Yesterday we wrote about the highlights from the final payment policies and payment rates published on October 31. 2014 for services furnished under the Medicare Physician Fee Schedule (PFS) by CMS on or after Jan. 1, 2015. Here is more detail on some of the Key Provisions of the rule. Additional provisions will be covered in tomorrow’s blog. Sustainable Growth Rate (SGR) The Protecting Access to Medicare Act of 2014 provides for a zero percent PFS update for services furnished between January 1, 2015 and March 31, 2015. Current law requires physician fee schedule rates to be reduced by an average of 21.2 percent from the CY 2014 rates. In most prior years, Congress has taken action to avert a large reduction in PFS rates before they went into effect. The Administration supports legislation to permanently change SGR to provide more stability for Medicare beneficiaries and providers while promoting efficient, high quality care. Primary care and chronic care management Medicare continues to emphasize primary care by making payment for chronic care management (CCM) services - non-face-to-face services to Medicare beneficiaries who have multiple, significant, chronic conditions (two or more) - beginning in 2015. Chronic care management services include regular development and revision of a plan of care, communication with other treating health professionals, and medication management. CMS has established a payment rate of $40.39 for CCM that can be billed up to once per month per qualified patient. CMS is finalizing its proposal to allow greater flexibility in the supervision of clinical staff providing CCM services. The proposed application of the "incident to" supervision rules were widely supported by the commenters. Payment for CCM is only one part of a multi-faceted CMS initiative to improve Medicare beneficiaries' access to primary care. Models being tested through the Innovation Center will continue to explore other primary care innovations. Finally, CMS proposed standards for electronic health records (EHR) - specifically, a 2014-certified EHR. In response to public comments indicating that very few practices have adopted a 2014-certified EHR at this time, CMS will require the version of the certified EHR that is in use on December 31 of the prior calendar year for the EHR Incentive Programs to bill for CCM services. Enhanced transparency in setting PFS rates Since the beginning of the physician fee schedule in 1992, CMS adopted rates for new and revised codes for the following calendar year in the final rule on an interim basis subject to public comment. This policy was necessary because CMS did not receive the codes in time to include in the PFS proposed rule. Until recently, the only services that were affected by this policy were services with new and revised codes. In recent years, CMS began receiving new and revised codes and revaluing existing services under the misvalued codes initiative. Establishing payment in the final rule for misvalued codes often led to implementation of payment reductions before the public had the opportunity to comment. CMS proposed to change the process for valuing new, revised and potentially misvalued codes for CY 2016, so that payment for the vast majority of these codes goes through notice and comment rulemaking prior to being adopted. CMS proposed to adopt the new process for 2016 so that the AMA's CPT Editorial Panel has sufficient time to change its schedule for providing us with codes and recommendations earlier in the year. CMS is finalizing this proposal with a transition in CY 2016 and full implementation in CY 2017. CMS made several adjustments in the policy to minimize the need for Medicare-specific G-codes. Potentially misvalued services Consistent with amendments to the Affordable Care Act, CMS has been engaged in a vigorous effort over the past several years to identify and review potentially misvalued codes, and to make adjustments where appropriate. Below are major misvalued code decisions for 2015: * Hip and Knee Replacements: In the CY 2014 PFS final rule, CMS adopted code and valuation changes that reduced payment for hip and knee replacements. The final payments were higher than recommended by the AMA/Specialty Society Relative Value Update Committee (RUC). While CMS indicated that it would consider further changes, the agency decided further reductions were not warranted after considering the public comments. * Radiation Therapy and Gastroenterology: Consistent with the final rule policy and in response to public comments, CMS is not adopting code changes for gastroenterology and radiation therapy services until they can go through notice and comment rule making to propose values for 2016. As a result of this decision, CMS will not recognize some new CPT codes, and will create G-codes in place of CPT codes to continue current payment rates for CY 2015. * Radiation Therapy: CMS proposed to refine the way it accounts for the infrastructure costs associated with radiation therapy equipment, specifically to remove the radiation treatment vault as a direct expense when valuing radiation therapy services. After considering public comments, the agency decided not to finalize this proposal but will reconsider whether the vault is a direct or indirect cost through rulemaking in a future year. * Epidural Pain Injections: CMS reduced payment for these services in 2014 under the misvalued code initiative. In response to concerns from pain physicians regarding the accuracy of the valuation, CMS proposed to raise the values in 2015 based on their prior resource inputs before adopting further changes after considering RUC recommendations. However, because the inputs for these services included those related to image guidance, we proposed to prohibit separate billing for image guidance for CY 2015. CMS finalized the policy as proposed to avoid duplicate payment for image guidance. The agency has asked the RUC to further review this issue and make recommendations to us on how to value epidural pain injections. * Film to Digital Substitution: CMS finalized its proposal to update the agency's practice expense inputs for X-ray services to reflect that X-rays are currently done digitally rather than with analog film. The final rule can be viewed here. Please be aware that this link will change once the rule is published on Nov. 13, 2014 in the Federal Register.