Revisions to Payment Policies in 2015 Physician Fee Schedule

July 10, 2014
Rachel V. Rose, JD, MBA
Rachel V. Rose, JD, MBA

Rachel V. Rose, JD, MBA, advises clients on compliance and transactions in healthcare, cybersecurity, corporate and securities law, while representing plaintiffs in False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rachel can be reached through her website, www.rvrose.com.

Proposed changes to the Physician Fee Schedule for 2015 will affect calculation of payment rates and potentially misvalued codes.

Physicians and the rest of the public have until 5 p.m. on Sept. 2, 2014 to comment on Part B changes to the Physician Fee Schedule for calendar year 2015. The purpose of the proposed rule would "revise payment policies under the Medicare Physician Fee Schedule (PFS) and make other policy changes related to Medicare Part B payment." While geographic considerations have historically been a consideration in reimbursement rates and will continue to be included, three other relative value units (RVUs) that are also considered are work, practice experience and malpractice expense. Therefore, when looking at the varying payment rates to physicians, these factors provide a great deal of insight into the variance.

Other areas of reimbursement that are addressed in this proposed rule include: telehealth services, chronic-care management services, value-based medicine/physician feedback program, and updating the Physician Compare website, Physician Quality Reporting System, Medicare Shared Savings Program, and the Electronic Health Record Incentive Program.

The Protecting Access to Medicare Act of 2014 (Pub. L. 113-93 (Apr. 1, 2014)) (PAMA) is referenced in relation to changes to the SGR formula. One critical area to keep an eye on is section 220 of the PAMA. This section amended section 1848(c)(2) of the Social Security Act by adding subparagraph (M). For physicians, this means that additional information may be collected related to the direct or indirect furnishing of services. A consideration for providers is how to allocate back-office resources to handle these requests. This section also authorizes HHS "to pay eligible professionals for submitting solicited information." The caveat is that the amount is not stipulated.

Another facet of the proposed rule relates to procedures that can either be performed in a physician's office (non-facility) or in a hospital or other facility setting (facility). Medicare makes a separate payment to the facility for its costs in furnishing the services; therefore, the Practice Expense (PE) RVUs are generally lower. The methodology for calculating the PE RVU is found in 74 Fed. Reg. 61745-61746. Physicians should balance the cost of performing the procedure, as well as the reimbursement for where the service is performed.

Physicians should also pay particular attention to pages 78-79 because of the list of "Proposed Potentially Misvalued Codes Identified Through High Expenditure Specialty Screen." One of the most notable items on the list is epidural injections, which is common in a variety of specialties. In sum, there are a lot of changes on the table and physicians should be aware of how these nuances may impact the bottom line of their practice and/or accountable care organization.

CMS: Physician Fee Schedule proposed rule for CY 2015.

OFR: Revisions to Payment Policies under the Physician Fee Schedule for CY 2015.