CMS Releases Proposed Medicare Payment Rules for 2017

• August 8, 2016
• Clinical Practice Updates

The Centers for Medicare and Medicaid Services (CMS) has issued two proposed rules to update payment policies and payment rates for services furnished under the Medicare Physician Fee Schedule (PFS) and the Hospital Outpatient Prospective Payment System (OPPS). CMS will be accepting comments on these rules until September 6, 2016. The final rules are expected by November 1st and will be effective Jan. 1, 2017. Here are the highlights:
Payment Policy Changes
The CY 2017 PFS conversion factor is estimated to be $35.7751. Changes in payment policy outlined in the proposed rule result in the overall average impact for the following specialties:
• Hematology/Oncology: +2%
• Radiation Oncology: 0%
• Radiation Therapy Centers: -1%
• Urology: -1%
• Rheumatology: 2%
• Gastroenterology: -1%
• Diagnostic Testing Facility: -2%
• Independent Lab: -5%
• Ophthalmology: -2%
Potentially Misvalued Codes
The Affordable Care Act requires the Secretary to periodically identify potentially misvalued services and to review and make appropriate adjustments to the relative values for those services. Through the Achieving a Better Life Experience (ABLE) Act of 2014, Congress set a target for adjustments to misvalued codes in the fee schedule for 2016, 2017, and 2018. The target will be 0.5 percent for 2017 and 2018.
In the proposed rule, CMS has proposed misvalued code changes that would achieve 0.51 percent in net expenditure reductions. If finalized, these changes would meet the misvalued code target of 0.5 percent, therefore avoiding a broad overall reduction to PFS services.

Medicare Telehealth Services
CMS is proposing to add several codes to the list of services eligible to be furnished via telehealth. These include:
• End-stage renal disease (ESRD) related services for dialysis;
• Advance care planning services;
• Critical care consultations furnished via telehealth using new Medicare G-codes.
CMS is also proposing payment policies related to the use of new place of service code specifically designed to report services furnished via telehealth.

Payment for Mammography Services
CMS is proposing to implement new CPT coding for mammography services. The coding revision reflects use of current technology used in furnishing these services, including a transition from film to digital imaging equipment and elimination of separate coding for computer aided detection services. CMS is proposing to maintain current valuation for the technical component of mammography services in order to implement coding and payment changes over several years.

Updated Geographic Practice Cost Indices (GPCI) for CY 2017
As required by the Medicare law, CMS adjusts payments under the PFS to reflect local differences in practice costs using GPCIs for each component of PFS payment—physician work, practice expense, and professional liability insurance. Consistent with the law, CMS is proposing new GPCIs using updated data to be phased in over CY 2017 and CY 2018.
California Localities
The Protecting Access to Medicare Act of 2014 requires that, beginning in CY 2017, CMS use new locality definitions for California based on a combination of Metropolitan Statistical Areas as defined by the Office of Management and Budget and the current locality structure. The California locality provision is not budget-neutral, meaning that payments to physicians in California will increase in the aggregate without across-the-board reductions in physician services elsewhere.
The movement to the new locality structure in California may increase payment to many physicians in urban parts of California without any reductions in specified counties that the law “holds harmless” from payment reductions. In a few areas of California, the new locality structure may decrease Medicare PFS payments.
0-day Global Services Typically Billed with an E/M Service with Modifier 25
CMS has noted that several high volume procedure codes are typically reported with a modifier that unbundles payment for visits from the procedure, even though the modifier should only be used for reporting services beyond those usually provided. As a result, CMS is proposing to prioritize 83 services for review as potentially misvalued.

Improving Payment Accuracy for Primary Care, Care Management, and Patient-Centered Services
CMS is proposing several revisions to the PFS billing code set to more accurately recognize the work of primary care and other cognitive specialties to accommodate the changing needs of the Medicare patient population.

Program Integrity and Data Transparency in Medicare Advantage
CMS is proposing to require that health care providers and suppliers be screened and enrolled in Medicare in order to contract with Medicare Advantage health plans to provide Medicare-covered items and services to beneficiaries enrolled in Medicare Advantage. CMS is also proposing to increase transparency of Medicare Advantage pricing data and Medical Loss Ratio data from Medicare health and drug plans.
In the proposed rule, CMS outlines the initial component of the program and its plan for full implementation. Specifically, CMS proposes a clarifying definition for AUC and a definition for provider-led entity (for the purposes of AUC development). CMS also proposes to identify priority clinical areas of AUC that will be used in identifying outlier ordering professionals.

Appropriate Use Criteria for Advanced Diagnostic Imaging Services
The Protecting Access to Medicare Act of 2014 established a new program to promote the use of appropriate use criteria (AUC) for advanced diagnostic imaging services under fee for service Medicare. This year’s proposed rule focuses on the second of four components of the Medicare AUC program and includes proposals for priority clinical areas, clinical decision support mechanism (CDSM) requirements, the CDSM application process, and exceptions for ordering professionals for whom consultation with AUC would pose a significant hardship. CMS has indicated in this proposed rule that the third component of the program (when ordering professionals must begin consulting CDSMs and furnishing professionals must append AUC related information to the Medicare claim) will not begin earlier than January 1, 2018.
2017 Medicare Hospital Outpatient Prospective Payment System Proposed Rule
The OPPS proposed rule includes implementation of a site neutral payment policy in any new or acquired off-campus hospital outpatient department (HOPDs) as required by the Bipartisan Budget Act of 2015. CMS determines that new or acquired HOPDs will be paid under the Physician Fee Schedule in 2017. The proposed rule does not allow existing HOPDs to relocate or expand services and retain their “excepted status”. The rule does permit change of ownership if the new owner accepts the existing Medicare provider agreement from the prior owner.

The US Oncology Network will submit comments on both proposed rules prior to the respective deadlines.
To view the CMS fact sheet on the PFS proposed rule, CLICK HERE

To view the proposed rule in its entirety, CLICK HERE
To view the CMS fact sheet on the OPPS proposed rule, CLICK HERE
To view the proposed rule in its entirety, CLICK HERE