQHCs), and Rural Health Clinics (RHCs) to physicians for the purpose of compensating nonphysician practitioners under certain conditions and (2) permitting timeshare arrangements for the use of office space, equipment, personnel, items, supplies, and other services.

Quality changes. The Final rule makes several quality changes to (1) the Physician Quality Reporting System; (2) the Physician Compare website; (3) the Physician Value-Based Payment Modifier (Value Modifier); and (4) the Medicare Shared Savings Program (MSSP).

  • PQRS. Under the PQRS, for 2018, eligible professionals (EPs) and group practices that fail to satisfactorily report data on nine measures covering three National Quality Strategy domains will receive a negative payment adjustment. Failure to report adequate quality data on covered professional services will cause that EP or group practice to be paid 2.0 percent less than the PFS amount for that service.

  • Physician Compare. The Final rule continues the phased in approach to public reporting of data on the Physician Compare website. CMS will make all 2016 individual EP and group practice PQRS measures available for public reporting. The Final rule finalizes other proposals related to Physician Compare, including using the Achievable Benchmark of Care (ABC™) methodology for public reporting. The ABC methodology is designed to make data easily comparable and interpreted by consumers. The ABC benchmark will be displayed using a five-star rating system.

  • Physician Value-Based Payment Modifier. The Final rule includes polices to transition away from the Value Modifier, which provides payment increases for physicians and other EPs who provide high quality, efficient care and results in decreased payment for low-performing providers. The policies are being adjusted to prepare for the Merit-Based Incentive Payment System (MIPS) which, under MACRA, will replace the Value Modifier.

  • Medicare Shared Savings Program. The 2016 PFS Final rule adds a preventive health measure related to cardiovascular disease, preserves flexibility to maintain or revert measures that become harmful, and clarifies accountable care organization (ACO) compliance with reporting measures under the PQRS.

MainStory: TopStory ReimbursementNews AgencyNews HealthCareReformNews ComplianceNews ACONews CMSNews BillingNews CoPNews DrugBiologicNews HealthReformNews PartBNews ProgramIntegrityNews QualityNews StarkNews

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