On July 7, 2016, CMS issued a proposed rule that updates payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2017 (Proposed Rule).  The Proposed Rule also contains proposed changes to the appropriate use criteria program (AUC) as well as the Medicare Shared Savings program, Medicare Advantage, and Accountable Care Organizations.   In addition, CMS included a proposal with respect to the Stark Law.  The Proposed Rule is scheduled for publication in the Federal Register on July 15, 2016 and is available in pre-publication form here.  The accompanying CMS Fact Sheet is available here. CMS will accept comments on the Proposed Rule until September 6, 2016.  The Proposed Rule contains payment rate updates, including relative value unit (RVU) adjustments, that are available here. In addition to payment rate updates, the Proposed Rule contains other proposed changes related to reimbursement, including:

• Changes intended to better identify and improve payment accuracy for primary care, care management, and cognitive services, including revaluation of certain CPT codes, separate payments for certain existing CPT codes, and using new codes;
• Changes removing moderate sedation as an inherent part of furnishing certain procedures;
• Adjustments to the Geographic Price Cost Index, including the use of Metropolitan Statistical Areas (MSAs) in California required for 2017.  According to CMS, the change in California may increase payment to many physicians in urban parts of California without any reductions in specified counties that the law “holds harmless” from payment reductions.  However, the changes may still decrease Medicare PFS payments in certain MSAs;
• A new place of service code specifically designed to report services furnished via telehealth; 
• New global service coding for pre- and post-operative care;
• New CPT coding for mammography services;
• Changes to RVU phase-in requirements for services that are not new or revised codes (if the total RVUs for a service for a year would otherwise be decreased by an estimated 20 percent or more as compared to the total RVUs for the previous year, the adjustments are phased in over a two-year period) so that for purposes of the 20 percent threshold, every service is evaluated anew each year, and any applicable phase-in is limited to a decrease of 19 percent; and
• Updates to the value-based payment modifier informal review policies to establish how the quality and cost composites under the value-based payment modifier (VM) would be affected for the CY 2017 and CY 2018 payment adjustment periods in the event that unanticipated program issues arise.

The Proposed Rule also contains changes to the appropriate use criteria program (AUC) for advanced diagnostic imaging services, which was established in CY 2016.  The Proposed Rule includes proposals for priority clinical areas, clinical decision support mechanism (CDSM) requirements, the CDSM application process, and exceptions for ordering professionals for whom consultation with AUC would pose a significant hardship.  CDSMs involve a technology platform through which a clinician consults AUC to determine the appropriateness of an advanced diagnostic imaging service for a particular patient.  These changes would not begin earlier than January 1, 2018.

CMS also included in the Proposed Rule changes applicable to specific programs and payors, including Medicare Shared Savings, Medicare Advantage, and Accountable Care Organizations.

• Proposed changes to the Medicare Shared Savings Program include:
  • Quality reporting changes, including changes to measures, revisions that would permit eligible professionals in Accountable Care Organizations (ACOs) to report quality apart from the ACO, and updates to align with the Physician Quality Reporting System and the proposed Quality Payment Program;
  • Modifications to align beneficiaries to an ACO when a beneficiary has designated an ACO professional as responsible for their overall care; and
  • New beneficiary protection policies related to use of the skilled nursing facility 3-day waiver.
• Proposed changes related to the Medicare Advantage (MA) Program include:
  • Requiring MA providers or suppliers that furnish health care items or services to Medicare enrollees who receive Medicare benefits through a MA organization to be enrolled in Medicare and be in an approved status, effective two years from the publication date of the final rule; and
  • CMS’s release of two new sets of data related to plan participation in  MA and the Part D prescription drug program:  MA Bid Pricing and Medical Loss Ratio.

CMS is also proposing expansion of the Diabetes Prevention Program (DPP) into Medicare beginning January 1, 2018.  The proposed benefit includes a 12-month program using the CDC-approved DPP curriculum, consisting of 16 core sessions over 16–26 weeks and the option for monthly core maintenance sessions over six months thereafter if the beneficiary achieves and maintains a minimum weight loss in accordance with the CDC Diabetes Prevention Recognition Program Standards and Operating Procedures. Under the Proposed Rule, any organization recognized by the CDC (that is, those with preliminary or full recognition) to provide DPP services would be eligible to apply for enrollment in Medicare as a supplier beginning on or after January 1, 2017, and would be subject to CMS enrollment requirements.  A Fact Sheet on the proposed expansion is available here.

Finally, in response to the remand of Council for Urological Interests v. Burwell to CMS for the Secretary to consider whether a ban on per-click equipment leases is consistent with the House Conference Report, CMS is  re-proposing the current regulation 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.