On November 27, the Centers for Medicare and Medicaid Services (CMS) released the 1,369-page 2014 Medicare Physician Fee Schedule final rule, which was published in the December 10 Federal Register. Most provisions take effect January 1, 2014, although a few issues are open for public comment by January 27, 2014. The American Medical Association (AMA) has published a summary of the final rule. Below are a few key points:

• Although the final rule contains the 23.7 percent physician payment cut called for under the sustainable growth rate (SGR) formula, Congress has also as part of the federal budget negotiations agreed to a three-month SGR patch that will stop the cut that would otherwise take effect January 1, 2014—and replace it with a 0.5 percent payment raise—which will give lawmakers a little more time to finalize the long-term Medicare payment reforms.

• After strong opposition from organized medicine, CMS will not be capping non-facility practice expenses for over 200 physician services at the lower rates for ambulatory surgical centers or hospital outpatient departments. The caps were below crucial supply costs for some procedures.

• CMS plans to pay for monthly chronic care management services beginning in 2015, at about $82 per month per beneficiary (using the 2013 conversion factor). 

• For Physician Compare, CMS will begin reporting in 2015 measures collected for groups that participate in the 2014 Group Practice Reporting Option (GPRO) of the Physician Quality Reporting System (PQRS). CMS plans to correct errors identified during the preview period, prior to publication.

• 2014 is the last year physicians can qualify for an incentive payment of 0.5 percent under PQRS; starting in 2015, there will only be penalties for failure to achieve satisfactory reporting. Physicians will only have to report on 50 (versus 80) percent of applicable patients. Individual reporters must report on at least nine measures to receive incentives, and must report on more than one measure or measures group—and cannot use the administrative claims option—to avoid the PQRS penalty. Measures groups will only be reportable via registry. The GPRO will still be available to practices of 25-99 eligible professionals.

• Over strenuous objections from organized medicine, CMS will expand the Value-Based Payment Modifier, to groups of 10 or more physicians and other health professionals in 2016. Based on how their 2014 costs and quality compared to national averages, physicians in these groups could see a yet-to-be-determined increase or cuts of up to 2 percent in their 2016 payments. CMS is required by law to apply the Value-Based Modifier to all physicians by 2017.