On Wednesday, November 2, 2016, CMS issued a final rule (Final Rule) to update payment policies and payment rates for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2017.  In the Final Rule, CMS walked back proposed requirements for coding of post-operative care that would have required coding in 10-minute increments.  The Final Rule also expanded the list of telehealth services for which Medicare will pay and made other coding revisions. CMS set a CY 2017 conversion factor of $35.89, a slight increase to the CY 2016 conversion factor of $35.80. 

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requires that, for CY 2017, the specified update to the PFS conversion factor increase by 0.5 percent before applying other adjustments.  CMS estimated that the CY 2017 net reduction in expenditures resulting from adjustments to relative values of misvalued codes is 0.32 percent.  According to CMS, because this does not meet the 0.5 percent target, PFS payments are to be reduced by 0.18 percent, which the American Academy of Family Physicians stated “violates the spirit of [MACRA]” in failing to give physicians MACRA’s 0.5 percent increase.  The Academy’s statement on the Final Rule is available here.

Surgical Care Coding and Reporting

In the proposed rule, CMS considered the use of G-codes for reporting services furnished during the pre- and post-operative periods of 10- and 90-day global services.  Instead, CMS finalized a policy that CPT code 99024 be used to report such visits.  Nor did CMS, as proposed, finalize a requirement for physicians to use time units in 10-minute increments to distinguish levels of visits.  Commenters had responded that “reporting of services by time did not reflect the way surgeons practiced and would divert practitioners from patient care.”

CMS is statutorily required to gather data on post-surgical visits, to be used to better value such services.  To that end, CMS finalized a policy that requires certain physicians to report on post-operative services furnished by more than 100 practitioners and are furnished more than 10,000 times or have allowed charges of more than $10 million annually.  CMS estimates this will allow it to collect data on 260 codes that describe approximately 87 percent of all furnished 10- and 90-day global services.  The list of codes will be based on CY 2014 claims data and posted to CMS’s website at a later date.  Reporting will be required for physicians in Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio, Oregon and Rhode Island (with an exemption for practices with fewer than 10 practitioners).  Reporting will become mandatory starting July 1, 2017, but CMS encourages physicians to begin on January 1, 2017.  CMS also finalized its proposal to collect post-surgical data from Accountable Care Organizations (ACOs).

Telehealth Expansion

CMS also finalized several policies related to services furnished via telehealth, most notably a place of service (POS) code specifically for such services.  Physicians reporting with the new telehealth POS code will be paid the facility PE RVUs.  CMS added telehealth codes for ESRD-related services (CPT codes 90967, 90968, 90969 and 90970), advance care planning services (CPT 99497 and 99498) and critical care consultation services (G0508 and G0509).  Lastly, for CY 2017, CMS set the payment amount for HCPC code Q3014 (telehealth originating site facility fee) at 80 percent of the lesser of the actual charge or $25.40.

Miscellaneous Billing Revisions

In addition, CMS made several revisions to the PFS billing code set, including:

• Unbundling non-face-to-face prolonged Evaluation & Management (E/M) Services (CPT codes 99358 and 99359) and fixing an error in the proposed rule, now allowing that the prolonged time be provided on a different day than the companion E/M code;
• Creating four new G-codes for behavioral health integration services focused on the psychiatric Collaborative Care Model (CoCM);
• Changing Chronic Care Management (CCM) services to move “toward advanced primary care, while eliminating redundancy, simplifying provisions of services, and improving access ... .”  CMS added CPT descriptors for CPT codes 99487 and 99489 for complex CCM services;
• Creating a G-code for separate payment to physicians for assessing and creating a care plan for beneficiaries with cognitive impairments such as Alzheimer’s disease or dementia.  CMS intends for the G-code to be replaced in CY 2018 with a CPT code, recently approved by the CPT Editorial Panel;
• Finalizing values for new CPT codes related to moderate sedation for certain endoscopic procedures; and
• Updating the coding framework around mammography services to reflect updated technology moving from film to digital imaging.

Remand from Council for Urological Interests

CMS responded to the D.C. Circuit’s 2015 remand of Council for Urological Interests v. Burwell for the Secretary to consider whether a ban on per-click equipment leases is consistent with the House Conference Report.  CMS made use of the Secretary’s “broad authority” and finalized the current regulations that per-unit of service (per click) rental charges for office space or equipment may be permitted, but only where the referral for the service provided in the space or using the equipment does not come from the lessor.

Medicare Shared Savings Program

CMS finalized several policies around its Medicare Shared Savings Program including:

• Changing the measure set used in establishing the quality performance standard in the areas of patient/caregiver experience of care, care coordinating/patient safety, preventive health and at-risk populations (retiring certain measures and adding ACO-12 Medicaid Reconciliation Post-Discharge and ACO-44 Use of Imaging Studies for Low Back Pain, the latter of which will simply be a “pay for reporting”);
• Changing the methodology used to validate quality data submitted by the ACO by increasing and changing audit procedures (including enforcement of penalties if ACO audit matches fall below 90 percent);
• Revising the terms “quality performance standard” and “minimum attainment level” in the regulation text, used to determine whether an ACO has met the quality performance standard for a performance year;
• Revising the use of flat percentages to establish quality benchmark (that is, CMS will no longer use flat percentages to set the quality performance benchmark for quality performance measures calculated as ratios);
• Allowing eligible providers that bill under the TIN of an ACO to report for purposes of the Physician Quality Reporting System apart from the ACO; and
• Aligning ACO quality reporting with policies proposed in the Quality Payment Program proposed rule, sunsetting PQRS and EHR Incentive Program alignment.

Medicare Part C

Lastly, CMS made a number of updates to Medicare Part C, most notably finalizing a policy that requires that providers and supplies must be enrolled in Medicare in order to render services to Medicare Advantage beneficiaries.

CMS’s fact sheet on the Final Rule is available here.  The display copy of the Final Rule is available here and is scheduled to be published in the Federal Register on November 15.