Payment Provisions: 2016 Medicare Physician Fee Schedule

In late October, the Centers for Medicare & Medicaid Services (CMS) issued the 2016 Medicare Physician Fee Schedule Final Rule updating payment policies, payment rates, and quality provisions for Medicare services furnished on or after January 1, 2016. The ruling covers a wide range of topics including a number of new policies, payment provisions as well as several quality provisions including updates to the Physician Quality Reporting System (PQRS) and the Physician Value-Based Payment Modifier (Value Modifier).

In this post, we will examine various payment provisions introduced by the new ruling. 

  • Conversion Factor - The final Conversion Factor (CF) for CY 2016 is $35.8279, about a 0.29% drop from the current CF of $35.9335. 
  • Misvalued Code Changes for Radiation Therapy - CMS is not finalizing the proposal to implement the new code set for payment of radiation therapy treatment under the PFS and will continue work to address the radiation therapy codes and pricing in future years.  However, CMS is finalizing the proposed change in the utilization rate assumption used to determine the per minute cost of the capital equipment used for radiation therapy. Final assumptions adopted in this final rule are that the equipment is generally used for 35 hours per week (a 70 percent utilization rate) instead of 25 hours per week (a 50 percent utilization rate). CMS will implement this change over two years.  
  • Implementation of the Statutory Phase-In of Significant RVU Reductions- CMS is finalizing the proposal to phase in PAMA mandated reductions by reducing the value for a service by the maximum allowed amount (19 percent) in the first year, and to phase in of the percent remainder of the reduction in the second year.  CMS believes that this approach avoids differential treatment among related codes that would occur due to the 20 percent phase-in cutoff.
  • Misvalued Code Changes for Lower GI Endoscopy Services - CMS is finalizing implementation of the revised set of codes, including the revised values. After considering public comments received on the proposed values, CMS is finalizing payment rates more closely tied to the RUC recommended values.
  • Improving Payment Accuracy for Primary Care and Care Management Services - In the proposed rule published in July, CMS requested comments on how to simplify rules for billing, comments on accuracy of payments, recommendations on new add-on codes, and suggestions for potential new codes for collaborative care. However, in the Final Rule, CMS deferred taking any action on any of these four items.
  • RHC and FQHC Payments for Chronic Care Management - RHCs and FQHCs will be paid at the MPFS national average non-facility payment rate for CCM.  An RHC or FQHC must satisfy the same requirements as other providers to bill for CCM, including written patient consent and use of a certified electronic health record. The clinical staff providing the non-face-to-face care management services must be directly supervised by a physician or non-physician practitioner.
  • “Incident-to” Policy - CMS will revise the "incident-to" regulatory language to reflect that the physician (or other practitioner) supervising the auxiliary personnel need not be the same physician (or other practitioner) treating the patient. CMS will also add clarifying language specifying that only the physician or other practitioner under whose supervision the incident to service(s) are being provided is permitted to bill the Medicare program for the incident to services. In addition, CMS will amend the definition of auxiliary personnel permitted to provide "incident to" services to exclude individuals who have been excluded from the Medicare program or have had their Medicare enrollment revoked.

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