CMS Releases CY 2017 Medicare Physician Fee Schedule

2017 Medicare Physician Fee Schedule

Proposed Rule Summary

On July 7, 2016, the Centers for Medicare and Medicaid Services (CMS) released the proposed Medicare Physician Fee Schedule (MPFS) for 2017. The proposed rule updates payment policies and payment rates for services furnished under the MPFS. For the first time, this proposal does not include information on the agency’s quality programs. With the passage of the Medicare Access and CHIP Reauthorization Act (MACRA), CMS’ existing quality programs will sunset at the end of 2016 and reporting under the new Merit-Based Incentive Payment System (MIPS) will begin in 2017; the requirements for MIPS and Alternative Payment Models (APMs) were outlined in separate rulemaking.

The rule in its entirety and the addenda, including Addendum B, which lists the proposed RVUs for each CPT code and all other addenda, can be found here. Comments on the rule must be submitted by September 6, 2016. The final MPFS is typically released around November 1. Most of the provisions of the rule will be effective January 1, 2017 unless stated otherwise.

The following summarizes the major payment and quality provisions of the proposed rule.

Conversion Factor and Specialty Impact

The conversion factor for 2017 is $35.7751. The 2017 CF does not reflect any changes based on the required targeted reductions in misvalued codes since the proposed adjustments to the relative values of misvalued codes is estimated to exceed the 0.5 percent target. The table below, extracted from the rule, shows how the proposed conversion factor was calculated.

Table 43 (see Attachment 1), extracted from the rule, provides a summary of the impact of the proposed changes in the rule by specialty. The changes in the rule are budget-neutral in the aggregate which explains why the impact for all physicians is shown as zero. The 2017 proposed rule is showing changes in the range of plus or minus 1% for most specialties, with hematology/oncology seeing a 2 percent change.

Also attached to this summary is a chart showing the 2017 proposed RVUs and payment rates for all hematology/oncology and evaluation and management (E/M) services.

The proposed rule also includes updates to the geographic practice cost indices (GPCI’s) which accounts for local differences in practice costs. Changes based on the new GPCI’s will be phased in over 2017 and 2018. Addenda D and E found at the link provided at the beginning of this summary provide all of the local GPCIs.

Collecting Data on Resources Used in Furnishing Global Services

In the CY 2015 MFPS, CMS proposed converting all of the 10- and 90-day global surgical codes into 0-day codes. In MACRA, Congress instructed the agency not to proceed with this conversion, and instead collect data to assess the resources used in furnishing pre- and post-operative care. CMS is proposing a 3-pronged approach to collecting data on the volume and costs of the resources typically used in providing surgical services:

1. Comprehensive claims-based reporting about the number and level of pre- and post-operative visits furnished for 10- and 90-day global services. CMS has proposed that G-codes be used for reporting on claims for services that are actually furnished but not separately paid. The proposed G-codes can be found in Table 9 extracted below.
 

1. Survey of a representative sample of practitioners about the activities involved in and the resources used in providing a number of pre- and post-operative visits during a specified recent period of time, such as two weeks. CMS expects to obtain data from approximately 5,000 practitioners and has contracted with RAND to conduct this survey if this proposal is finalized.
2. A more in-depth study, including direct observation of the pre-and post-operative care delivered in a small number of sites, including some ACOs.

CMS received comments that the documentation requirements and the practice expenses for post-operative visits differ from those of other E/M visits and encouraged CMS to develop a separate set of codes to capture the work of post-operative services and to measure, not just estimate, the number and complexity of these services. If the collection of this data results in proposals to revalue surgical services, it will be completed through future notice and comment rulemaking.

Improving Payment Accuracy for Primary Care, Care Management, and Patient-Centered Services

CMS is continuing its ongoing, incremental efforts to update and improve the relative value of primary care, care management/coordination, and cognitive services within the MPFS. In the CY 2016 proposed MPFS, the agency solicited comments on how to improve payment for these services. In response to stakeholder feedback, CMS is offering the following proposals that pay separately for services that had previously been assumed to be bundled into the E/M codes billed by primary care and cognitive physicians.

Non-Face-To-Face Prolonged Evaluation and Management Services

CMS is proposing separate payment for non-face-to-face prolonged E/M services (CPT codes 99358 and 99359), a recognition of the time physicians spend providing this care. The agency is proposing that these services be furnished on the same day by the same physician or other billing practitioner as the companion E/M code. They also note that the services should not be reported during the same period as the complex chronic care management (CCM) service.

The agency is seeking comment on the intersection of the prolonged service codes with CCM and the transitional care management (TCM) services and the proposed code GPPP7 (comprehensive assessment of and care planning for patients requiring CCM services) and how these services can be clearly delineated from one another.

Reducing Administrative Burden and Improving Payment Accuracy for Chronic Care Management Services

Based on an assessment of claims data for CY 2015, CMS has concluded that CCM services may be underutilized. Approximately 275,000 unique Medicare beneficiaries received the service an average of 3 times each, totaling $37 million in allowed charges. CMS is proposing changes to these services in hopes of increasing their utilization. The agency is also proposing to pay for CCM services for more complex patients.

• CMS proposes to more appropriately recognize and pay for the other codes in the CPT family of CCM services (99487 and 99489). All three CPT codes in the family (99487, 99489, and 99490) may only be reported once per calendar month and by a single practitioner. The three services will differ in the amount of clinical staff time provided; the complexity of the medical decision making; and the nature of care planning that was performed.
• CMS is not proposing to change the types of services that qualify as initiating visits, but is proposing to require these visits only for new patients or patients not seen within one year instead of for all beneficiaries receiving CCM services. CMS is proposing to create a new G-code, add-on code GPPP7, that would improve payment for visits that qualify as initiating visits for CCM services. This service would be billable for beneficiaries that require extensive face-to-face assessment and care planning by the billing practitioner.
• CMS proposes to remove the CCM requirements for the care plan to be available remotely to individuals providing CCM services after hours and for providers to be required to adopt EHRs. Beneficiaries will still be required to have access to a physician or clinical staff 24/7 for urgent needs. Also, CMS is proposing to eliminate that beneficiaries have access 24/7 to the care plan as a condition of payment. Instead, CMS will only require the timely electronic sharing of the care plan and allow for transmission by fax.
• CMS is proposing to require the billing practitioner to create and exchange continuity of care documents in a timely fashion with other practitioners; the requirement that this be done electronically is being removed.
• The agency is proposing to simplify the beneficiary consent process for CCM services. Billing practitioners will be required to inform the beneficiary of the provision of the CCM service and document in the medical that the information was explained and note whether the beneficiary accepted or declined CCM services instead of obtaining written agreement.
• CMS is proposing to no longer require the use of a qualifying certified EHR to document communication to and from home- and community-based providers regarding the patient’s psychosocial needs and functional deficits and to document beneficiary consent.

A full list of the CCM scope of service elements and billing requirements can be found in Table 11, which can be found at the end of this summary.

Misvalued Codes

Congress passed several bills, including provisions in the Affordable Care Act, directing CMS to identify “misvalued” services and requiring their re-evaluation. The Protecting Access to Medicare Act (PAMA) established an annual savings target. If the estimated net reduction in expenditures for a year is equal to or greater than the target for that year, the reduced expenditures attributable to such adjustments will be redistributed in a budget-neutral manner within the PFS. However, if the amount by which such reduced expenditures do not meet the target the difference between the target and the RVU reductions will serve as an across the board cut to the MPFS in order to meet the target. CMS estimates that the changes to misvalued services in the proposed rule will achieve a 0.51% net reduction, which is above the 0.5 percent target set in the Achieving a Better Life Experience (ABLE) Act.

In the proposed rule, CMS identifies several categories of codes for review as potentially misvalued: 0-day global services that are typically billed with an E/M service with modifier 25; ESRD Home Dialysis Services; services with direct PE input discrepancies; and codes for the insertion and removal of drug delivery implants.

CMS reiterated the policy that reductions of 20 percent or more for services that are not new or revised will be phased in over 2 years. None of these services will have a reduction greater than 19 percent in a single year.

Valuation of Specific Codes

CMS addressed the changes the agency has made to RUC-recommended work RVUs when the recommendations do not account for significant changes in time. The agency employs different approaches to identify potential values that reconcile the difference in recommended work RVUs with recommended time values, including survey data, building blocks, crosswalks to key reference or similar codes, and magnitude estimation. CMS uses the recommended values as a starting point and then applies one of the listed methodologies to account for reductions in time that are not reflected in the recommended value. The agency does not require a 1:1 linear decrease in newly valued work RVUs, but believes that efficiencies in time must be accounted for in order to maintain relativity in the fee schedule.

CMS Proposed Work Values

Sunshine Act/Open Payments Reporting Policy: Solicitation of Public Comments

The Affordable Care Act (ACA) required manufacturers of covered drugs, devices, biologicals, and medical supplies to submit annually information about certain payments or other transfers of value made to physicians and teaching hospitals during the course of the preceding calendar year. CMS believes certain areas in the rule may benefit from revision and is soliciting comments on the issues below to inform future rulemaking.

• If the nature of the payment categories are inclusive enough to facilitate reporting of all payments or transfers of value to covered recipient physicians and teaching hospitals, CMS would like feedback on further categorization of reported research payments.
• How many years should an applicable manufacturer or GPO continue to monitor and report on past program years for Open Payments reporting purposes?
• How many years is Open Payments data relevant to stakeholders? CMS wants to determine how many years to continue to publish and refresh annually on the website. How many years are useful or relevant as archive files available for download for those accessing the data?
• CMS is seeking feedback on requirement for applicable manufacturers and GPS to register each year regardless of whether the entity will be reporting anything for the program year. The agency is also seeking comment on whether to require manufacturers and GPOs to include the reason for not reporting any payments/transfers of value.
• The agency would like comments on requirement for manufacturers and GPOs to pre-vet payment information with covered recipients and physician owners or investors before reporting to Open Payments. The also would like feedback on pre-vetting based on threshold payment values or random samplings of covered recipients.
• The definition of covered recipient teaching hospitals makes reporting payments or transfers of value difficult. CMS would like comments on the specific hurdles that the current definition presents and would like to receive proposed alternative definitions or definitional elements of a covered recipient teaching hospital.
• Stakeholders have said it is difficult to verify receipt of payment or transfers of value to teaching hospitals. CMS is requesting feedback on the potential addition of new non-public data elements to assist in review and affirmation of payment records. Should this be mandatory to facilitate the review of attributed payments to a teaching hospital?
• Reporting entities expressed interest in uploading data to the open payments system before the end of the calendar year for which the data is collected. They believe that this may increase data validity and minimize disputes. What are the benefits for manufacturers/GPOs to report data early or ongoing throughout the year?
• How should CMS change reporting requirements to ensure that industry can properly and easily represent changes in corporate structure (merger, acquisitions, reorgs) while still monitoring for compliance?
• There is confusion around requirements for reporting ownership and investment interests. CMS is requesting comments on the terms, “value or interest” and “dollar amount invested,” as well as additional terms that may require further clarification.
• How should CMS define physician-owned distributors for data reporting purposes? What data elements should they be required to report? What portion of reported data should be shared on website?
• CMS is requesting an estimate of the time and cost burden associated with reporting.

Medicare Advantage Provider Enrollment

CMS’ proposal would require Medicare Advantage (MA) organization providers and suppliers to be enrolled in Medicare in an approved status. An “approved status” is a status whereby a provider or supplier is enrolled in, and is not revoked, from the Medicare program. The submission of an enrollment application does not deem a provider or supplier to be enrolled in an approved status. Out-of-network or non-contract providers and suppliers are not required to enroll in Medicare to meet this proposal’s requirements.

Pre-enrollment screening helps to ensure that unqualified individuals and entities do not bill Medicare and Medicare Trust Funds are protected. Data collected and verified through the enrollment process includes the following:

• basic identifying information
• state licensure information
• practice locations
• information regarding ownership and management control

CMS believes this change is necessary to help ensure that Medicare enrollees receive items or services from providers and suppliers that are fully compliant with the requirements for Medicare enrollment and that are in an approved enrollment status in Medicare. The process is designed to prevent fraud, waste, and abuse and to protect Medicare enrollees by carefully screening all providers and suppliers. The screening process includes risk-based site visits and in some cases fingerprint-based background checks. Ultimately, this would prohibit payment to individuals or entities that are excluded by the Office of the Inspector General or revoked from the Medicare program. CMS would have the authority to terminate a contract if a MA or Program of All-inclusive Care for the Elderly (PACE) organization fails to meet Medicare’s provider and supplier enrollment requirements. If finalized, these provisions would be effective the first day of the next plan year that begins 2 years from the date of publication of the CY 2017 final rule.

Medicare Shared Savings Program

CMS proposes to make several changes to the program. The agency is proposing updates for ACO quality reporting, including greater alignment with the Physician Quality Reporting System and the proposed Quality Payment Program, modifications to the beneficiary assignment algorithm, and beneficiary protection policies related to the SNF 3-day waiver.

ATTACHMENT 1

TABLE 43: CY 2017 PFS Estimated Impact on Total Allowed Charges by Specialty*

** Column F may not equal the sum of columns C, D, and E due to rounding.

ATTACHMENT 2

TABLE 11: Chronic Care Management (CCM) Scope of Service Elements and Billing Requirements