AMA Summary of the 2014 Medicare Physician Fee Schedule Rule

December 13, 2013

From the AMA:
On November 27, the Centers for Medicare & Medicaid Services (CMS) released the 1,369-page 2014 Medicare Physician Fee Schedule final rule, which was published in the December 10 Federal Register.  Most provisions take effect January 1, 2014, although a few issues are open for public comment by January 27, 2014.  Below are some of the key highlights of the rule.

  • Absent Congressional action, the sustainable growth rate (SGR) payment adjustment for 2014 is 23.7 percent.  When combined with two budget neutrality adjustments (unrelated to SGR), the net decrease to the conversion factor for 2014 payments under the MPFS will be 20.1 percent.
  • After strong opposition from the AMA and many specialty societies, CMS is not finalizing its plan to cap non-facility practice expenses for over 200 physician services at the lower rates for ambulatory surgical centers or hospital outpatient departments.  The caps were below crucial supply costs for some procedures.
  • The rate of CMS acceptance of RUC recommendations for 2014 is 76 percent.  RUC recommendations adopted by CMS for psychotherapy services will improve Medicare payment for mental health services by psychiatrists and non-physician practitioners.  CMS did not accept many of the RUC recommendations for upper gastrointestinal (GI) endoscopy procedures and immunohistochemistry.  $435 million will be redistributed within the MPFS for 2014.
  • CMS plans to pay for monthly chronic care management services beginning in 2015, at about $82 per month per beneficiary (using the 2013 conversion factor).  The CPT Editorial Panel has received a coding proposal consistent with CMS’ proposal, and the RUC plans to review the resource costs involved if a new CPT code is adopted.
  • For Physician Compare, CMS will begin reporting in 2015 measures collected for groups that participate in the 2014 Group Practice Reporting Option (GPRO) of the Physician Quality Reporting System (PQRS).  CMS plans to correct errors identified during the preview period, prior to publication.
  • 2014 is the last year physicians can qualify for an incentive payment of 0.5 percent under PQRS; starting in 2015, there will only be penalties for failure to achieve satisfactory reporting.  Physicians will only have to report on 50 (versus 80) percent of applicable patients.  Individual reporters must report on at least nine measures to receive incentives, and must report on more than one measure or measures group—and cannot use the administrative claims option—to avoid the PQRS penalty.  Measures groups will only be reportable via registry.  The GPRO will still be available to practices of 25-99 eligible professionals (EPs).  CG-CAHPS surveys will count toward satisfactory reporting for groups of 25 or more EPs.  And EPs can report quality measures within a qualified clinical data registry, instead of those on the PQRS measures list, and in order to meet Meaningful Use under the EHR Incentive Program.
  • Over strenuous objections by the AMA and others, CMS will expand the Value-Based Payment Modifier, to groups of 10 or more physicians and other health professionals in 2016.  Based on how their 2014 costs and quality compared to national averages, physicians in these groups could see a yet-to-be-determined increase or cuts of up to 2% in their 2016 payments.  CMS is required by law to apply the VBM to all physicians by 2017.  
  • In other decisions, CMS is expanding telehealth services and locations covered by Medicare; creating a new process for payment adjustments to the Clinical Laboratory Fee Schedule due to changes in technology; lowering the look-back period for re-opening claims to four years; clarifying that “incident to” services must be consistent with State scope of practice and other State laws and regulations; applying outpatient therapy caps to critical access hospitals; expanding coverage of abdominal aortic aneurysms; allowing certain non-physician practitioners to order screening fecal occult blood tests; and not allowing chiropractors to bill for evaluation and management services.
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