On October 30, 2015, CMS issued its first Medicare Physician Fee Schedule (PFS) final rule since Congress repealed the Sustainable Growth Rate formula earlier this year in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The final rule with comment period updates payment policies, payment rates and quality provisions for services furnished under PFS on or after January 1, 2016.
Highlights of the PFS final rule include:
New physician self-referral exceptions and physician-owned hospital updates.
In the final rule, CMS includes significant changes to the Stark Law first outlined in the July 8, 2015 proposed rule.
- CMS finalizes an exception that is similar to the physician recruitment exception. The new exception, which applies to hospitals, federally qualified health centers and rural health clinics, permits payments to physicians for recruiting nonphysician practitioners (e.g., physician assistants).
- CMS finalizes an exception that permits timeshare arrangements satisfying certain criteria.
- CMS implements notable technical changes to the Stark Law:
- CMS clarifies that a collection of documents can satisfy the writing requirement of many of the exceptions.
- The terms of a lease or personal services arrangement may holdover indefinitely without a formal writing as long as the arrangement continues to comply with the terms (e.g., fair market value) of the applicable exception both at the time of expiration of the original arrangement and during the period of the holdover, and the holdover is on the same terms and conditions as the original arrangement.
- CMS also modifies the temporary signature gap exception to permit a 90-day grace period to obtain missing signatures regardless of the reason(s) for the omission.
- CMS clarifies the public advertising disclosure requirement that applies to physician-owned hospitals. CMS states that social media sites and electronic payment and patient care portals do not satisfy the “public website for the hospital” requirement. In determining what language constitutes a sufficient statement of physician ownership, CMS clarifies that phrases ranging from “this hospital is owned or invested in by physicians” to “managed by physicians” will suffice.
- CMS redefines physician owner in existing regulations, which change is relevant to the limitation on expansion of physician ownership under the Stark Law whole-hospital exception. In calculating physician ownership, direct and indirect ownership interests held by all physicians and not just physicians who refer patients to the hospital are included. If hospitals do not accurately recalculate their baseline physician ownership levels beyond which they cannot expand or otherwise manage their physician ownership levels to come into compliance, hospitals may violate the Stark Law. CMS acknowledges the time needed for hospitals to come into compliance by making the physician ownership calculation first effective on January 1, 2017.
In the commentary accompanying the final rule, CMS references the experience it has gained through administering the Self-Referral Disclosure Protocol. On a number of technical fronts, CMS recognizes the energy required of providers – and perhaps CMS in processing self-disclosures – to maintain strict technical compliance with the Stark Law.
Although the implications for self-disclosures already submitted to CMS are unclear, the agency’s shift in tone suggests that it may more expeditiously and liberally process disclosures of purely technical violations among its current backlog.
Medicare telehealth services.
In the final rule, CMS revises existing regulations to include a Certified Registered Nurse Anesthetist (CRNA) to the list of distant site practitioners who can furnish covered Medicare telehealth services.
CMS updates the originating site facility payment for CY 2016 (HCPCS code Q3014) to 80 percent of the lesser of the actual charge or $25.10.
Further, CMS adds prolonged service inpatient CPT codes 99356 and 99357 and ESRD-related services 90963 through 90966 to the list of Medicare telehealth services, beginning in CY 2016. The prolonged service codes can only be billed in conjunction with subsequent hospital and nursing facility codes. Prolonged telehealth services are limited to one subsequent hospital visit every three days, and one subsequent nursing facility visit every 30 days. For the ESRD-related services, the required clinical examination of the catheter access site must be furnished face-to-face “hands on” (without the use of an interactive telecommunications system) by a physician, clinical nurse specialist (CNS), nurse practitioner (NP), or physician assistant (PA).
CMS solicits requests to add services to the list of covered Medicare telehealth services for CY 2017. These requests must be submitted by December 31, 2015.
Finally, CMS informs stakeholders of initiatives to promote telehealth that include the Next Generation Accountable Care Organization (ACO) Model and the Fed-Tel Committee. The Next Generation ACO model allows ACOs to provide telehealth services that exceed what is currently covered under the Medicare program. The Fed-Tel Committee members’ task is to facilitate telehealth education and information sharing, as well as coordinate funding opportunity announcements and other programmatic materials.
“Incident to” services.
CMS clarifies that in circumstances where the supervising physician or practitioner is not the same as the individual treating the patient, only the supervising physician or practitioner for that service may bill Medicare for “incident to” services. The auxiliary personnel providing “incident to” services and supplies must be enrolled in Medicare at the time the services or supplies are provided and cannot be excluded from Medicare, Medicaid, or other Federal health care programs by the Office of Inspector General.
While CMS emphasizes that the initial responsibility of compliance rests with providers, the agency seeks comments about possible approaches to monitor compliance of “incident to” services.
Payment reductions associated with new computed tomography (CT) modifier.
CMS establishes new modifier “CT” to account for CT services furnished using equipment that does not meet each of the attributes of the National Electrical Manufacturers Association (NEMA) Standard XR-29-2013. Payment for the technical component of applicable CT services under the PFS and for applicable CT services under the OPPS will be reduced (a 5-percent reduction in CY 2016 and a 15-percent reduction in CY 2017 and subsequent years) for non-NEMA standard compliant CT equipment.
Therapy caps for physical therapy (PT), occupational therapy (OT) and speech therapy (ST).
CMS updates the annual beneficiary limitations (therapy caps) on the amount of expenses per beneficiary that can be incurred for PT, OT, and ST services provided in all settings under Medicare Part B. For CY 2016, the therapy caps are set at $1,960.
Payment for biosimilars.
CMS clarifies that Medicare payment for Biosimilar biological products (biosimilars) will be based on the average base price (ABP) of all biosimilars included within the same billing and payment code. When the ASP is not sufficiently available from the manufacturer during the first quarter of sales to compute an ASP-based payment amount, CMS will use the wholesale acquisition cost (WAC) data to determine the national payment limit for a biosimilar product; the payment limit will be 106 percent of the WAC of the biosimilar product. The reference biological product will not be factored into the WAC-based payment limit determination.
CMS considers new payment codes for primary care and collaborative care management services.
CMS recognizes the substantial resources associated with delivering ongoing, collaborative care, beyond those resources already incorporated in current codes. Accordingly, CMS intends to address in future rulemaking whether separate payment codes should be developed to account for non face-to-face interprofessional consultations and services provided in the context of collaborative care models.
Ambulance fee schedule updates.
CMS extends payment add-ons and the Super Rural bonus at 22.6 percent for covered ground ambulance transports furnished before January 1, 2018.
CMS also revises the regulatory requirements and the definition of Basic Life Support (BLS) to (i) require all Medicare-covered ambulance transports to be staffed by at least two people, who meet both the requirements of state and local laws where the services are furnished, and the current Medicare requirements, and (ii) to clarify that for BLS vehicles, one of the staff members must be certified at a minimum as an EMT-Basic. CMS will revise manual provisions addressing vehicle staffing, as appropriate.
CMS finalizes its proposal to clarify sub-regulatory guidance in the Medicare Claims Processing Manual (Pub. 100-4, Chapter 13, Section 90.3) by removing the word “Medicare” before “patient” in section 90.3. CMS incorporates this change to clarify that, under the portable X-ray transportation fee proration policy, effective January 1, 2016, when more than one patient is X-rayed at the same location, the transportation payment must be prorated by allocating the trip among all patients (Medicare Parts A and B, and non-Medicare) receiving portable X-ray services during that trip, regardless of their insurance status.
Appropriate Use Criteria for advanced diagnostic imaging services.
CMS establishes which provider lead entities (PLEs) are eligible under Medicare to develop or endorse appropriate use criteria (AUC) for advanced diagnostic imaging services. PLEs will develop the evidence-based requirements for AUC according to the process set by CMS. PAMA requires providers to consult AUC via a clinical decision support mechanism starting January 1, 2017 when ordering an applicable imaging service in an applicable setting. Next CMS must approve clinical decision support mechanisms, collect additional information on the Medicare claim form to identify outlier ordering professionals, and develop a prior authorization requirement for outlier professionals beginning January 1, 2020.
Technical correction to amend regulation regarding deductible for anesthesia services during colonoscopies.
CMS amends existing regulations to provide that both surgical and anesthesia services furnished in connection with, as a result of, and in the same clinical encounter as a colorectal cancer screening test will be exempt from the deductible requirement when furnished on the same date as a planned colorectal cancer screening test.
Other notable MACRA changes.
As required by MACRA, CMS authorizes the end of the Physician Quality Reporting System (PQRS) in 2018 and the beginning of a new program, the Merit-Based Incentive Payment System (MIPS), beginning in 2019. In the interim, CMS finalizes criteria for the 2018 PQRS payment adjustment consistent with criteria for the 2017 PQRS payment adjustment. MACRA also introduces a framework for promoting and developing alternative payment models (APMs). Following a request for information on October 1, 2015, CMS continues to solicit detailed public comment concerning both MIPS and APMs.
As required by MACRA, the Physician Value-Based Payment Modifier (VM) is set to expire at the end of CY 2018 and will be replaced by MIPS beginning in CY 2019. The VM often translates into increased payment for physicians and other providers who provide high quality, efficient care. CMS finalizes its proposal to apply the VM to PAs, NPs, CNSs, and CRNAs practicing in groups, and to PAs, NPs, CNSs, and CRNAs who are sole practitioners, during the CY 2018 payment adjustment period.
MACRA prohibits CMS from implementing its policy to transition 10- and 90-day global codes to 0-day global codes. As MACRA requires, CMS will solicit comments regarding the best method for collecting and evaluating data to value surgical services, which data collection CMS must begin no later than January 1, 2017.
Prior to MACRA, physicians who wished to furnish through private contracts services otherwise reimbursable by Medicare could opt out for two-year periods. Physicians were required to renew their opt-out at the end of the two-year period. MACRA specifies that opt-out affidavits filed by physicians on or after June 16, 2015 will automatically renew every two years, eliminating the need to file renewal opt-out affidavits.
The PFS final rule is scheduled to be included in the Federal Register on November 16, 2015. The fact sheet can be found here. CMS must receive comments on the PFS final rule no later than 5 p.m. on December 29, 2015.
*Blake Walsh is admitted only in Tennessee. Her practice is supervised by principals of the firm admitted in the District of Columbia.