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CMS Releases Proposed Rule for the 2017 Physician Fee Schedule

If finalized, the proposed rule would reduce several relative values for urology services.

On July 7, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that updates payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) for calendar year (CY) 2017. In the rule, CMS puts forth several new proposals that would lower relative values for a number of urology services. In addition, CMS proposes to modify the Medicare Shared Savings Program quality measures set to align with the new Quality Payment Program, implement new provider enrollment requirements for Medicare Advantage, and create new Appropriate Use Criteria for advanced diagnostic imaging services.

Conversion Factor

For 2017, CMS estimates the conversion factor (CF) to be 35.7751 down from the current CF of 35.8043. The estimated CF for 2017 reflects a budget neutrality adjustment of -0.51, the 0.5 percent update factor specified by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), and a 5 percent adjustment due to the non-budget neutral MPPR for the professional component of imaging services.

Estimated Impact of Medicare Expenditures for Urology Services

For 2017, CMS estimates the overall impact on payment rates for urology services based on physician work, practice expense and malpractice relative value units (RVU) changes to be -1 percent (Table 43). However, the actual impact of total Medicare revenues on an individual urology practice will differ based on annual changes in RVUs, patient volume and mix of services, sequestration and any other penalties imposed from Meaningful Use and the Physician Quality Reporting Program (PQRS). CMS proposed reductions to the 2017 physician work, practice expense and professional malpractice insurance RVUs for laparoscopic prostatectomy (CPT code 55866) and cystoscopy (CPT code 52000). View the conversion tables to learn more about how the proposed rule policies will affect reimbursement rates for the most frequently performed urology services.

CY 2017 Identification and Review of Potentially Misvalued Services

Section 3134(a) of the Affordable Care Act requires the Secretary of Health and Human Services to periodically identify potentially misvalued services and to review and make appropriate adjustments to the relative values for those services. Under the Achieving a Better Life Experience Act of 2014 (ABLE), Congress set a target for adjustments to misvalued codes in the fee schedule for 2016, 2017, and 2018. The target was one percent for 2016, and will be 0.5 percent for 2017 and 2018. If the net reductions in misvalued codes in 2017 are less than 0.5 percent of the total revenue under the fee schedule, a reduction equal to the percentage difference between 0.5 percent and the percent of expenditures represented by misvalued codes reductions must be made to all PFS services. In the proposed rule, CMS has identified 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.

0-day Global Services that are Typically Billed with an Evaluation and Management (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. Therefore, CMS believes the services may be misvalued. As a result, CMS is proposing to prioritize 83 services for review as potentially misvalued, which include the following urology services:

  • 51701 Insertion of temporary bladder catheter
  • 51702 Insertion of indwelling bladder catheter
  • 51703 Insertion of indwelling bladder catheter

Collecting Data on Resources Used in Furnishing Global Services

Under the misvalued code initiative in the CY 2015 final rule, CMS finalized a policy to transform all 10- and 90-day global codes to 0-day global codes by 2017 and 2018, respectively. Under this policy, CMS would have valued the surgery or procedure to include all services furnished on the day of surgery and paid separately for visits and services furnished after the day of the procedure. Subsequently, MACRA Section 523 prohibited CMS from implementing this policy, due to the collective advocacy efforts of the AUA, the American College of Surgeons, Alliance of Specialty Medicine and other medical societies.

There was also Congressional opposition to this proposal from CMS and the delay of the transition of 10- and 90-day globals. The AUA participated in a preliminary meeting with the RAND Corporation, commissioned by CMS, to collect data on urology codes. Instead, MACRA requires the agency to gather data on visits in the post-surgical period that could be used to accurately value these services. To fulfill this requirement, CMS proposes to collect data for 4,200 codes with a 10- or 90-day global period, using a three-pronged approach that will include a 1) Comprehensive claims-based reporting about the number and level of pre- and post-operative visits, 2) a survey of a representative sample of practitioners about the activities and resources used in providing a number of pre- and post-operative visits during a specified, and 3) a more in-depth study, including direct observation of the pre- and post-operative care delivered in a small number of sites.

Valuation of Specific Codes

CMS intends to maintain the interim final work RVU of 21.36 for Laparoscopic Radical Prostatectomy (CPT code 55866). In the 2016 Medicare Physician Fee Schedule final rule, CMS reduced the work RVU for CPT 55866 from 32.06 to 21.36, representing a 33 percent cut to be phased in over a two year period. Instead of accepting the 26.80 work RVU recommended by the AMA Relative Value Scale Update Committee (RUC), CMS adopted the 21.36 interim work RVU based on an independent analysis of the robotic procedure compared to an open prostatectomy (55840). In March, representatives of the AUA and LUGPA met with a multi-specialty Refinement Panel to discuss CMS' decision, the difference in a prostatectomy using a robotic versus an open technique, and presented new data to support the RUC-recommended work RVU. CMS notes in the rule that it is interested in the results of the study urology mentioned at the refinement panel and will consider incorporating this data into the valuation of this code, including, if appropriate, adjustments to the work times used in physician fee schedule rate-setting. View the full report on the AUA's advocacy efforts with the Refinement Panel.

Cystourethroscopy (CPT code 52000)

In the CY 2016 PFS final rule with comment period, CMS identified CPT code 52000 as potentially misvalued through a screen of high expenditure services per specialty. The RUC recently reviewed this code and despite the RUC-recommended work RVU of 1.75, CMS is proposing a work RVU of 1.53 based on a crosswalk to CPT code 58100 (Endometrial sampling (biopsy) with or without endocervical sampling (biopsy), without cervical dilation, any method (separate procedure)), which also has a work RVU of 1.53.

Biopsy of Prostate (CPT code 55700)

CMS also identified CPT code 55700 as potentially misvalued based on the same high expenditure screen. The physician work and practice expense for this code also were recently reviewed by the RUC. Instead of accepting the RUC-recommended work RVU of 2.50, CMS is proposing a work RVU of 2.06 based on a crosswalk to CPT code 69801 (Labyrinthotomy, with perfusion of vestibuloactive drug(s), transcanal). CMS states in the rule that the RUC overestimates the work involved in prostate biopsy given that the total service time; specifically, the reduction in pre- and post-service times.

Electromyography Studies (CPT code 51784)

CPT code 51784 also was identified as a high expenditure services, which includes CPT code CPT code 51785 (Needle electromyography studies (EMG) of anal or urethral sphincter, any technique). Both codes have 0-day global periods. Although CMS accepted the RUC-recommended work RVU of 0.75 for CPT code 51784, CMS is proposing to change the global period from 0-day to no global period for both codes. In addition, CMS proposes to add 51785 to the list of potentially misvalued codes.

The AUA presented survey data to the RUC in April of 2015 and January of 2016 on the following codes. CMS accepted the RUC recommendations on nine of the twelve codes presented. CMS did not accept the RUC recommendations for 52000 and 55700. In addition, CMS did not accept the Refinement Panel recommendation for CPT code 55866 of 26.80 work RVUs. CMS maintained the interim work value of 21.36. The AUA will continue to advocate for our members to change CMS' final determination.

CPT CodeDescriptorCurrent work RVURUC work RVUCMS work RVUCMS time refinement
51700 Bladder irrigation, simple, lavage and/or instillation 0.88 0.60 0.60 No
51701 Insertion of non-indwelling bladder catheter (eg, straight catheterization for residual urine) 0.50 0.50 0.50 No
51702 Insertion of temporary indwelling bladder catheter; simple (eg, Foley) 0.50 0.50 0.50 No
51703 Insertion of temporary indwelling bladder catheter; complicated (eg, altered anatomy, fractured catheter/balloon) 1.47 1.47 1.47 No
51720 Bladder instillation of anticarcinogenic agent (including retention time) 1.50 0.87 0.87 No
51784 Electromyography studies (EMG) of anal or urethral sphincter, other than needle, any technique 1.53 0.75 0.75 No
52000 Cystourethroscopy (separate procedure) 2.23 1.75 1.53 No
55700 Biopsy, prostate; needle or punch, single or multiple, any approach 2.58 2.50 2.06 No
55866 Laparoscopy, surgical prostatectomy, retropubic radical, including nerve sparing, includes robotic assistance, when performed 21.36   21.36 No
64566 Posterior tibial neurostimulation, percutaneous needle electrode, single treatment, includes programming 0.60 0.60 0.60  
95971 Electronic analysis of implanted neurostimulator pulse generator system (eg, rate, pulse amplitude, pulse duration, configuration of wave form, battery status, electrode selectability, output modulation, cycling, impedance and patient compliance measurements); simple spinal cord, or peripheral (ie, peripheral nerve, sacral nerve, neuromuscular) neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming 0.78 0.78 0.78  
95972 Electronic analysis of implanted neurostimulator pulse generator system (eg, rate, pulse amplitude, pulse duration, configuration of wave form, battery status, electrode selectability, output modulation, cycling, impedance and patient compliance measurements); complex spinal cord, or peripheral (ie, peripheral nerve, sacral nerve, neuromuscular) (except cranial nerve) neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming 0.80 0.80 0.80  

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. In conjunction with this proposed update, CMS is proposing to revise the methodology used to calculate GPCIs in the U.S. territories for consistency among the Pacific and Caribbean islands. This proposed revision would increase overall PFS payments in Puerto Rico.

California Localities

The Protecting Access to Medicare Act of 2014 (PAMA) 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.

Medicare Telehealth Services

End-Stage Renal Disease (ESRD) and Advanced Care Planning: CMS is proposing to add several codes to the list of services eligible to be furnished via telehealth and new payment policies related to the use of new place of service codes specifically designed to report telehealth services. These include the following services:

  • Advance care planning services;
  • Critical care consultations furnished via telehealth using new Medicare G-codes; and
  • End-stage renal disease (ESRD) related services for dialysis.

Medicare Advantage Provider and Supplier Enrollment

The proposed regulations would require health care providers and suppliers to be screened and enrolled in Medicare in order to contract with a Medicare Advantage organization to provide Medicare-covered items and services to beneficiaries enrolled in Medicare Advantage health plans.

Medicare Advantage Data Transparency

CMS is proposing to release two new sets of data related to plan participation in Medicare Advantage and the Part D prescription drug program. CMS hopes that making this data publicly available will assist public research that will support future policymaking efforts in the Medicare program and provide valuable information to beneficiaries in making enrollment decisions.

Appropriate Use Criteria for Advanced Imaging Services

This year's proposed rule focuses on the next component of the Medicare appropriate use criteria (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. CDSMs are the electronic tools through which a clinician consults AUC to determine the level of clinical appropriateness for an advanced diagnostic imaging service for that particular patient's clinical scenario. 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.

Medicare Shared Savings Program

The CY 2017 PFS proposed rule includes the following proposed policies specific to certain sections of the Shared Savings Program regulations:

  • Updates to ACO quality reporting, including changes to the quality measure set and the quality validation audit, revisions to terminology used in quality assessment, revisions that would permit eligible professionals in ACOs to report quality apart from the ACO, and updates to align with the Physician Quality Reporting System and the proposed Quality Payment Program;
  • Modifications to the assignment algorithm to align beneficiaries to an ACO when a beneficiary has designated an ACO professional as responsible for their overall care;
  • Establishing beneficiary protection policies related to use of the SNF 3-day waiver; and,
  • Technical changes to certain rules related to merged and acquired TINs and for reconciliation of ACOs that fall below 5,000 beneficiaries, and other program refinements.

Value-Based Payment Modifier and Physician Feedback Program

CMS is proposing to update the Value-Based Payment Modifier (VM) informal review policies due to increased volume and complexity of issues, inconsistency of available PQRS data to calculate the quality composite for a Tax Identification Number (TIN), the case-by-case nature of the informal review process, and the condensed timeline to calculate an accurate VM upward payment adjustment factor.

Physician Self-Referral Updates

In this proposed rule, CMS is re-proposing certain requirements for arrangements involving the rental of office space or equipment. Specifically, the proposal would limit the general rule by prohibiting per-unit of service rental charges where the lessor generates the payment from the lessee through a referral to the lessee for a service to be provided in the rented office space or using the rented equipment. Thus, per-unit of service rental charges for the rental of office space or equipment would be permissible, but only in those instances where the referral for the service to be provided in the rented office space or using the rented equipment did not come from the lessor.

CMS will accept comments on the proposed rule until September 6, 2016, and will respond to comments in a final rule. The proposed rule will appear in the July 15, 2016, Federal Register and can be downloaded from the Federal Register at: www.federalregister.gov/public-inspection. The AUA will further analyze the proposed rule and prepare formal comments. If you have questions about the proposed payment rates or policy changes, please contact the AUA at R&R@AUAnet.org.