A Look at the Proposed 2014 Medicare Physician Fee Schedule

On July 8, 2013, the Centers for Medicare and Medicaid Services (CMS) released the 2014 Physician Fee Schedule proposed rule, covering payments and related policies for services provided by physicians or in the physician office setting. The ACC is currently reviewing the rule in preparation to submit comments at the end of the summer. As part of the rule, CMS is required to propose a legally mandated cut associated with the flawed Sustainable Growth Rate (SGR) formula.This year the proposed overall cut is 24 percent. Like in previous years, the ACC continues to work with Congress to avert this cut, hopefully permanently ending the formula.  In addition, CMS estimates the overall impact on physicians based on specialty. For cardiology, CMS estimates a 2 percent increase in payment between 2013 and 2014, but this change depends very much on the mix of services provided in a practice. Some of the key provisions of the physician fee schedule rule include:

Payment increase for echocardiography
The ACC and The American Society of Echocardiography (ASE) have worked through the American Medical Association RUC process to indicate that the current assumptions about the equipment used in echocardiography services do not reflect the expense involved in providing the service.  In this rule, CMS proposes to increase the payment for the practice expense of echocardiography services provided in the physician office setting.  Although CMS has not proposed to include an echocardiography room that ACC/ASE recommended, their recommended changes would increase payment for the technical component of some echocardiography services by more than 20 percent. 

Complex chronic care management services
CMS proposes to begin paying for care management of patients with complex chronic illness but not to begin paying for this service until 2015. Although there are existing (but bundled) codes for these services, CMS does not propose to use them but instead proposes use of a time-based code reported for a 90-day period of service. CMS does not propose to implement this next year because it is still considering the requirements for physicians to provide these services. Such requirements could include a specific certification for the practice in which they serve.  Although not proposed, the provision of the service could be limited to physicians in primary care specialties. These codes would also bundle in other care management and transitional care services so they could not be separately reported. 

Medicare coverage of services under FDA IDE
CMS is proposing to set standards for all covered studies pertaining to investigational device exemptions (IDEs) through the proposed rule, rather than as part of individual NCA processes or letting individual MACs make the determinations.  Based on CMS’s research, varying levels of scrutiny are given by each MAC.  These changes would apply to both devices that have not yet been approved for any use beyond the IDE and those approved for other uses but are the subject of an IDE in order to expand their approved label indication.

Ultrasound screening for abdominal aortic aneurysm
CMS is proposing to limit timing restrictions on ultrasound screening for abdominal aortic aneurysm.  The screening is now only covered in the first year of a beneficiary’s participation in Medicare Part B.  CMS proposes that the service be covered at any time.

Physician Compare
CMS proposes further expansion of the Physician Compare public reporting website. The site currently lists demographic information and indicates whether physicians participated in certain quality programs such as the Physician Quality Reporting System (PQRS) or electronic prescribing. CMS proposes to expand public reporting performance data from a very limited base of large groups to one that reports on all groups that participate in PQRS via the group practice reporting option.  Measures reported will include those that cover hypertension, heart failure and coronary artery disease. 

Physician Quality Reporting System
In 2013, a physician will earn a 0.5 percent bonus for reporting successfully on three PQRS measures.  For 2014, CMS proposes to increase the requirement to successful reporting on nine measures covering three of the six domains of the National Quality Strategy. Domains include efficiency, safety and effectiveness. This requirement would apply regardless if measures are reported via claims, registry or electronic health record (EHR). CMS proposes to equalize the successful reporting levels for claims and registry so that 50 percent of eligible patients must be reported regardless of the method. 

PQRS is transitioning from a bonus to a penalty system. In this rule, CMS proposes to establish the same criteria for a bonus and a penalty. This means that physicians who do not report successfully in 2014 will receive a 2 percent penalty in 2016. 

Physician Quality Reporting Measure Groups
CMS proposes to eliminate the opportunity to report on PQRS measures groups via claims. Measures groups are multiple measures reported on patients with the same condition. Reporting of individual measures through claims would still be allowed under this proposal. 

Registry participation as participation in PQRS
The American Taxpayer Relief Act of 2012 passed at the end of 2012 required CMS to implement a policy by which successful participants in clinical registries would also be considered successful participants in PQRS. In this rule, CMS proposes an implementation strategy. Generally, requirements of these new registry programs would be similar to existing registry programs but with a couple of important differences. First, registries may be able to report on measures not currently approved for PQRS use, which may allow more physicians to participate.  Second, registries would be required to publicly report on participants. Third, registries would need to include outcomes measures.  Once these proposals are finalized in the fall, the ACC registries will determine if they will be able to offer additional services to PQRS participants. Currently, the ACC offers opportunities to participate in PQRS through the PINNACLE Registry® that connects to electronic medical records as well as the web-based PQRI Wizard.  CMS also proposes that participation in such a registry would count as the clinical quality module element of the EHR “meaningful use” requirements if the data originates from an EHR and other criteria are met.

PQRS measures: Additions
CMS proposes to add the following PQRS measures:

  • Improvement in blood pressure for patients with hypertension

  • Functional status assessment for heart failure patients

  • Optimizing patient exposure to ionizing radiation for CT and nuclear medicine

  • Rate of death following carotid stenting and endarterectomy

  • ICD complications

PQRS Measures: Deletions
CMS proposes to delete the following PQRS measures:

  • High blood pressure control for patients with diabetes

  • Warfarin therapy for patients atrial fibrillation

  • Ischemic vascular disease – blood pressure management

  • Blood pressure measurement for hypertension

  • Management of blood pressure for hypertension

  • Smoking and tobacco use cessation

  • Blood pressure at goal

  • LDL lipids at goal

  • Timing of lipid testing in compliance with guidelines

Value-based purchasing:
CMS has proposed a number of changes to the physician value-based purchasing program that is being implemented starting in 2015. Because of data lag issues, performance from two years prior will determine the adjustment for the years starting in 2015. This means that the proposals for 2014 determine payment adjustments for 2016.  CMS proposes to dramatically increase the number of physicians to which payment adjustment will apply. In 2015, only physicians in groups of 100 or more will be eligible for payment adjustment.  CMS proposes to increase this to physicians in groups of 10 or more, which would cover more than 60 percent of physicians. 

CMS also proposes to make participation in a payment adjustment mandatory, rather than a voluntary opt-in as in 2015. However, CMS also proposes that physicians in groups of 10-99 not be eligible for a penalty, only for a bonus if their performance is superior to others. 

Additionally, CMS proposes to increase the maximum level of penalty from 1 percent to 2 percent. 
CMS also proposes an important change in the way that expected costs are determined. In 2015, physician resource use is compared among all physicians with a risk adjustment. For 2016, CMS proposes to compare physicians in the same specialty to account for the different mix of patients seen by specialists, acknowledging that risk adjustment does not address all issues that are present. 

For 2015, physicians have to participate in PQRS as a group to be eligible for a payment adjustment.  For 2016, CMS proposes that groups can participate in PQRS as individuals as long as 70 percent of eligible physicians participate. 

Keywords: Endarterectomy, Coronary Artery Disease, Value-Based Purchasing, Radiation, Ionizing, Tobacco Use Cessation, Centers for Medicare and Medicaid Services, U.S., Smoking, Nuclear Medicine, Risk Adjustment, Electronic Health Records, Heart Failure, Atrial Fibrillation, Fee Schedules, Electronic Prescribing, Aortic Aneurysm, Abdominal, Hypertension, Diabetes Mellitus, Primary Health Care, Group Practice, Echocardiography

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