CMS Proposed Medicare Physician Fee Schedule for 2015

On July 3rd, the Centers for Medicare and Medicaid Services publicized its proposed changes for the 2015 Medicare Physician Fee Schedule (PFS). The proposed rule addresses changes to the physician fee schedule, and other Medicare Part B payment policies.

CMS sets values for each medical procedure through the use of Relative Value Units (RVUs) which are then multiplied by a Conversion Factor (CF) along with some minor adjustments to account for geographic differences (GPCI) to determine how much CMS will pay for a medical procedure. This rule explains CMS’ methodology for determining each component of the RVUs.

CMS provides a preliminary assessment of the SGR related cut that will be required in the subsequent calendar year should Congress fail to prevent that cut. Because the current SGR “fix” carries over into 2015 (it expires March 31st) CMS has postponed any announcement on potential SGR related cuts until later this year.

A RVU for a medical procedure consists of three components: physician work, physician expense and malpractice expense. CMS uses a formula that combines the three components into one unit which is multiplied by a conversion factor to determine how much money Medicare will pay for a procedure.

A few of the provisions addressed are:

• A new payment code for primary care providers for non-face-to-face services for patients with two or more chronic conditions. This code can be billed once per month per patient. CMS will pay $41.92 for this code.

• CMS is required to identify codes it believes may be misvalued in the PFS. CMS identifies 80 potentially misvalued codes in the 2015 PFS.

• The PFS reclassifies medical equipment infrastructure costs for radiation therapy as indirect expenses as opposed to the previous classification as a direct expenses. This will result in an 8% reduction in the allowable charges for radiation therapy center and a 4% reduction in radiation oncology. Radiology itself would be reduced by 2%.

• The PFS also announces CMS’ intent to not finalize any revalued codes until a public comment period has been held and completed on the potentially misvalued codes being revalued. CMS plans to have this process in place by 2016.

• Under the misvalued code initiative, CMS proposes to transform all 10 and 90-day global codes to 0-day global codes beginning in 2017.

• As statutorily required, CMS will begin implementing the value-based payment modifier (Value Modifier) on January 1, 2015. It will be phased in and applied to all eligible professionals (EPs) by 2017. CMS also increases the max positive payment adjustment from 2% to 4% and decreases the max negative payment adjustment from -2% to -4%.