Physician Fee Schedule

CMS Releases Final Rule for the 2015 Physician Fee Schedule

On October 31, 2014, the Centers for Medicare & Medicaid Services (CMS) issued the final rule updating policies and payment rates for physician and other health care provider services paid under the Medicare Physician Fee Schedule (PFS) for calendar year (CY) 2015. The final rule also makes several changes to the Physician Quality Reporting System (PQRS), Medicare Shared Savings Program, and Medicare Electronic Health Record (EHR) Incentive Program, as well as changes to the Physician Compare website. Finally, the rule continues the phased-in implementation of the physician value-based payment modifier created by the Affordable Care Act, which would affect payments to physicians and physician groups, as well as other eligible professionals, based on the quality and cost of care they furnish to beneficiaries enrolled in the traditional Medicare fee-for-service program. AMDA submitted comments on the proposed rule that was issued in July. In its comments, AMDA expressed concerns about the aggressive implementation, increasing complexity, and increased penalties for value-based purchasing programs that can cost physicians and other practitioners up to 10 percent of their total Medicare billing. Specifically, AMDA asked CMS to re-evaluate the current implementation of the value-based payment modifier (VM) as it would negatively impact those who practice in post-acute and long-term care (PALTC) medicine, and do little to actually measure the quality of physicians practicing in these settings. Other physician groups, including the American Medical Association (AMA) have expressed similar concerns. CMS considered AMDA’s concerns in the final rule but stopped short of implementing any specific changes. AMDA has created a taskforce to analyze the full impact of these programs and is in dialogue with CMS to address AMDA’s concerns.

Summary Highlights from the PFS Final Rule

Sustainable Growth Rate (SGR) & Conversion Factor

The Protecting Access to Medicare Act of 2014 provides for a zero percent PFS update for services furnished between January 1, 2015 and March 31, 2015. Current law requires physician fee schedule rates to be reduced by an average of 21.2 percent from the CY 2014 rates starting April 1, 2015. In most prior years, Congress has taken action to avert a large reduction in PFS rates before they went into effect. The Administration supports legislation to permanently change the sustainable growth rate (SGR0 to provide more stability for Medicare beneficiaries and providers, while promoting efficient, high quality care. The estimated conversion factor for January 1 to March 31, 2015 is $35.8013 and $28.2239 from March 31 to December 31 reflecting the 21.2 percent cut. Below tables illustrate the impact of these changes on reimbursement rate for the nursing home family of codes.

January 1 - March 31, 2015
Code Total 2015 RVUs 2015 Payment Rate (CF=35.8013) Total 2014 RVUs 2014 Payment Rate (CF=35.8228) Percentage Change 2014-2015
99304 2.57 $92.01 2.61 $93.50 -1.59%
99305 3.67 $131.39 3.72 $133.26 -1.40%
99306 4.69 $167.91 4.71 $168.73 -0.48%
99307 1.24 $44.39 1.25 $44.78 -0.86%
99308 1.94 $69.45 1.93 $69.14 0.46%
99309 2.56 $91.65 2.54 $90.99 1%
99310 3.8 $136.04 3.78 $135.41 0.47%
99315 2.05 $73.39 2.05 $73.44 -0.06%
99316 2.96 $105.97 2.94 $105.32 0.62%
99318 2.7 $96.66 2.69 $96.36 0.31%
%= (new-old)/old
April 1 - December 31, 2015
Code Total 2015 RVUs 2015 Payment Rate (CF=35.8013) Total 2014 RVUs 2014 Payment Rate (CF=35.8228) Percentage Change 2014-2015
99304 2.57 $72.54 2.61 $93.50 -22.42%
99305 3.67 $103.58 3.72 $133.26 -22.27%
99306 4.69 $132.37 4.71 $168.73 -21.55%
99307 1.24 $35.00 1.25 $44.78 -21.84%
99308 1.94 $54.75 1.93 $69.14 -20.80%
99309 2.56 $72.25 2.54 $90.99 -21%
99310 3.8 $107.25 3.78 $135.41 -20.80%
99315 2.05 $57.86 2.05 $73.44 -21.21%
99316 2.96 $83.54 2.94 $105.32 -20.68%
99318 2.7 $76.20 2.69 $96.36 -20.92%
%= (new-old)/old

Primary Care and Chronic Care Management

Medicare continues to emphasize primary care by making payment for chronic care management (CCM) services – non-face-to-face services to Medicare beneficiaries who have multiple, significant, chronic conditions (two or more) – beginning in 2015. Chronic care management services include regular development and revision of a plan of care, communication with other treating health professionals, and medication management.

CMS finalizes a payment rate of $42.60 for 99490 CCM code that can be billed up to once per month per qualified patient. (Note: there appears to be an error in the CMS rule establishing $40.39 as the payment rate). CMS initially proposed to use a G code rather than the already established CPT codes but due to public comments, by AMDA and other specialties, decided to use the CPT code.

CMS is finalizing its proposal to allow greater flexibility in the supervision of clinical staff providing CCM services. CMS indicated that the proposed application of the “incident to” supervision rules were widely supported by the commenters during the proposed rulemaking comment period.

According to the rule, payment for CCM is only one part of a multi-faceted CMS initiative to improve Medicare beneficiaries’ access to primary care. Models being tested through the Innovation Center will continue to explore other primary care innovations.

Finally, CMS proposed standards for EHRs – specifically, a 2014-certified EHR. In response to public comments indicating that very few practices have adopted a 2014-certified EHR at this time, CMS will require the version of the certified EHR that is in use on December 31 of the prior calendar year for the EHR Incentive Programs to bill for CCM services.

Physician Value-Based Payment Modifier (VM)

The Affordable Care Act established a VM that provides for differential payment to a physician or group of physicians under the Medicare Physician Fee Schedule based upon the quality of care furnished to Medicare Fee for Service beneficiaries as well as the cost of that care during a performance period. Further, the statute requires that CMS begin applying the Value Modifier on January 1, 2015, with respect to items and services furnished by specific physicians and groups of physicians and to apply it to all physicians and groups of physicians beginning not later than January 1, 2017. The statute requires that the VM must be implemented in a budget neutral manner, generally meaning that upward payment adjustments for high performance must balance the downward payment adjustments applied for poor performance.

In this rule CMS finalizes an increase in payment adjustments up to 4 percent depending on physicians’ performance on quality and cost measures. Further, CMS will increase the maximum penalty amount from -2.0 percent to -4.0 percent only for groups with ten or more EPs. That is, for CY 2017 payments, a -4.0 percent VM adjustment will apply to groups of ten or more EPs subject to the Value Modifier that do not meet the quality reporting requirements for the Physician Quality Reporting System (PQRS). In CY 2017, CMS will apply a maximum downward adjustment of -2.0 percent for groups with two to nine EPs and solo practitioners, if the group or solo practitioner does not meet the quality reporting requirements for the PQRS. The below table summarizes the proposed payment adjustments.

Proposed CY 2017 VM Amounts
(for groups of 10 or more)

Cost/Quality Low Quality Average Quality High Quality
Low Cost +0.0% +2.0x* +4.0x*
Average Cost -2.0% +0.0% +2.0x*
High Cost -4.0% -2.0% +0.0%

*eligible for an additional +1.0x if reporting clinical data for quality measures and average beneficiary risk score in the top 25 percent of all beneficiary risk scores

Despite AMDA’s comments, CMS does not implement any site of service adjustments for EPs practicing in PALTC settings. Therefore, CMS will continue with the current plan to adjust quality and cost measures by applying risk and specialty adjustment. Preliminary AMDA analysis of the Quality Resource and Use Reports (QRUR) shows that physicians practicing in PALTC will score significantly higher on cost given that their patient population is compared to the general internal/family medicine specialty patient population. This will result in likely negative adjustments. AMDA plans to present the data to CMS and work on solutions that better align with the goals of these programs.

Open Payments (Physician Payment Sunshine Act)

In response to questions and experience administering the program, CMS is finalizing four changes in this rule:

  1. CMS is deleting the definition of “covered device” as it is duplicative of the definition of “covered drug, device, biological or medical supply” which is already defined in regulation.
  2. CMS is deleting the Continuing Education Exclusion in its entirety. Eliminating the exemption for payments to speakers at certain accredited or certifying continuing medical education events will create a more consistent reporting requirement, and will also be more consistent for consumers who will ultimately have access to the reported data.
  3. CMS will require the reporting of the marketed name and therapeutic area or product category of the related covered drugs, devices, biologicals, or medical supplies, unless the payment or other transfer of value is not related to a particular covered or non-covered drug, device, biological or medical supply.
  4. CMS will require applicable manufacturers to report stocks, stock options or any other ownership interest as distinct categories. This will enable us to collect more specific data regarding the forms of payment made by applicable manufacturers. Based on public comments and manufacturers’ need to update their systems according to the new requirements these changes will be implemented for data collection 2016.

For more information about Open Payments, visit:

Enhanced Transparency in Rate Setting

CMS will adopt a new process for valuing new, revised, and potentially misvalued codes for CY 2016, so that payment for the vast majority of codes undergo notice and comment rulemaking prior to being adopted. CMS initially proposed to adopt the new process for 2016. Instead, CMS is finalizing the proposal with a transition in CY 2016 and full implementation in CY 2017. CMS made several adjustments in the policy to minimize the need for Medicare-specific G-codes. The supported a new process that would allow CMS to publish the proposed RVUs for CPT codes in the MPFS proposed rule instead of the MPFS Final Rule for 2017.

Summary of PQRS Measures

For 2015, CMS will add 20 new individual measures and two measures groups to fill existing measure gaps. CMS will remove 50 measures from reporting for the PQRS, bringing the individual measure set to 255 total measures. Generally, eligible professionals (EPs) need only report nine measures covering three National Quality Strategy (NQS) domains. AMDA is analyzing the impact of these changes and will publish more information for AMDA members in the coming weeks. AMDA has provided recommended measures for reporting for the 2014 PQRS available here.

Physician Compare Website

The 2015 PFS final rule continues to build on CMS’ phased approach for public reporting on Physician Compare. CMS is finalizing the proposal to expand public reporting of group-level measures by making all 2015 PQRS GPRO web interface, registry, and EHR measures for group practices of two or more EPs and all measures reported by Accountable Care Organizations available for public reporting on Physician Compare in 2016. CMS is finalizing that these data must meet the minimum sample size of 20 patients and prove to be statistically valid, reliable, comparable, and accurate.

CMS is not finalizing the proposal to publicly report 20 PQRS individual measures reported in 2013 and collected through a registry, EHR, or claims in 2015. However, they are finalizing the proposal to expand public reporting of measures for individual EPs by making all 2015 PQRS individual measures collected via registry, EHR, or claims, available for public reporting on Physician Compare in late 2016, if technically feasible, with the exception of those measures that are new to PQRS and thus in their first year. In general, no first-year measures will be publicly reported on Physician Compare.

Most provisions of the final rule are effective January 1, 2015. CMS will accept comments on the final rule until December 30, 2014. AMDA staff is continuing to analyze the final rule and will provide further analysis on the rule affects post-acute and long-term care providers.

AMDA Submits Comments on CY2015 Proposed Physician Fee Schedule

Last week, AMDA-The Society for Post-Acute and Long-Term Care Medicine submitted comments to the Centers for Medicare & Medicaid Services (CMS) on the Physician Fee Schedule, Clinical Laboratory Fee Schedule, Access to Identifiable Data for the Center for Medicare and Medicaid Innovation Models & Other Revisions to Part B for Calendar Year (CY) 2015; Proposed Rule.

AMDA’s comments focused on the following proposals within the rule (bolded for emphasis):

  1. Chronic Care Management Services (CCM)
  2. Value-Based Payment Modifier (VBM)
  3. Physician Compare Website
  4. Physician Payment, Efficiency, and Quality Improvement (PQRS)
  5. EHR Incentive Program (Meaningful Use)
  6. Chronic Care Management

    AMDA applauded CMS’ ongoing effort and for the first time recognition of the need to provide reimbursement for chronic care management – a long underappreciated and undervalued service. However, AMDA also stated that CMS’ proposal misses the mark on addressing the needs of the most complex patients that many AMDA members take care of. For the last three years, AMDA worked with a group of stakeholders on a CPT code that would serve the needs of this complex population. Rather than finalizing the RUC recommended non-face-to-face CPT code, however, CMS proposes a G code with lower reimbursement and what AMDA believes to be too burdensome requirements. AMDA stated that the “complexity and the cost for practices to fulfill all the requirements of the code will provide too great a burden for most practices to undertake these services. ”One such requirement is the 24/7 access to electronic health records that many practices do not yet have.

    The big concern is that rather than focusing and helping practices that serve the most complex population provide this much needed service, this code looks to benefit larger practices and reach a broader population of patients with two or more chronic conditions. In addition, the G code requirements do not make it clear whether the service can be billed in the assisted living and domiciliary settings. AMDA stated that since in these settings “staff may or may not be employed by a physician, many physicians still provide the types of service this code intend to reimburse.” AMDA suggested to CMS that “these service should be reimbursable whether the physician or hired staff provides the services described.”

    Value-Based Payment Modifier

    AMDA expressed great concern about CMS’ proposals to continue the implementation of the value-based payment modifier (VBM). CMS proposed to increase financial penalties from 2 to 4 percent and continued to expand the program to apply to practices of 10 or more in order to comply with the statutory deadline to apply the modifier to all physicians by 2017. AMDA’s letter expressed concern over this proposal stating that “while CMS proposes to continue to expand the program and increase the penalty amount, the agency did not provide any response or discussion to AMDA’s concerns about physician who practice in PALTC facilities that have significantly higher cost scores than their peers in office-based practices and other settings and how they would be unfairly penalized in this system.” The issue arises from the fact that the CMS “specialty adjustment” does not take into account the higher cost settings of care, like nursing facilities, and all of family or internal medicine are compared on the same scale regardless of settings.

    Over the past year, AMDA has engaged in dialogue with CMS to find solutions to this problem. AMDA is concerned that the VBM as is currently applied will do very little, if anything, to improve quality in PALTC and in fact, may hurt patient access to quality physician care by imposing significant financial penalties for physicians committed to taking care of these patients. Preliminary analysis by several large PALTC groups have shown that physicians who take care of these patients do in fact score unfavorable under VBM simply by virtue of the setting they practice in creating an unfair system. AMDA’s comments pointed to a report by Harold Miller, CEO at the Center for Healthcare Quality and Payment Reform, that came to a similar conclusion stating that “effective-risk based systems should compare spending on subgroups of patient with similar needs or risk factors, including functional limitations such as socio-economic factor that lead to different outcomes for different patients.” A recently formed AMDA task-force on this issue will continue to dialogue with CMS to resolve these issues.

    For more discussion on these and other topics enumerated above please read the entire AMDA response here.