Medicare Releases Proposed Payment Rates and Associated Policies for Physicians in 2016

On July 8, 2015, the Centers for Medicare and Medicaid Services (CMS) released its proposed rule governing payments for physician services and other associated policies covering the calendar year of 2016. This is the first physician fee schedule proposed rule following the passage of the Medicare Access and CHIP Reauthorization Act (MACRA), which eliminated the sustainable growth rate formula that had long mandated cuts each year. Under the new update schedule created by MACRA, payments to physicians will increase by 0.5% overall in 2016 and increase by this amount each year until 2019. The proposed physician fee schedule can include significant changes in payments for individual services, but this year does not propose payment changes for commonly performed services in hematology. However, there are a number of proposed policies of note including:

• CMS has proposed to begin paying for advance care planning services in 2016. These services would include discussion of advanced directives. The debate around the Affordable Care Act (ACA) leading up to passage in 2009 included a particularly heated discussion about “death panels” so Medicare had not included this service in the past. The proposed national payment amount would be approximately $86 for the first thirty minutes of the service and $74 for each additional thirty minutes. All Medicare physician payments are adjusted for geography so could be lower or higher than the proposed amounts.

• CMS proposes to begin the review process for three families of codes performed by hematologists: therapeutic apheresis (CPT 36516), therapeutic injection (CPT 96372-96375), and some chemotherapy codes that do not include infusion (CPT 96401-96402, 96409-96411). This review will examine whether payment levels are correct for these services and as a result, could change the payment level in 2017.

• A request for information on how CMS might begin to pay for additional services performed by physicians outside of procedural specialties was also proposed. CMS specifically requests thoughts on “interprofessional collaboration,” such as when a primary care physician might reach out to a specialist with a particular case. CMS is also planning to look into developing codes for services that go beyond a typical office or hospital visit and could be reported on the same day.

Medicare also includes changes to the pay-for-reporting and pay-for-performance elements within this proposed rule. MACRA mandated a consolidation of the existing Physician Quality Reporting System (PQRS), value-based modifier, and Electronic Health Record incentive programs, but that transition will not occur in 2016.

For 2016, the rules for quality reporting stay the same as in 2015. This means that most physicians must report on nine measures covering three different domains of quality. Failure to report will result in a two percent cut in payment in 2018. For the value-based modifier, all physician groups will now be eligible for both bonuses and penalties based on performance in 2016. Larger groups may have penalties as high as four percent but smaller groups are more protected. Starting in 2017, CMS will begin the conversion to a new system that will likely require similar levels of reporting but will have different bonus and penalty levels.

Medicare also requests input on a number of policies that will be implemented in coming years related to the development of new payment models and required decision support for advanced imaging. ASH will work closely with leaders and members to analyze and comment on this rule and contribute to Medicare physician payment in the new post-SGR world. Medicare’s final decisions on these proposals will be released around November 1, 2015 for implementation on January 1, 2016.