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CMS Releases Proposed Rules: 2014 Medicare Changes

On July 8, 2013, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2014 Medicare Physician Fee Schedule (MPFS) proposed rule (CMS-1600-P).

The most important changes affecting urology are outlined below:

2014 Medicare Physician Fee Schedule

Sustainable Growth Rate and Conversion Factor Changes

There is an anticipated 24.4 percent decrease in the 2014 conversion factor. Every year there is a scheduled reduction in the sustainable growth rate (SGR) system. However, for more than a decade, Congress has acted to halt the reduction. The anticipated conversion factor (CF) for 2014 is $25.7109 as compared to the current 2013 CF of $34.0230. Every year there is a budget neutrality adjustment applied to the CF. According to CMS’ calculation, there will be a 2 percent payment decrease for urology as a result of Medicare payment changes to work, practice expense, and medical liability relative values. This reduction is in addition to the 24.4 percent decrease to the CF.

The following chart illustrates physician payment changes for several urology codes in 2014 using two calculations: 1) based on the 24.4 percent reduction in the CF and 2) if Congress maintains the 2014 CF rate.

2017 MPFS Final Rule Conversion Tables Facility
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Physician Payments and Misvalued Codes

Medicare continues to focus on primary care management services with a separate payment for complex chronic care management services beginning in 2015. Medicare also proposed to pay for non-face-to-face complex chronic care management for patients who have multiple, significant chronic conditions. Two G codes have been established for these payments.

CMS also proposed changes to telehealth services, modifying the regulations describing eligible telehealth originating sites to include health professional shortage areas (HPSAs) located in rural census tracts of urban areas as determined by the Office of Rural Health Policy. CMS also is proposing the addition of transitional care management services to the list of eligible teleheath services. In addition, there are changes to the practice expense geographic adjustment to reflect local differences in practice costs using updated data and recommendations from the Medicare Economic Index Technical Advisor Panel. Every year, CMS and the American Medical Association (AMA)/Specialty Society Relative Value Update Scale Committee (RUC) identify a listing of potentially misvalued codes determined through several screens (such as Harvard valued codes, high volume, codes reported a certain percent of times together during the same patient encounter) that must be reviewed. At the recommendation of the RUC, CMS is going to make adjustments to pre-service clinical labor minutes in the facility setting for codes with 000 day global periods. Several cystourethroscopy codes were included in this change. No CPT codes were recommended in the public nomination process for potentially misvalued codes.

CMS is proposing to limit the non-facility PE RVUs for individuals codes so that the total non-facility physician fee schedule payment would not exceed the total combined amount Medicare would pay for the same code in the facility setting.

CMS has engaged the services of the RAND Corporation and the Urban Institute to build a valuation model to predict work RVUs and the individual components of work RVUs, time and intensity. The model design will be used to develop the initial work RVUs and to identify potentially misvalued procedures under current CMS and AMA RUC processes.

The proposed rule also outlines changes to the Quality Value Based Payment Modifier, Physician Compare Website, 2014 Physician Quality Reporting System (PQRS), Medicare Electronic Health Records (HER) Incentive program and E-Prescribing.

CMS also released the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Policy Changes and Payment Rates proposed rule (CMS-1601-P). The proposed rules update payment policies and payment rates for services performed in the physician setting and the hospital outpatient/ambulatory surgical center for 2014. The Medicare Physician Fee Schedule (MPFS) can be found here and all addenda including Addendum B RVUs Used in Determining Medicare Payment for 2014 is available here. The Outpatient/Ambulatory Surgical Center Fee Schedule proposed rule can be found here. Addendum AA includes the list of procedures allowed in the Ambulatory Surgical Center setting.

2014 Medicare Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems Proposed Rule

Outpatient Payment System

CMS proposed to update the OPPS market basket by 1.8 percent for calendar year 2014. CMS also proposes to package seven new categories of supporting items and services. For many services, CMS will continue to make separate payments if they are reported alone on a claim. Drugs will continue to be paid at ASP+6 percent for non-pass-through drugs and biological separately payable under the OPPS.

CMS is proposing five new measures for the Outpatient Quality Reporting Program and the removal of two measures.

Ambulatory Surgical Center Payment System

Ambulatory Surgical Center (ASC) payments are projected to be 1.4 percent under the consumer price index for all urban consumers (CPI-U). Medicare statute specifies a multifactor productivity (MFP) adjustment to the ASC annual update. The MFP adjustment is projected to be 0.5 percent, resulting in an MFP-adjusted CPI-U update of 0.9 percent for CY 2014.

Payments to ASCs that fail to meet ASC Quality Reporting Program requirements would be reduced by 2 percent.

CMS proposes to adopt four new measures for the ASC Quality Reporting Program for CY 2016 payment determination and subsequent years. This data will be collected on an online web-based tool.

The AUA is reviewing the rule and will provide a more detailed analysis of the MPFS and the Outpatient/ASC proposed rules in the coming weeks and will be preparing a response that advocates to the benefit of our members, their practices and patients. The comment period on the proposed rules will be open until September 6, 2013. CMS will respond to comments in a final rule to be issues by November 1, 2013. The proposed rules will appear in the July 19, 2013 Federal Register and can be downloaded here.