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CMS releases proposed 2016 Medicare physician fee schedule



July 27, 2015
Area(s) of Interest: Payor Issues and Reimbursement Practice Management Public Payors 

The Centers for Medicare and Medicaid Services (CMS) recently released the 2016 proposed Medicare physician payment rule. The rule reflects the 0.5 percent increase in payment as of July 1, 2015, and the additional 0.5 percent increase in payment on January 1, 2016, recently adopted by Congress. Overall, Medicare will pay physicians nearly $700 million more in 2016 than they will have paid in 2015.

Most notable in the payment rule is CMS’ proposal to pay for advance care planning and end-of-life counseling. The fee schedule would establish two new codes to cover early conversations between patients and their physician about care options. These codes were recommended by the American Medical Association (AMA) Relative Value Scale Update Committee (RUC). The codes include discussion before an illness progresses and during the course of treatment so patients can make decisions about appropriate treatment for their personal situation. One code would cover the first 30 minutes and the other would cover additional 30-minute blocks of time. AMA and the California Medical Association (CMA) have been pushing CMS to cover such services.

CMS is seeking comments on the 2019 implementation of the new Medicare payment systems recently adopted by Congress as part of the permanent repeal of the sustainable growth rate (SGR) formula. The agency also noted its strong support for promoting primary care services and is soliciting comments on potential coverage of collaborative care services and an expansion of the Comprehensive Primary Care initiative. The proposal also includes an expansion of payment for telehealth services mainly for in-home treatments for end-stage renal disease.

There are numerous changes to the relative values of services – many recommended by the AMA RUC. Most notably, payment for gastroenterology services will be reduced 5 percent, with colon and rectal surgery reduced by 1 percent. Organized medicine is fighting many of these changes.

Other notable provisions of the rule include:

  • Myriad changes to the Accountable Care Organization Shared-Savings program, the Physician Quality Reporting System (PQRS) and the value-based payment modifier, which will soon apply to all physicians who bill under a tax identification number.
  • New appropriate use criteria for advanced diagnostic imaging mainly based on recommendations from the related specialty societies.
  • Some new exceptions to physician self-referral laws.

The overall payment impact by specialty can be found on page 711 of the rule. Please note that these payments do not account for adjustments made by PQRS, the value-based payment modifier or meaningful use.

CMS is also updating the Geographic Adjustment Factors for all localities nationwide. California will see increases of 0.1 to 0.3 percent. Please note that starting in 2017, California localities will move to Metropolitan Statistical Areas due to the CMA-sponsored geographic practice cost index legislation, with there will be larger payment increases to the urban counties currently within the "Rest of California" locality.

AMA and CMA are carefully analyzing the multitude of changes to the physician payment system and will be submitting extensive comments.

Contact: Elizabeth McNeil, (800) 786-4262 or emcneil@cmadocs.org.

  • CMS will no longer require physicians who opt out of the Medicare program to notify Medicare on an annual basis.

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