The Centers for Medicare & Medicaid Services (CMS) issued the 2015 Medicare Physician Fee Schedule (Medicare PFS) on October 31, 2014. The final rule updates payment policies and payment rates for services furnished to Medicare beneficiaries by physicians and other practitioners. The provisions of the final rule are effective on January 1, 2015.

Under the Medicare PFS final rule, physician payment rates will be reduced by 21.2 percent after March 2015. In April 2014, President Obama signed the Protecting Access to Medicare Act of 2014, which prohibited a reduction in the PFS rates from January through March 2015. However, when this temporary solution expires, absent a change in law, there will be a large reduction in PFS rates.

Some other provisions included in the Medicare PFS final rule include:

• Primary care and chronic care management: Medicare primarily pays physicians and other practitioners for care management services as part of face-to-face visits. Beginning in 2015, CMS will now pay for chronic care management (CCM) services separately for Medicare beneficiaries who have two or more significant, chronic conditions. The final rule establishes a payment rate for CCM services that may be billed up to once per month for each qualified patient. CCM services include communication and coordination among a care team, medication management, and consistent review of a patient’s plan of care.
• Transparency in setting PFS rates: CMS establishes a new process for determining fee schedule payment rates that will allow for greater public input and transparency prior to payment rates being set. The final rule allows the payment rates to go through notice and comment rulemaking prior to being adopted.
• Telehealth services: CMS is expanding the telehealth benefit available to Medicare beneficiaries to include the following services: annual wellness visits, psychoanalysis, psychotherapy, and prolonged evaluation and management services.
• Improving quality: The final rule establishes new requirements related to the 2017 Physician Quality Reporting System (PQRS) payment adjustment. To promote reporting of quality information, the PQRS is a pay-for-reporting program that provides incentive payments and payment cuts to eligible professionals. Beginning in 2015, the program will apply a payment adjustment, or cut, to professionals who do not report data on quality measures for particular professional services.

The Medicare PFS final rule is one of several rules governing provider and supplier payments that reflect a broader strategy to deliver higher quality care at lower cost. In the Medicare PFS final rule, CMS seeks to find better ways to pay physicians and other practitioners and deliver care in order to achieve better health outcomes and improve coordination across the health care system.

The final rule is set for publication on November 13, 2014, in the Federal Register with the public comment period open until December 30, 2014.

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