2014 Medicare Physician Fee Schedule Final Rule

CMSLast week, the Centers for Medicare and Medicaid Services (CMS) released the 2014 Physician Fee Schedule Final Rule which finalizes the physician and non-physician rates for 2014. A press release that accompanied the final rule said “CMS projects that total payments under the fee schedule in 2014 will be approximately $87 billion.”

Along with this announcement was the anticipated revealing of the the Medicare Conversion Factor (MCF) for the subsequent year. Typically under the Sustainable Growth Rate or SGR formula, physicians have seen reductions in the MCF. Due to Congressional intervention, most of these cuts have been avoided for 2014.

With the Final Rule, CMS calculates the CY 2014 Fee Schedule Conversion Factor will be $27.2006. This will represent a reduction of 20.1 percent from the current CF of $34.0230. While still a reduction, it is not as a dramatically reduced as earlier estimates, but still represents a significant cut in physician fee schedule payments if Congress fails to intervene. Without Congressional intervention, physicians will experience a 20.1% reduction in their fee schedule payments that is exclusively due to the SGR. The reduction could possibly be mitigated for certain specialties due to higher Relative Value Unit (RVU) scores for certain services. Meaning the actual reduction amount could be even higher for specialties where the final rule reduces the RVU for certain services.

According to CMS, certain specialties will see payment rate increases based on the new rates for 2014, with the greatest increases going to mental health providers. CMS also plans to reduce the value of certain codes based on what they consider “mis-valued”.

The final rule includes several provisions with regards to physician quality programs and the Physician Value-Based Payment Modifier. CMS is finalizing proposals to apply the Physician Value-Based Payment Modifier to physician groups with 10 or more professionals for 2016. Physicians in groups of 100 or more professionals, will also be subject to upward and downward payment adjustments based on their performance beginning 2016. However only upward adjustments will be applied based on performance for groups with professionals between 10 and 99 physicians. CMS says, at this time, physicians in “small” groups will NOT be subject to downward payment adjustments.

Physicians will be able to report quality measures through qualified clinical data registries starting January 1, 2014. Previously this option was reserved for physicians working in groups.

CMS is also planning to align quality measures across quality reporting programs so physicians and other professionals may report a measure once in order to receive credit in all quality reporting programs in which that measure is used. Data collected in 2012 for physicians reporting PQRS measures under the Group Practice Reporting Option (GPRO) will be publicly report on the CMS Physician Compare website in 2014.