CMS Releases Proposed 2016 Medicare Physician Fee Schedule and Hospital Outpatient Rules

Heart of Health Policy | In July, the Centers for Medicare and Medicaid Services (CMS) released the proposed 2016 Medicare Physician Fee Schedule, which addresses Medicare payment and quality provisions for physicians in 2016. Under the proposal, physicians will see a 0.5 percent payment increase on Jan. 1, 2016. Next year will be the first of several years of predictable payments resulting from the legislation that permanently repealed the Sustainable Growth Rate (SGR) this spring. CMS estimates that the physician rule will neither increase nor decrease payments to cardiologists from 2015 to 2016. This estimate is based on typical practice and can vary widely depending on the mix of services provided in a practice. CMS also released the proposed 2016 Hospital Outpatient Rule in July, which indicates a -0.1 percent payment update for hospitals. Highlights from both rules include:

Physician Fee Schedule

  • This rule does not contain proposals to implement the new appropriate use criteria (AUC) requirement for advanced imaging services i.e., single-photon emission computed-tomography (SPECT) myocardial perfusion imaging (MPI), computed tomography and mitral regurgitation that begins Jan. 1, 2017. Rather, CMS provides information on the process that the agency will employ to:
    • Create the policies for identifying which AUC will be used in the program
    • Specify minimum standards for clinical decisions support tools
    • Identify potential priority clinical areas upon which to focus CMS will continue to work with the ACC and other stakeholders through the comment period to propose policies through future rulemaking.
    CMS proposes to maintain most policies applicable to the Physician Quality Reporting System (PQRS) for the 2016 performance year. Under most individual reporting options, eligible professionals will continue to report at least nine measures across at least three domains. Failure to successfully report PQRS quality measures in 2016 will continue to result in a -2 percent payment adjustment in 2018.
  • Application of the Value-Based Payment Modifier on 2018 payments will be expanded to non-physician eligible professional solo practitioners and group practices (i.e., physician assistants, nurse practitioners and clinical nurse specialists) based on the 2016 performance period.
  • CMS seeks review of 118 services with Medicare allowed charges of $10 million or more as a prioritized subset of codes under the statutory category of "codes that account for the majority of spending under the physician fee schedule." This list includes SPECT MPI, transthoracic echocardiography, stress echocardiography, electrophysiology device monitoring services, and 3-D electrophysiology mapping.
  • CMS invites informational comments on how best to implement the Merit-based Incentive Payment System created by the Medicare Access and CHIP Reauthorization Act of 2015, legislation that fixed the SGR. The program takes effect in January 2019 and will be based upon data collected during 2017. CMS specifically requests feedback on which activities should fit the definition of clinical practice improvement and how to set a low-volume threshold to exclude eligible providers who would not have adequate data to use for payment adjustments. Additional topics and questions will be made regarding alternative payment models through future requests for information.
  • CMS is proposing a number of changes to the physician self-referral (Stark) regulations "to accommodate delivery and payment system reform, to reduce burden, and to facilitate compliance." In addition to attempting to address comments received in response to the Self-Referral Disclosure Protocol issued in 2010, CMS is particularly interested in the effects of the Stark regulations on the ability to achieve the clinical and financial integration needed for health care delivery and payment reform.
PQRS schedule

Hospital Outpatient Rule

  • CMS does not propose payment policy changes for services associated with short hospital inpatient stays of less than two midnights. It does outline changes to its existing "rare and unusual" exceptions policy to allow Part A payment on a case-by-case basis for inpatient admissions that do not satisfy the two-midnight benchmark. Additionally, CMS proposes to make use of Quality Improvement Organizations to educate doctors and hospitals about Part A payment policy for inpatient admissions. Certain restrictions on Recovery Audit Contractors' review of admitting decisions will also be implemented. These include changes to the "look-back period," limits on additional documentation requests and requirements for timely reviews.
  • CMS continues its policy to package payment for items and services that are integral, ancillary, supportive or adjunctive to a primary service. For 2016, CMS proposes to expand the list of packaged ancillary services to include Level 4 Minor Procedures such as cardiac drug stress tests and electrocardiogram monitoring and reporting up to 48 hours. CMS also proposes to package payment for two drugs (bivalirudin and abciximab) into the Ambulatory Payment Classification (APC) payment for percutaneous coronary intervention procedures.
  • For 2016, CMS proposes to implement nine new Comprehensive APCs (C-APCs), including one new C-APC for comprehensive observation services. This would provide payment for all services received during a non-surgical encounter with a high level outpatient hospital visit and eight or more hours of observation.
  • For 2017 and subsequent years, hospitals that fail to meet the requirements of the Hospital Outpatient Quality Reporting Program (OQR) will receive a 2 percent reduction to their annual fee schedule update factor. CMS also proposes to align the OQR with the Ambulatory Surgical Center Quality Reporting Program.
  • Detailed summaries of these rules are available at The College is in the process of soliciting feedback from member groups and will submit comment letters to CMS at the end of the summer.

Keywords: Cardiology Magazine, ACC Publications, Medicare, Medicaid, Centers for Medicare and Medicaid Services, U.S., Fee Schedules, Documentation, Outpatients

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