CMS Proposes Regulations: Changes to Physician Fee Schedule, Hospital Outpatient, and Ambulatory Surgical Center Policy and Payment

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[co-author: Corey Kestenberg]

On July 3, 2014, Centers for Medicare and Medicaid Services (CMS) proposed two regulations, CMS-1612-P and CMS-1613-P. The former revises payment policies under the Medicare Physician Fee Schedule, while the latter makes changes to hospital outpatient and ambulatory surgical center policy, payment, and quality reporting programs. CMS intends to issue final regulations, effective calendar year 2015.

Proposed changes to the Medicare Physician Fee Schedule (PFS) include:

  • Payment for Chronic Care Management (CCM): Providers would receive $41.92 for billing the CCM code; they would be permitted to bill it one time per month per each qualified patient. CMS also proposed additional standards for electronic health records as they relate to CCM. [1]
  • Additions to the Misvalued Codes List: CMS would add roughly 80 codes to its list of potentially misvalued codes. Also, radiation therapy services would experience a pay reduction, and CMS would redistribute this funding to other PFS services. [2]
  • Transformation of Global Surgery Codes: Starting in 2017, all 10- and 90-day global codes would be converted into 0-day global codes. For certain surgical procedures, CMS would pay one value for services performed on the surgery day and would pay separately for visits and services rendered after the day of surgery. [3]
  • Enhanced Transparency Rate Setting: Before revisions to payment inputs are applied to payment rates, CMS would subject such revisions to public comment. [4]
  • Addition of New Telehealth Services: Annual wellness visits, psychoanalysis, psychotherapy, and prolonged evaluation and management services would be added to the telehealth services that are available to beneficiaries. [5]
  • Data Collection on Off-Campus Provider-Based Departments: In an effort to collect data on services provided in off-campus provider-based departments, hospitals and physicians would need to report a modifier for services performed in these venues. [6]
  • Elimination of Employment Requirement for Rural Health Clinics (RHCs): CMS would abolish the current requirement that an employee of the RHC provide RHC services incident to a visit. This would allow non-employee nurses, medical assistants, and other personnel to provide services incident to an RHC visit under contract. [7]
  • Modifications to the Sunshine Act Requirements: This provision would delete the Sunshine Act reporting exclusion for payments or other transfers of value provided as compensation for speaking at certain accredited or certified continuing education programs. Manufacturers of covered drugs, devices, biologicals, and medical supplies would be required to report to CMS payments or other transfers of value they distribute to all continuing medical education event speakers (subject to other applicable reporting criteria). The proposed rule would also require manufacturers to report to CMS the marketed name of covered and non-covered devices and medical supplies related to a payment or other transfer of value, aligning the requirements for devices and medical supplies with those for drugs and biologicals, for which the marketed name must be reported under current requirements. Additionally, the proposed changes would require manufacturers to report stocks, stock options, or other ownership interests as separate reporting categories. [8]

Proposed changes to the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Policy, Payment Rates, and Quality Reporting Programs include:

  • Updating the OPPS Market Basket: The OPPS market basket would be updated by 2.1% for calendar year 2015. [9]
  • Increasing the Number of Comprehensive Ambulatory Payment Classifications (APCs): CMS would add several Comprehensive-APCs, including lower cost device-dependent APCs, an APC for procedures that are largely device-dependent, and an APC for procedures that are delivered in one session but involve various components. Some current APCs would be consolidated or restructured. [10]
  • Packaging Payments for Ancillary Services: This provision would enable CMS to conditionally package the payments for ancillary (those related to primary care) services that are assigned to APCs. Initially, ancillary services would be packaged this way only in APC’s with a geometric mean cost of less than or equal to $100. Preventive, psychiatric, and drug administration services would be exempted from this packaging. [11]
  • Adjusting the Hospital Outpatient Outlier Payment: Hospitals would receive OPPS outlier payments only if the service’s cost exceeds 1.75 times the APC payment rate and exceeds the 2015 APC dollar amount plus $3100. [12] Currently, OPPS outlier payments to hospitals are triggered when the cost of service exceeds 1.75 times the APC amount, and exceeds the APC dollar amount plus $2900. [13]
  • Updating Partial Hospitalization Program Per Diem Rates: The regulation would update the community mental health center per diem rates to $97.43 for Level I services and $114.93 for Level II services. These rates would remain relatively constant compared to 2014 rates. However, the regulations would also update per diem rates for hospital-based partial hospitalization programs to $177.32 for Level I services and $190.21 for Level II services. This represents a decrease of approximately $14 for Level I services and a decrease of approximately $24 for Level II services from their 2014 amounts. [14]
  • Changing the Measures Included in the Hospital Outpatient Quality Reporting (HOQR) Program and Aligning HOQR Measures with Measures in the ASC Quality Reporting Program: Three measures would be removed from the HOQR program—one cardiac care and two prophylactic antibiotic surgery. One claims-based measure concerning the risk of having a hospital visit after outpatient colonoscopies would be added to the HOQR Program for 2017 and a similar measure would be added to the ASC Quality Reporting Program as an outcome measure. Further reporting in both quality reporting programs on visual function 90 days after cataract surgery would change from mandatory to voluntary. [15]

CMS is accepting comments on these proposed rules until September 2, 2014.

[1] See Revisions to Payment Policies Under the Physicians Fee Schedule, 79 Fed. Reg. 40318, 40365 (July 11, 2014), available here; Press Release, Centers for Medicare and Medicaid Services (CMS), Proposed Policy and Payment Changes to the Medicare Physician Fee Schedule for Calendar Year 2015 (July 3, 2014), available here. All citations in this summary are to the versions included at the links provided.

[2] 79 Fed. Reg. 40318, 40337- 40339; Press Release, Physician Fee Schedule.

[3] 79 Fed. Reg. 40318, 40345-40346; Press Release, Physician Fee Schedule.

[4] 79 Fed. Reg. 40318, 40361-40364; Press Release, Physician Fee Schedule.

[5] 79 Fed. Reg. 40318, 40358-40359; Press Release, Physician Fee Schedule.

[6] 79 Fed. Reg. 40318, 40334; Press Release, Physician Fee Schedule.

[7] 79 Fed. Reg. 40318, 40376.

[8] 79 Fed. Reg. 40318, 40383-40385; Press Release, Physician Fee Schedule.

[9] Hospital Outpatient Policy and Payment Changes and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs, 79 Fed. Reg. 40916, 40921 (July 14, 2014), available here; Press Release, Centers for Medicare and Medicaid Services (CMS), CMS Proposes Hospital Outpatient and Ambulatory Surgical Centers Policy and Payment Changes for 2015 (July 3, 2014), available here. All citations in this summary are to the versions included at the links provided.

[10] 79 Fed. Reg. 40916, 40922; Press Release, CMS Proposes Hospital Outpatient Policy and Payment Changes.

[11] 79 Fed. Reg. 40916, 40922; Press Release, CMS Proposes Hospital Outpatient Policy and Payment Changes.

[12] 79 Fed. Reg. 40916, 40970; Press Release, CMS Proposes Hospital Outpatient Policy and Payment Changes.

[13] 79 Fed. Reg. 40916, 40970.

[14] 79 Fed. Reg. 40916, 41011-41012; Press Release, CMS Proposes Hospital Outpatient Policy and Payment Changes.

[15] 79 Fed. Reg. 40916, 41066-41067; Press Release, Centers for Medicare and Medicaid Services (CMS), CMS Proposes Hospital Outpatient and Ambulatory Surgical Centers Quality Changes for 2015 (July 3, 2014), available here.

Topics:  CMS, Healthcare, Healthcare Reform, Hospitals

Published In: Health Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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