Medicare to boost physician payments for complex care management

A proposed rule issued July 8 by the Centers for Medicare & Medicaid Services (CMS) would update payment policies and payment rates for services furnished under the Medicare Physician Fee Schedule (PFS) at the start of 2014. Currently, Medicare only pays for primary care management services as part of a face-to-face visit.  Under the proposed rule, CMS would make a separate payment to physicians for managing select Medicare patients’ care needs beginning in 2015.

The proposed rule will appear July 19 in the Federal Register. CMS will accept comments on the proposed rule until Sept. 6, and will respond to them in a final rule with comment period to be issued on or about Nov. 1.

CMS noted that PFS pays for physicians' services furnished to patients covered under Medicare Part B. Payment is based on a relative value unit (RVU) calculation that reflects the amount of work involved, practice overhead expenses, associated malpractice expenses and a geographic adjustment factor. The agency added, "The proposed rule does not include any provisions on the physician fee schedule update or [Sustainable Growth Rate formula] as those calculations are determined under a prescriptive statutory formula that cannot be changed by CMS."

The proposed PFS rule includes the following provisions for calendar year 2014:

Primary care and complex chronic care management -- CMS proposes to pay for non-face-to-face complex chronic care management services for Medicare beneficiaries who have multiple, significant chronic conditions (two or more). Complex chronic care management services include regular physician development and revision of a plan of care, communication with other treating health professionals, and medication management.

Medicare will make separate payment to physicians through two G-codes for establishing a plan of care and furnishing care management over 90-day periods. To be eligible for these services, the rule proposes that beneficiaries also must have had an Annual Wellness Visit (or an Initial Preventive Physical Examination, if applicable) -- as such a visit can serve as an important foundation for establishing a plan of care. "We also propose that a single practitioner furnish these services and that they must have the beneficiary’s consent to receiving these services over a one-year period," CMS said.

The proposed rule indicates that CMS intends to establish practice standards necessary to support payment for furnishing complex care coordination management services. Potential standards include access at the time of service to electronic health records (EHRs) that meet certification criteria and written protocols for many aspects of care management implementation, such as specific steps for monitoring medical and functional patient needs. The rule solicits comment on the potential for CMS to recognize a patient-centered medical home (PCMH) designation by private organizations as one means for a practice to demonstrate that it has met the requisite practice standards. "We plan to address policy regarding the practice standards, including PCMH recognition, through separate notice-and-comment rulemaking," CMS added.

Telehealth services -- The rule proposes to modify 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. The agency said this change would more appropriately identify sites within urban HPSAs that have rural characteristics and improve access to telehealth services in shortage areas.  In addition, the rule proposes to add transitional care management services to the list of eligible Medicare telehealth services.

Practice expense geographic adjustment -- CMS adjusts payments under the PFS to reflect local differences in practice costs. CMS assigns separate geographic practice cost indices (GPCIs) to the work, practice expenses (PE), and malpractice cost components of each of more than 7,000 physicians’ services. Also, CMS assesses the GPCIs every three years and adjusts them as appropriate with a two-year phase-in of the new GPCIs.

The rule proposes new GPCIs using updated data. In addition, CMS is changing the weights assigned to each GPCI (work, PE and malpractice) consistent with the recommendations of the Medicare Economic Index (MEI) Technical Advisor Panel that increases the weight of work and reduces the weight of practice expense. These new GPCIs would be phased in over calendar years 2014 and 2015.

Medicare Economic Index (MEI) -- CMS proposes revisions to the calculation of the MEI, which is the price index used to update physician payments for inflation. The rule includes proposed changes in the RVU and GPCI weights assigned to work and practice expense so that the weights in the payment calculation would continue to mirror those in the MEI if the proposed revisions are adopted.  As a result, CMS explained, "the proposal is to re-distribute some payment to work from practice expense."

Misvalued codes -- CMS proposes to adjust payment rates for more than 200 codes where Medicare pays more for services furnished in an office than in an outpatient hospital department or ambulatory surgical center (ASC).

"We generally expect the resource costs required to furnish a service to be higher in a hospital or ASC, which have to meet conditions of participation and conditions for coverage, respectively. Hospitals also must have stand-by capacity. We are proposing to limit the PFS payment in the situation described above to the total payment that Medicare would make to the practitioner and the facility when the service is furnished in a hospital outpatient department or ASC," CMS said. "In addition, for [calendar year] 2014, we are proposing potentially misvalued codes that we identified with the assistance of Contractor Medical Directors based on their personal experience in paying for Medicare services."

Application of therapy caps to Critical Access Hospitals -- The law applies two per beneficiary limits to outpatient therapy services -- one for physical therapy and speech-language pathology services and another for occupational therapy services. Before the American Taxpayers Relief Act passed earlier this year, the caps did not previously apply in Critical Access Hospitals (CAHs). CMS proposes to apply the therapy cap limitations and related policies to outpatient therapy services furnished in a CAH beginning on Jan. 1, 2014 to conform Medicare’s regulations to current law.

Additional changes -- The rule also proposes changes to quality reporting initiatives that are associated with PFS payments – the Physician Quality Reporting System and the Medicare EHR Incentive program -- and would alter the Physician Compare tool on the Medicare.gov website.

Finally, the rule continues the phased-in implementation of the physician value-based payment modifier created by the Affordable Care Act. That provision, according to CMS, would affect payments to physician groups based on the quality and cost of care they furnish to beneficiaries enrolled in the traditional Medicare fee-for-service program.