CMS Finalizes Physician Payment Rates for 2014

November 27, 2013—The Centers for Medicare & Medicaid Services (CMS) announced the issuance of a rule that finalizes payment rates and policies for 2014, including a major proposal to support care management outside of the routine office interaction as well as other policies to promote high-quality care and efficiency in Medicare.

In response to the CMS rule, the American College of Cardiology (ACC) issued a statement commenting on two final regulations of interest to cardiovascular professionals. These regulations determine the payment levels and associated policies for services provided under the Physician Fee Schedule and the Hospital Outpatient Prospective Payment System.

The ACC advised that overall, the rules indicate a 1.7% increase in payment for hospital outpatient services and a 20% decrease in physician fee schedule services. ACC noted that the large overall decrease in physician payments is associated with the long-standing sustainable growth rate (SGR) formula. The ACC continues to urge Congress to permanently address the SGR issue, which is discussed in a recent ACC advocacy newsletter.

Changes unrelated to the SGR result in a 1% increase for services provided by cardiologists. Also, physicians will have expanded opportunities to use registries to participate in the Physician Quality Reporting System (PQRS) program. Opportunities for this will be addressed by ACC’s National Cardiovascular Data Registry in the coming months. ACC will be providing additional commentary on this regulation as its staff reviews and analyzes it.

On December 1, the Society for Cardiovascular Angiography and Interventions (SCAI) stated that it has conducted an initial review of the rule. Noting that the net impact of the rule will be a 1% increase for cardiology as a whole, SCAI also advised that CMS withdraw proposed reductions of up to 40% in payments to peripheral procedures done outside of hospitals. SCAI's Advocacy Committee will continue to analyze the final rule and will be providing updates on how it could affect physicians’ practices and patient care.

As stated in CMS’s press release, the agency believes its care-coordination policy demonstrates Medicare’s recognition of the importance of care that occurs outside of a face-to-face visit for a wide range of beneficiaries beginning in 2015. The final rule sets the payment rates for physicians and nonphysician practitioners paid under the Medicare Physician Fee Schedule for 2014 and addresses the policies included in the proposed rule issued in July. CMS projects that total payments under the fee schedule in 2014 will be approximately $87 billion.

CMS stated that as part of its continuing effort to recognize the critical role primary care plays in providing care to beneficiaries with multiple chronic conditions, beginning in 2015, the agency is establishing separate payments for managing a patient’s care outside of a face-to-face visit for practices equipped to provide these services.  

The 2014 payment rates increase payments for many medical specialties, with some of the greatest increases going to providers of mental health services, including psychiatry, clinical psychologists, and clinical social workers.  

CMS is finalizing a process to adjust payment rates for test codes on the Clinical Laboratory Fee Schedule (CLFS) based on technological changes. Currently, the payment rates for test codes on the CLFS do not change once they have been set, except for changes due to inflation and other statutory adjustments. This review process is designed to enable CMS to pay more accurately for laboratory tests on the CLFS.

The final rule also includes several provisions regarding physician quality programs and the Physician Value-Based Payment Modifier (Value Modifier). CMS states that as it continues to phase in the Physician Value-Based Payment Modifier for 2016, it is finalizing its proposals to apply the Physician Value Modifier to groups of physicians with 10 or more eligible professionals and to apply upward and downward payment adjustments based on performance to groups of physicians with 100 or more eligible professionals. However, only upward adjustments based on performance (not downward adjustments) will be applied to groups of physicians with between 10 and 99 eligible professionals.

CMS also is finalizing several related proposals to the PQRS for 2014, including a new option for individual eligible professionals to report quality measures through qualified clinical data registries. In 2014, quality measures will be aligned across quality reporting programs so that physicians and other eligible professionals may report a measure once to receive credit in all quality reporting programs in which that measure is used.

Additionally, CMS is better aligning PQRS measures with the National Quality Strategy and meaningful-use requirements and transitioning away from process measures in favor of performance and outcome measures. Finally, certain data collected in 2012 for groups reporting certain PQRS measures under the Group Practice Reporting Option will be publicly reported on the CMS Physician Compare website in 2014.  

The final rule is on display at the Federal Register and will be published on December 10, 2013.  On the CMS website, more information can be found about the Physician Fee Schedule, the Physician Value-Based Payment Modifier, and PQRS.

In the agency’s press release, CMS Principal Deputy Administrator Jonathan Blum commented, “Health care is changing, and part of delivery-system reform is recognizing this and making sure payment systems account for these changes. We believe that successful efforts to improve chronic care management for these patients could improve the quality of care while simultaneously decreasing costs through reductions in hospitalizations, use of postacute care services, and emergency department visits.”

In the ACC’s press release, the society discussed other provisions—in addition to the overall payment changes—of the CMS rule of particular importance for cardiovascular professionals.

The ACC noted that payments for many common services provided in the outpatient setting will be packaged into office visits also provided in the hospital setting, as well as packaged into other major hospital services. This includes all laboratory services.

The society also stated that CMS had proposed to package some imaging services, such as echocardiography, but did not finalize this proposal as a result of significant lobbying work by the ACC and the American Society of Echocardiography. In a similar policy, CMS will pay the same for all outpatient clinic visits, no longer recognizing different levels of service for evaluation and management.

Payments for the technical components of single-photon–emission CT and echocardiography services in the hospital will increase, and payments for many CT and magnetic resonance services will decrease, due to technical changes associated with how costs are categorized in the hospital system. Payments for the physician interpretation will not substantially change.

The ACC noted that CMS had proposed that payments for device-intensive cardiovascular services, such as percutaneous coronary interventions and implantable cardioverter defibrillator placement, be paid on a bundled basis referred to as a comprehensive ambulatory payment classification (APC) that is similar to the diagnosis-related group payment system used for inpatient services, rather than being paid for each individual APC code. CMS finalized this proposal but delayed the implementation date to 2015, advised the ACC.

CMS deferred a proposal to cap practice expense payments for services provided in the office so that the total payment would not exceed the amount Medicare would pay for the same service in the hospital. This change would have cut the payment for a number of lower extremity revascularization services by an average of 40%.

Physician groups of 10 or more providers (including physicians, physician assistants, and nurse practitioners) will have their payment adjusted under the value-based modifier in 2016. The payment adjustments will be based on cost and quality data for patients seen during 2014, according to the ACC’s initial review of the rule.