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%.

 

 

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.

 

 

 

 

Government Shutdown on Medicare

government_400The governments fiscal year begins from October 1st and runs through September 30th meaning the 2014 fiscal year begins on Tuesday, October 1st, 2013. Typically during that time,  Congress is required to pass and the President sign appropriations bills that will release funds needed for the federal government to operate.

As of today, none of the 12 appropriations bills that will fund the government for the 2014 fiscal year, have been signed into law. What this means as of now, and at midnight tonight, that the government has no funds available to pay salaries of federal employees, grants, and other utilities for government operations. Congress is debating approving what is called the “Continuing Resolution” or CR. It is a legislation that will extend the 2013 fiscal year for a length of time agreed upon by Congress and the President to continue operations. Currently the length of time for a CR is unspecified. It can be one day or a CR can be extended up to a full year.

There is a possibility that Congress and the President will not reach a resolution on the adoption of the Continuing Resolution by midnight. If Congress and the President fail to reach a resolution, the result will be that all “non essential” federal employees will be told not to show up for work tomorrow, October 1, 2013.

Questions were raised that If a government shutdown occurs, will this also effect Medicare processing claims for payment for anything sent after October 1? The answer to that question is – “No”. The funds appropriated for Medicare benefits are not subject to the appropriations process because it is an entitlement program instead of a discretionary program, and processing of Medicare claims is considered “essential”. The Center for Medicare and Medicaid Services (CMS) announced that there should be no disruption of Medicare claims processing and all CMS activities will continue regardless of a delay in the appropriations process.

 

 

 

 

SGR Fix

government_400The SGR problem that has been an issue for over a decade, remains a high priority for senate leaders. The original SGR formula was developed during the Clinton administration and has had serious flaws. Since, a fix to the SGR problem as continued to be elusive.

A fix to the SGR is not imminent due to many factors but the House and Senate feel that a permanent fix appears achievable in 2013. Congressional Committees that have jurisdiction over Medicare Physician Payment reforms have held Hearings and gotten feedback on possible permanent solutions. Both Democratic and Republican leaders remain committed to finding a permanent solution whereas in past years, the commitment level was much much less.

Proposals have been circulated amongst various physician offices, as well as some other healthcare organizations for the purpose of feedback and reaction to proposed fixes. The Healthcare Billing and Management Association (HBMA) will meet with the Senate Finance Committee and other White House staffs to assist in finding permanent fix to the SGR problem.

If Congress fails to find a permanent solution prior to the end of 2013, the current estimate of a 24% reduction in provider payments will be necessary to comply with SGR law.

The following are concepts from discussions for the SGR fix:

  1. Repeal SGR and replace it with statutory increases (possibly 1 – 2% per year) for a period of time (3 – 5 years). Thus eliminating the 24% cut come January 1, 2014.
  2. Implement Specialty Specific Quality Measures as part of the payment formula.
  3. Payments would be a combination of “base rate” plus a variable rate that would be tied to quality/performance.
  4. A score on quality would be based upon a comparison of peers AND compared to the individual providers prior year scores AND provider participation in specialty specific clinical improvement initiatives.
  5. Providers of the same specialty would “self-identify” with a peer cohort and provide information on:
  • Identifies the peer group the provider wants to be compared to; and
  • Provides information on quality measures applicable peer group that the provider is assigned

The Health & Human Services (HHS) Secretary will be responsible for the development and methodology for assessing the performance of providers with respect to the measures and for methods of collecting data for the assessments. The Secretary is directed to develop the processes in a way that will minimize the administrative burden to ensure reliable results.

The HBMA and other healthcare organizations, continually encourge Congress to find a permanent solution to the SGR problem before January 2014.

 

Improving Documentation

1314902_medical_doctorThe purpose of ICD-10 is to provide more detailed information on the care being provided. There are many steps that need to be taken in order for a practice to prepare for the ICD-10 conversion that is coming October 1, 2014. One of the key changes that will need to be made by some, if not most, physicians is what type of information is being documented in a patient’s medical records and determining whether that information is enough.

Looking at how diagnosis information is being documented will help physicians and coding staff be better prepared for the ICD-10 switch.

Here is a suggested process on how you can better prepare your documentation for ICD-10.

Pull a handful of medical records on some of your more commonly used diagnoses. Review those records with your coding staff, and have them determine if your current documentation provides enough information to associate the appropriate ICD-10 code. If it doesn’t, then you’ll know improving documentation is a necessary change for your practice.

But what kind of information are you supposed to include in your documentation to be able to code for ICD-10???

The best way to think of what the differences are between ICD-10 and ICD-9 is to think of ICD-10 as “expanded”. Most diagnoses in ICD-10 are expanded to include things like body locations, types, causes etc. Laterality is an example of what is expanded in ICD-10. So, documentation for diagnoses needs to include information on which side of the body is affected (right, left, or bilateral). Below are a few other examples of how ICD-10 is expanding on a particular diagnosis and the documentation that will need to be in the medical records.

Fractures –

  • Site
  • Laterality
  • Type
  • Location

Injuries –

  • External Cause – You will need to provide “how” the injury occurred.
  • Place of occurrence – Where did the injury take place?
  • Activity code – What was the patient doing that caused the injury?
  • External cause status – Indicate if the injury was related to another source (military, work, etc.)

Diabetes Mellitus –

  • Type of Diabetes
  • Complication or manifestation
  • Body system affected
  • If type 2 diabetes, long-term insulin use

Making your documentation as detailed as possible will help your coding staff assign the appropriate codes and help reduce the potential for rejected claims. ICD-10 shouldn’t affect patient care. All it is doing is requiring more detailed information. Most of the information is likely already being provided to you during the patient’s visit. It is just making sure you’re recording everything your coding staff will need to chose the correct code.

Improving documentation will improve coding staff turnaround time on billings and in turn reduce the amount of rejected claims for coding issues and so will help you to maintain a consistent revenue stream.

 

ICD-10

141,000!!

What is that 141,000 number mean? That is just the total number of ever more specific diagnosis codes that comes along with the Tenth Edition of the International Classification of Disease (ICD-10). A little bit of an increase from the Ninth Edition (ICD-9) which totaled 17,000 codes. The department of Health and Human Services (HHS) extended the compliance date from what would have been October 1 of this year, to October 1, 2014. Although the date has been pushed back once again, HHS urges all covered entities under the Health Information Portability and Accountability Act (HIPAA) to continue, or start, preparations for the transition to ICD-10.

A transition of this magnitude requires extensive planning and preparation in all aspects of a medical practice and throughout the industry. It is recommended that timelines be established as soon as possible to help manage tasks and keep the transition from becoming too overwhelming.

The Centers for Medicare & Medicaid Services (CMS) have created an example timeline to help illustrate the process. Click the link below to view the timeline.

http://www.cms.gov/Medicare/Coding/ICD10/Downloads/ICD10SmallMediumTimelineChart.pdf

What does this mean for a physician?

Most changes will be on coding and coding staff becoming familiar with the new format of codes and the multiple options for a specific diagnosis. It will also take some coordination from physicians in being more specific with their diagnosis when charting. In ICD-9 there would typically be one option for a particular condition, where as in ICD-10 there may be multiple. Below is an example of of the differences of what is reported using ICD-9 and what will be required with ICD-10.

Example: 1                                      

ICD-9

784.0 – Headache

ICD-10

G441 – Vascular Headache Not elsewhere classified

R51 – Headache

Example: 2

ICD-9

784.59 – Speech Disturbances

ICD-10

R4702 – Dysphasia

R4781 – Slurred Speech

R4789 – Other Speech Disturbances

Note: ICD-10 will not affect CPT codes.

Although diligent efforts are being made industry wide for a smooth efficient transition, a change of this scale is not without it’s bumps and hiccups, foreseen and unseen alike. Payment, and claims processing delays are a major concern. With the 5010 transition last year which was the electronic claim file format upgrade from 4010, payment and claims processing delays did cause cash flow problems nationally. Cash flow is a major concern to any organization, group, private practice or covered entity under HIPAA. To help organizations prepare as best they can and avoid cash flow issues, it is being recommended that organizations begin preparations now! Some consultants have also suggested providers and organizations build a line of credit that can sustain them anywhere from two to six months after the compliance date to manage delays in payments.

Training of coding and other staff is also a vital component for preparations for the ICD-10 transition. Studies showed that after the ICD-10 transition in Canada, staff productivity dropped by 50 percent in the first six months. A drop in productivity means that fewer patient claims will be submitted timely and more money paid to staff for increased time thus affecting cash flow and the bottom line. It is imperative that physicians and organizations help staff to understand the importance of preparing for the transition to avoid productivity drops.

Contacting vendors is also another key cog in the wheel of preparation. Contact and follow up with, EHR/EMR vendors, billing software vendors, outsourced billing providers, electronic clearinghouses, and payers. Software testing with clearinghouses and payers will typically be handled through the software vendors, or outsourced service providers but none the less, providers and organizations should follow up to ensure preparation and timelines have been established.

Some helpful hints to plan for the ICD-10 transition:

  • Start a plan
  • Establish a timeline
  • Contact vendors
  • Staff Training
  • Build a line of credit

If you’re asking yourself, “when do i start planing for ICD-10?”. THE TIME IS NOW!

 

Medicare Claim Hold

CMSTechnical issues with certain parts of the quarterly system release have been identified by The Centers for Medicare & Medicaid Services (CMS). Claims that were affected were, Home Health final claims, outpatient Critical Access Hospital (CAH) and Rural Health Clinic (RHC) where money was applied to beneficiary deductible, and the remittance advice summary payment amount for Medicare Advantage inpatient prospective payment system (IPPS) with indirect medical education. However, actual payments and the claim level payment amounts on remittance advices were correct, Claim dates that were affected were dates of service or “Through Dates” on or after April 1, 2013. Final Home Health, CAH, RHC and IPPS claims with dates of service “Through Dates” prior to April 1, 2013 were unaffected.

CMS has instructed all Medicare claims administrators to hold these specific claim types until April 14, 2013. CMS expects to have the fixes for these claims issues implemented by that day. The affected claims will then be released for processing on April 15, 2013. The claim hold is expected to have minimal impact on provider cash flow. web change alert Due to current law, clean electronic claims are not paid sooner than 14 calendar days after the date of receiving the claim. Paper claims are held 29 days after the date of receiving the claim.

Physician Quality Reporting System (PQRS)

stethoscope notepadThe Physician Quality Reporting System (PQRS), formerly the Physician Quality Reporting Initiative (PQRI), is designed to create incentives and also adjustments for eligible professionals to report quality information back to the Centers for Medicare & Medicaid Services (CMS).

For what purpose???

CMS intends PQRS to create a “quality standard” of satisfactory reporting. In doing so the hope is to lower the possibility of fraudulent claims and maximize the level of payment to providers.

Eligible professionals who successfully report the quality measures required to CMS on at least 50 percent of Medicare Part B and Railroad Medicare covered services, are eligible to receive a 0.5 percent payment incentive on their total estimated allowed charges to the Medicare Part B Physician Fee Schedule (PFS) during the reporting period (calendar year). The estimated Allowed charges of course are based on covered professional services under the PFS. Eligible professionals who do not meet the required 50 percent of the Physician Quality Reporting System during the specified reporting period, will be subject to a 2 percent adjustment of their total allowed covered charges to the PFS, meaning a 2 percent reduction in Medicare Part B and Railroad Medicare eligible payments.

To begin reporting quality measures for the Physician Quality Reporting System requires no registration or forms. Quality measures are reported to CMS on Medicare Part B and Railroad Medicare covered services one of four ways. The first (1) being on Medicare Part B and Railroad Medicare claims. The second (2) being, a qualified physician quality reporting registry. The third (3), transmission to CMS through a qualified electronic health records (EHR/EMR) software or product. Fourth (4), transmission through a qualified Physician Quality Reporting System vendor.

The Physician Quality Reporting System is in effect for 2013 for eligible professionals to receive incentive payments of 0.5 percent for successfully reporting quality measures on 50 percent of their Medicare Part B and Railroad Medicare patients in 2014. The adjustment or payment reduction of 2 percent is also in effect for eligible professionals who do not report quality measures on at least 50 percent of Medicare Part B and Railroad Medicare patients.

Physician Quality Reporting System eligible professionals include:

Physicians:

Doctor of Medicine

Doctor of Osteopathy

Doctor of Podiatric Medicine

Doctor of Optometry

Doctor of Oral Surgery

Doctor of Dental Medicine

Doctor of Chiropractic

Practitioners:

Physician Assistant

Nurse Practitioner

Advanced Practice Registered Nurse

Clinical Nurse Specialist

Certified Registered Nurse Anesthetist

Certified Nurse Midwife

Clinical Social Worker

Clinical Psychologist

Registered Dietitian

Nutrition Professional

Audiologist

Therapists:

Physical Therapist

Occupational Therapist

Qualified Speech – Language Therapist

 

 

Sequestration

graph down 2Beginning April 1, 2013 the Budget Control Act of 2011, or sequestration, will take effect. What this means to providers is a mandatory 2 percent reduction in the Medicare Fee-for-Service (FFS) program for all FFS claims with dates of service on or after April 1, 2013. The reduction will take effect in Part A, Part B and durable medical equipment (DME). DME includes, prosthetics, orthotics, and supplies, including claims under the Competitive Bidding Program. satellite map . The same 2 percent reduction will be based on date of service or the start date of rental equipment or multi-day supplies being on or after April 1, 2013.

The reduction will occur after determining coinsurance, deductible, and any applicable Medicare secondary payment adjustments.

The 2 percent reduction will be reflected on Medicare remittances (ERA). The remittance will appear the same with an addition of a separate adjustment that will show by the CAR (Claim Adjustment Reason) code 223 – Adjustment code for mandated federal, state or local law/regulation that is not already covered by another code and is mandated before a new code can be created to reflect the 2 percent reduction. This will show as a line level adjustment on Part B providers and a claim level adjustment on Part A providers.

Medicare Refunds

CMSAt the beginning of the year, President Obama signed the American Tax Payer Relief Act of 2012. Within this act, there is a provision that allows CMS/Medicare two additional years to go back and request refunds on overpayment or payment made in error. hosting information . What this essentially means is that Medicare can now go back 5 years instead of 3 years when requesting refunds. The provision is in section 638 and is as follows…

“Sec. 638 REMOVING OBSTACLES TO COLLECTION OF OVERPAYMENT.

A. IN GENERAL – The last sentence of subsection (b) and (c) of section 1870 of the Social Security Act (42 U.S.C. 1395gg) are each amended.

B. By striking “third year” and inserting “fifth year” and by striking “three year” and inserting “five year””