Changes for the 2015 Medicare Physician Fee Schedule (PFS)

Changes for the 2015 Medicare Physician Fee Schedule (PFS)

On July 3, 2014, the Centers for Medicare and Medicaid Services (CMS) released changes for the upcoming 2015 Medicare Physician Fee Schedule (PFS). This report addresses changes to the PFS and other Medicare Part B payment policies.

Relative Value Units

The values for each medical procedure are set by CMS through the use of Relative Value Units (RVUs), which are multiplied by a conversion factor to account for geographical variants to decide what CMS is to pay for the medical procedure. During the past few decades, CMS provided a preliminary assessment of the SGR-related cut that is now required in the subsequent calendar year. A RVU has three components: physician work, physician expense, and malpractice expense. CMS uses a formula to combine these components into one unit. The figure is multiplied by the conversion factor to decide how much money Medicare is to pay out.

Complex Chronic Care Management

There is a new payment code for primary care providers for services that are not face-to-face, and for patients with two or more chronic conditions. This code is billable once a month, and CMS will pay $41.92 when it is billed. Chronic care management services include development and revision of a plan of care, medication management, and communication with other healthcare professionals.

Revalued Codes and Misvalued Services

CMS has the intent to not finalize any revalued codes until a public comment period is held, which is planned to occur by 2016. Also, CMS is required to identify codes that have been misvalued in the PFS, which involves around 80 codes. They want a review of the services that have Medicare-allowed charges of $10 million or more as a subset of codes under a priority category “codes that account for the majority of spending under the PFS.” This list includes stress echocardiography, transthoracic echocardiography, and cardiac monitoring device services.

Global Provisions

CMS proposes, under the misvalued code initiative, to transform all 10- and 90-day global codes to 0-day global codes, which is planned to occur sometime in 2017. This is in response to the Office of the Inspector General (OIG) report regarding provision of follow-up evaluation and management services. The change is due to diversity of services, procedure settings, and payment models, as well as a lack of regular updates to pay rates for services.

Radiation Therapy

The PFS reclassifies medical equipment costs for radiation therapy as an indirect expense rather than a direct expense. This change results in an 8 percent reduction in allowable charges for a radiation therapy center and a 4 percent reduction in radiation oncology.

Value Modifier

On January 1, 2015, CMS will implement the Value Modifier, which is a value-based payment modifier. This will be phased in to all the eligible professionals by the year 2017. CMS will also increase the maximum positive payment adjustment, taking it from 2 to 4 percent. Decreases to the maximum negative payment adjustment are to go from -2 to -4 percent.

Sunshine Act

CMS has proposed to delete the exception in the Open Payments Program (under the Sunshine Act) for reporting any indirect payments by industry to physicians serving as faculty for certified continuing medical education. This will create more consistent reporting, and will allow consumers to have access to reported information.

Qualified Clinical Data Registry

There is a proposal for an eligible professional wishing to meet certain criterion for participation in the QCDR for 2017 PQRS payment adjustment report on three outcome measures. These measures include resource use, patient experience of care, and efficiency and appropriateness of use. There are a minimum number of measures the QCDR can report for the PQRS, just as there is a limit on the number of measures that the QDCR can submit on behalf of a qualified professional.

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