Medicare fee schedule’s big pay cut probably temporary – big PQRS change likely permanent

January 3rd, 2014 - Scott Kraft
Categories:   Billing   Medicare Physician Fee Schedule (MPFSDB)  
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CMS released Medicare’s 2014 Final Physician Fee Schedule rule on Thanksgiving Eve, delayed from its usual November 1 release by the government shutdown earlier this fall.

Fee schedule followers won’t be surprised to see CMS finalize a 20.1% average cut to payments next year, slashing the conversion factor down to $27.2006 in 2014. Expect Congress to step in and fix that. While there have been rumblings of a permanent fix to the payment formula, the more time that passes without one makes it more likely you’ll see a temporary fix.

Here are the other changes finalized by CMS for 2014:
  • Tougher PQRS reporting: Most PQRS reporting options will now require you to successfully report on 9 different measures, up from the current 3. Those measures will have to come from 3 different measures groups, when possible. If it’s not possible to report 9, report as many as you can from 1-8. You’ll only need to be successful on 50% of your eligible patients, down from the current 80%. This change applies to claims-based, registry-based and group reporting options.
  • New GPCIs: CMS will phase-in updated GPCIs based on new data over the next two years. The main impacts of the change is that payments in some localities will increase or decrease by 1%-2%, regardless of other fee schedule changes. Other GPCI changes of note – the 1.0 work GPCI will expire on Dec. 31, unless salvaged by Congress. Alaska will keep its minimum 1.5 work GPCI and Montana, Nevada, North Dakota, South Dakota and Wyoming will keep 1.0 minimum practice expense GPCIs.
  • Payment formula shift: As a result of tweaks to the data used to calculate your payments, approximately 50% of the 2014 payment will be based on the physician work RVU, an upward shift of about 3 percentage points. Practice expense will go down the same amount, and malpractice will make up just under 5% of the average payment.
  • Misvalued codes: Payments for about 200 services, some very commonly billed laparoscopic procedures, will change next year because CMS believes the RVUs were misvalued. These changes are interim final changes that the agency will accept comments on until January 27, 2014. See page 313 in the attached fee schedule for a complete list of codes with the new RVUs. While the payment amounts aren’t listed, a lower RVU is evidence that the price will fall and a higher RVU is evidence it will increase.
  • Chronic care management payment: CMS will begin making payment to physicians for a chronic care management service, but these payments will not start until 2015. Payment will be made for chronic care management for 12 months or until the death of the patient, when the patient has multiple chronic conditions. The agency says it will develop more specific standards for when these services may be billed
  • Physician pay cap not finalized: A controversial proposal to cap physician office service payments at no more than what CMS pays for the service in an ASC or outpatient setting was not finalized.


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