CMS' MPFS Proposed Rule Solves Longstanding Problems

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  • July 16, 2012
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The changes to policies and rates under the Center for Medicare & Medicaid Services’ (CMS) proposed rule for the Medicare Physician Fee Schedule (MPFS) include sweeping fixes, and it allows for changes resulting from the Patient Protection and Affordable Care Act (ACA). Scheduled to be released in the Federal Register later this month, comments are due on the proposed rules Sept. 4.
Here is a run-down of the proposed changes.:
Since 1992, Medicare has paid for the services of physicians and non-physician practitioners (NPPs) under the Medicare Fee Schedule. Under MPFS, each code/service is assigned a relative value (RVU) that reflects the amount of physician work, practice expenses, and the malpractice expenses associated with furnishing the service. The RVUs for a particular service are multiplied by a fixed-dollar conversion factor and a geographic adjustment factor to determine the payment amount for each service.
Primary Care and Care Coordination
In recent years, CMS has talked about recognizing primary care and care coordination as critical components in achieving the “triple aim” – Better Health, Better Care, and Lower Cost. In this proposed rule, CMS is announcing a series of initiatives designed to encourage investment in primary care and care coordination services.
As part of this new approach, CMS is proposing to create new G codes to recognize the additional resources required to coordinate a patient’s care following discharge from an inpatient hospital stay or skilled nursing facility (SNF) stay.
In what is substantially a new policy, Medicare would establish a separate payment for care management services for the beneficiary that occur outside a face-to-face encounter with the physician. CMS maintains that recognizing the work of physicians and NPPs with the proposed new code will ensure better continuity of care for these patients and support the agency’s readmission reduction initiatives.
However, it should be noted that in describing these new codes (and the values associated with them, ) CMS compares these to the 99211 code. If 99211 is a level 1 E/M visit that does not require physician involvement and is described as follows:

“…office or other outpatient visit for the evaluation and management of an established patient that may not require the presence of a physician. Presenting problems are usually minimal, and typically five minutes are spent performing or supervising these services.”

The resulting reimbursement level is quite low and it is hard to imagine how the desired level of care or involvement will occur at the level of payment CMS is proposing. These codes are time-based and CMS is presuming 15 minutes of time total.
The proposed rule also discusses the possibility of other efforts to bolster care coordination for Medicare beneficiaries, and solicits public comment regarding how the program might recognize and pay for advanced primary care medical home services in the fee-for-service setting.
CMS estimates the total value of improved payments for primary care will result in an aggregate increase in Medicare payments for primary care services of 7 percent. However, it must be pointed out that RVU adjustments or coding adjustments must be enacted in a “revenue neutral” fashion by CMS. That means for CMS to increase payments for primary care or care management, it must decrease payments elsewhere to offset those increases. Below is a sample of some of the various specialties and what CMS expects will happen – in the aggregate to provider payments in those categories.

Specialty Allowed Charges PPIS Transition New Care Coor Total change
Family Practice $5.8 Billion + 2% + 5% + 7%
Internal Medicine $11 Billion + 1% + 3% + 5%
Anesthesiology $1.9 Billion – 2% – 1% – 3%
Radiation Oncology $1.9 Billion – 3% – 7% – 15%
Diagnostic Testing Facility $848 Million – 5% – 2% – 8%
Radiation Therapy $71 Million – 4% – 2% – 19%
Radiology $4.7 Billion – 2% – 1% – 4%

Potentially Misvalued Codes
CMS has engaged in a vigorous effort over the past several years to identify potentially mis-valued codes. When CMS concludes that a code is mis-valued, they can revise the payment accordingly. Last year, CMS finalized a process for the public to recommend potentially mis-valued codes to CMS.
CMS is proposing to reduce the procedure time assumptions used in developing RVUs for intensity modulated radiation treatment (IMRT) delivery and stereotactic body radiation therapy (SBRT) delivery, which, they argue, would more accurately pay for these radiation therapy services.
Bundled Surgical Services
CMS seeks input on improving the value of the global surgical package and requests public comment on methods of obtaining accurate and current data on E/M services furnished as part of global surgical procedures.
Interest Rate Assumptions
CMS is also proposing to improve the accuracy of payment rates to reflect current economic conditions by revising interest rate assumptions used to establish payment for practice expense from 11 percent to a range from 5.5 to 8 percent based on the Small Business Administration maximum interest rates for different categories of loan size (equipment cost) and maturity (equipment useful life).
Multiple Procedure Payment Reduction Policy
Medicare has a policy to reduce payment for the second and subsequent surgical procedures performed on the same patient by the same physician or physician group practice on the same day. A similar policy is in place for imaging services performed on “contiguous body parts.”
For 2013, CMS is proposing to apply a multiple procedure payment reduction policy to the technical component of certain cardiovascular and ophthalmology diagnostic services. CMS would make full payment for the highest paid cardiovascular or ophthalmology diagnostic service and reduce the technical component payment for subsequent cardiovascular or ophthalmological diagnostic services furnished by the same physician or group practice to the same patient on the same day by 25 percent.
Durable Medical Equipment (DME) Face-to-Face
To help combat fraud and reduce improper payments in DME items, CMS is proposing to implement a face-to-face requirement as a condition of payment for certain high-cost DME covered items. This list includes many items that have been historically targets of Medicare fraud as identified by the OIG, MACs, GAO, and others. The requirement is one of the anti-fraud provisions in the ACA and is consistent with similar face-to-face requirements for the Medicare home health and Medicaid DME benefit.
Elimination of Prepayment Medical Review Limitation
Based on the ACA, CMS is proposing to remove a limitation placed on contractors to continue complex prepayment medical review if a provider or supplier has failed to reduce its individual error rate.
Payment for Molecular Pathology Services
CMS is inviting comments on whether newly created molecular pathology CPT codes should be paid under the MPFS or the Clinical Laboratory Fee Schedule (CLFS). If CMS determines that new molecular pathology CPT codes should be paid under the MPFS for 2013, CMS proposes that Medicare contractors would price these codes because the price of tests can vary locally and because this would allow more time for CMS to gather information on these codes to price them nationally.
Telehealth Services
CMS is proposing to add a series of preventive services to the list of Medicare telehealth services for CY 2013. These include annual alcohol misuse screening, brief behavioral counseling for alcohol misuse, annual face-to-face intensive behavioral therapy for cardiovascular disease, annual depression screening, behavioral counseling for obesity, and semi-annual high intensity behavioral counseling to prevent sexually transmitted infections. In addition, CMS is proposing to add alcohol and/or substance abuse assessment and intervention services to the list of Medicare telehealth services for CY 2013.
Therapy Data Collection
CMS is proposing to implement a claims-based data collection process for therapy services to gather data about patient function and condition. Under the proposal, therapists will be required to include new “non-payable G codes and modifiers” on claims for therapy services that will not affect payment but will convey information about patients’ functional limitations at the outset of therapy, periodically throughout therapy, and at discharge from therapy.
This system is proposed to be implemented on January 1, 2013.

Removing Barriers to Midlevel Providers
CMS proposes to revise payment regulations to allow nonphysician practitioners (NPPs) and limited-license physicians to order portable X-ray services within the scope of their Medicare benefit and state scope of practice laws. CMS regulations limit ordering of portable X-ray services to a doctor of medicine or osteopathy.
In addition, CMS proposes to clarify that “anesthesia and related care” for purposes of the Certified Registered Nurse Anesthetist (CRNA) benefit means services related to anesthesia that are within the state scope of practice for CRNAs in the state in which the services are furnished.
Quality Reporting
The proposed rule outlines changes to several of the quality reporting initiatives associated with MPFS payments – the Physician Quality Reporting System (PQRS), the Electronic Prescribing (eRx) Incentive Program, and the PQRS-EHR Incentive Pilot – as well as changes to the Physician Compare tool on the website. The proposed rule includes rules for implementing the physician value-based payment modifier (Value Modifier). This will affect payments to physician groups based on the quality and cost of care they furnish to beneficiaries enrolled in the traditional Medicare.

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