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2016 Medicare Physician Fee Schedule: 5 Things to Note


On October 30, the Centers for Medicare and Medicaid Services (CMS) issued a final rule updating payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2016. This final rule is the first under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) passed by Congress back in April, the same legislation that fixed the flawed Sustainable Growth Rate formula.

In addition to setting fees for Medicare services and updating quality programs like the Physician Quality Report System and the Value-Based Payment Modifier (which we will cover in future articles), the final rule implemented several new billing guidelines for Medicare providers. Among many, here are five notable updates.

Advance Care Planning

CMS established codes and payment rates for two advance care planning services provided to Medicare beneficiaries in addition to the current “Welcome to Medicare” visit, the only way those services previously could be reimbursed. The two codes, along with their work RVUs are 99497 Advance Care Planning, first 30 minutes, face-to-face with the patient, family member(s), and/or surrogate (1.5 wRVUs) and 99498 Advance Care Planning, each additional 30 minutes, face-to-face with the patient, family member(s), and/or surrogate (1.4 wRVUs).

Advance care planning helps patients make important decisions about the type and timing of the care they receive. Establishing separate payment for these services allows beneficiaries and practitioners greater opportunity and flexibility to utilize them at the most appropriate time for patients and their families.

The American Medical Association CPT Editorial Panel and the AMA Relative Value Update Committee (RUC) recommended the new CPT codes and associated payment amounts for calendar year 2015. However, CMS did not make the new codes payable for 2015 in order to allow the public full opportunity to comment.

Appropriate Use Criteria for Advanced Imaging Services

In the 2014 Protecting Access to Medicare Act (PAMA), Congress required that providers who order advanced diagnostic imaging services must consult with appropriate use criteria via a clinical decision support mechanism. PAMA also required CMS to take other steps toward collecting information on claim forms and ultimately developing a prior authorization program by January 1, 2020.

In the 2016 final rule, CMS implemented the first component of these guidelines by establishing which organizations are eligible to develop or endorse appropriate use criteria, the evidence-based requirements for AUC development, and the process CMS will follow for qualifying provider-led entities. None of these guidelines impact CY 2016 physician payments under the PFS.

Potentially Misvalued Codes

The Affordable Care Act (ACA) instructed CMS to identify “misvalued codes” in the Physician Fee Schedule, and PAMA mandated a target for adjustments to misvalued codes in the fee schedule for calendar years 2017 through 2020, with a target amount of .5 percent of the estimated expenditures under the PFS for each of those four years. Subsequently, the Achieving a Better Life Experience Act of 2014 (ABLE) accelerated the application of the target by specifying it would apply for calendar years 2016 through 2018, and increasing the target to 1 percent for 2016.

In the 2016 final rule, CMS adopted methodology to implement this provision, including how net reductions in misvalued codes would be calculated. Based on that methodology, CMS identified changes that achieved .23 percent in net reductions, requiring a .77 percent reduction to all 2016 PFS services, as required by the statute.

As well, PAMA specified that if the total RVUs for a service would otherwise be decreased by an estimated amount equal to or greater than 20 percent as compared to the total RVUs for the previous year, the adjustments must be phased-in over a two-year period. CMS finalized the proposal to phase in these reductions by reducing the value for a service by the maximum allowed amount (19 percent) in the first year, and to phase in of the percent remainder of the reduction in the second year.

Misvalued Code Changes for Lower GI Endoscopy Services

Among those codes marked as potentially misvalued, the AMA CPT Editorial Panel revised the lower gastrointestinal endoscopy code set for CY 2015 following identification of some of the codes as potentially misvalued. The RUC subsequently provided recommendations to CMS for valuing these services. For 2016, CMS finalized implementation of the revised set of codes, including the revised values. The American Gastroenterological Association compiled a list of the top codes reduced by RVU percentage:

  • Colonoscopy with control of bleeding (CPT code 45382): -16 percent
  • Flexible colonoscopy with ablation (CPT code 45388): -15 percent
  • Colonoscopy with submucosal injection (CPT code 45381): -13 percent
  • Flexible sigmoidoscopy (CPT code 45330): -13 percent
  • Colonoscopy with snare polypectomy (CPT code 45385): -12 percent
  • Colonoscopy with hot biopsy (CPT code 45384): -11 percent
  • Colonoscopy (CPT code 45373): -9 percent
  • Flexible sigmoidoscopy with biopsy (CPT code 45331): -1 percent

Physician Compare

The 2016 PFS final rule continues the phased approach to public reporting on Physician Compare. CMS will continue to make all 2016 individual EP and group practice PQRS measures available for public reporting, including all CAHPS for PQRS measures for groups of two or more EPs who meet the specifications. In addition, all Accountable Care Organization (ACO) measures, including CAHPS for ACOs, are available for public reporting.

CMS also will include the following on the Physician Compare website: the Certifying Board for each eligible professional (EP), an indicator on profile pages for individual EPs who satisfactorily report the new PQRS Cardiovascular Prevention measures group, item-level benchmarks using the Achievable Benchmark of Care (ABC™), the Value Modifier tiers for cost and quality, and utilization data for individual EPs.

For more information, review the CMS Fact Sheet about the 2016 MPFS Final Rule or scan through the entire final rule for yourself.

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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