CMS releases final CY 2015 Medicare outpatient and physician payment rules, including MSSP quality measurement Last Updated: February 17, 2015
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The Centers for Medicare & Medicaid Services (CMS) has released the final rules for the outpatient prospective payment system (PPS) and the Medicare physician fee schedule for calendar year (CY) 2015. Premier will provide detailed summaries of the final rules in the coming days.

Outpatient prospective payment system

The final outpatient PPS rule will increase payment rates under the hospital outpatient PPS by 2.3 percent in CY 2015, slightly higher than the 2.1 percent increase estimated in the proposed rule. This increase is based on the projected hospital inpatient market basket percentage increase of 2.9 percent for services paid under the hospital inpatient PPS minus the multifactor productivity adjustment of 0.5 percentage points and minus a 0.2 percentage point adjustment to the market basket, both of which are required by the Affordable Care Act (ACA). The final rule will be published in the Federal Register on November 10, 2014.

Highlights of the final rule include:

Comprehensive APCs: Adopted in the CY 2014 outpatient PPS final rule but delayed until CY 2015 for implementation, comprehensive APCs (C-APCs) pay for high cost device dependent services using a single payment for the hospital stay, but unlike the existing device-dependent APCs, these payments will include room and board as well as nursing costs. CMS is finalizing 25 out the proposed 28 C-APCs for CY 2015.

Packaging: CMS finalized its proposal to conditionally package all ancillary services that are currently assigned to APCs with a geometric mean cost of $100 or less. However, CMS will separately pay for these services when they are billed with no other procedures.  Although considered ancillary, CMS will pay for preventative services, psychiatry-related services and drug administration procedures separately regardless of billing with other procedures. CMS also finalized its proposal to package prosthetic supplies and all other supplies used in conjunction with a surgical or other procedure.

Off-Campus Provider-Based Departments:  CMS will begin to collect data on services furnished in off-campus provider-based departments in CY 2015. Hospitals will be required to report the HCPCS “PO” modifier with every code on facility claims for outpatient hospital services furnish in off-campus provide-based departments. Reporting will be voluntary for CY 2015, mandatory reporting will start January 1, 2016.

Part B Drugs in the Outpatient Department:  CMS is finalizing its proposal to continue paying average sales price (ASP) + 6 percent for non-pass-through drugs and biologicals that are payable separately under the Outpatient PPS.  The packaging threshold for non-pass-through drugs is $95, an increase from the proposed $90 amount.

Hospital outlier payments:  For hospitals to receive an outlier payment, the cost of a service must exceed the multiple threshold of 1.75 times the APC payment rate and exceed the CY 2015 fixed dollar threshold of the APC payment plus $2,775.

Outpatient quality reporting: CMS is decreasing the number of measures for the Hospital Outpatient Quality Reporting (OQR) program to 25 from 27 for payment year 2017. The changes include removing two chart abstracted measures, adopting one new claims-based measure and changing one chart-abstracted measure (OP-31: Cataracts — Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (NQF #1536)) from required to voluntary reporting.

Removes two chart abstracted measures:

  • OP-4: OP-4: Aspirin at Arrival
  • OP-6: Timing of Prophylaxis Antibiotics and
  • OP-7: Prophylactic Antibiotic Selection for Surgical Patients

Adopts one claims based measure for payment year 2018:

  • OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy

CMS is also modifying the Hospital OQR Program validation process and formalization of a review and corrections period.

Ambulatory surgical centers

The final ambulatory surgical center (ASC) rule increases payment rates to ASCs by 1.4 percent in CY 2015. This reflects a consumer price index for all urban consumers estimated at 1.9 percent, minus a 0.5 percent productivity adjustment required by ACA.

Quality reporting ASC: CMS is increasing the number of measures for the ASCQR Program to 12 from 11 for payment year 2017. CMS adopts one new claims based outcome measure and changes one chart abstracted measure to voluntary.

Adopts one new claims based measure:

  • ASC-12: Facility Seven-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy

Changes one chart abstracted measure to voluntary:

  • OP-31 and ASC-11: Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery

Medicare Physician Fee Schedule

Absent congressional intervention, the CY 2015 Medicare physician fee schedule (PFS) final rule will reduce payments to physicians by 21.2 percent in March 31, 2015 when the current SGR ‘patch’ expires, as called for under the sustainable growth rate (SGR) formula. However, Congress is expected to override the reduction, which it has done every year since 2003. Among other provisions in the rule, CMS finalized quality-related policies for the Medicare Shared Savings Program. The final rule will be published in the Federal Register on November 13, 2014.

Among other provisions, CMS finalized the following policies:

Policy and payment changes

Global codes: CMS finalized its proposal to transform all 10- and 90-day global surgery codes to 0-day global codes and re-value them accordingly, with separate payment to be made for post-procedure visits. CMS will begin in CY 2017 with 10-day global services, followed by 90-day global codes in CY 2018.

Chronic management: CMS adopted additional policies that will allow Medicare payment of $40.39 that can be billed once per month per patient for chronic care management beginning January 1, 2015.

Place of service code: CMS will be creating two new place of service (POS) codes for off-campus physician offices to be used on physician professional claims — one to identify outpatient services furnished in on-campus, remote or satellite locations of a hospital, and another to identify services furnished in an off-campus hospital provider-based departments setting that is not a remote location of a hospital, a satellite location of a hospital or a hospital emergency department. These codes will likely not be available until July 1, 2015.  This code will have no voluntary period; It will be mandatory immediately and explained through subregulatory means in order to prepare physicians to use it correctly.

Telehealth services: Annual wellness visits, psychoanalysis, psychotherapy, and prolonged evaluation and management services will be added to the list of services that can be provided to Medicare beneficiaries as a telehealth benefit.

Revisions to Geographic Practice Cost Indices (GPCIs): CMS will adjust payment rates to account for differences in the cost of operating a medical practice in different areas of the country. All GPCIs include the elimination of the 1.0 work GPCI floor April 1, 2015, as required by law.

Valuing codes: CMS finalized a new transparent process for valuing new, revised and potentially misvalued codes for CY 2016, so that payment for the vast majority of these codes goes through notice and comment rulemaking prior to being adopted. CMS also make adjustments to codes the agency determined were misvalued.

Physician Payment Sunshine Act/Open Payments: CMS finalized its proposal to remove the exclusion from the Open Payments reporting obligation for payments or other transfers of value made by a manufacturer to a physician or teaching hospital for speaking at a continuing medical education program.

Physician quality programs

Physician Quality Reporting System (PQRS) measures: Beginning in 2015, a downward payment adjustment will be applied to eligible professionals who do no satisfactorily report data on quality measures for covered professional services or satisfactorily participate in a qualified clinical data registry (QCDR).

For 2015, CMS adds 20 new individual measures and two measures groups and removes 50 measures from reporting for the PQRS. These changes bring the PQRS individual measure set to 255 total measures.

CMS also finalized the following criteria for satisfactorily reporting for the 2017 PQRS payment adjustment:

  • Eligible professionals who see at least one Medicare patient in a face-to-face encounter will be required to report at least two measures from a new cross-cutting measures set in addition to any other measures that the eligible professional is required to report.
  • Group practices with 25 or more eligible professionals must report measures under the GPRO web interface on a beneficiary sample of 248.
  • Group practices of 100 or more eligible professionals that are registered for the GPRO must report on the Consumer Assessment of Healthcare Provider and Systems survey (CAHPS) for PQRS regardless of the reporting mechanism the group practice chooses and bear the cost.

Physician Compare: CMS is requiring that all 2015 PQRS GRPO web interface, registry, and EHR measures for group practices of 2 or more EPs and ACOs be made available for public reporting on Physician Compare in 2016. Further, these data must meet the minimum sample size of 20 patients and prove to be statistically valid and reliable.

CMS is not finalizing its proposal to publicly report 20 PQRS individual measures reported in 2013 and collected through a registry, electronic health record (EHR), or claims in 2015. However, the agency is finalizing its proposal to make all 2015 PQRS individual measures collected via registry, EHR, or claims available for public reporting on Physician Compare in late 2016.

Finally, the rule requires public reporting of 2015 CAHPS data for PQRS for group practices of two or more EPs who report these data, as well as CAHPS for ACOs for those that meet the specified sample size requirements and collect data via a CMS-specified CAHPS vendor in 2016. Also, the 2015 Qualified Clinical Data Registry (QCDR) measure data will be publicly reported in 2016 and available on Physician Compare, but will not be required to be publicly reported on the QCDR websites.

Medicare Shared Savings Program (MSSP) quality provisions

CMS finalized with some modifications multiple proposals and updates to the current quality measurement requirements in MSSP, revising the quality performance standard and current quality measures.

Additional quality improvement reward: CMS is revising the quality scoring methodology to recognize and reward year-to-year improvement in scores on individual measures, as opposed to just rewarding achievement. In this approach, CMS will provide bonus points to each of the quality domains based on improvement, with ACOS being able to receive up to four points, beginning in 2015.

Revisions to quality measures benchmarks: The final rule modifies the benchmark methodology approach to topped out measures by utilizing flat percentages to establish the benchmark when the national fee-for-service data results in the 90th percentile being greater than or equal to 95 percent.

Modifications to the quality measures that make up the quality reporting standard: CMS is maintaining the number of quality metrics at 33, but is increasing the number of measures calculated through claims and decreasing the number of measures reported through the GPRO web interface. The new measures added are:

  • Avoidable admissions for patients with multiple chronic conditions, heart failure and diabetes;
  • All cause readmissions to a skilled nursing facility;
  • Depression remission;
  • Documentation of current medications; AND
  • Stewardship of patient resources.

Quality performance standard for measures that apply to ACOs that enter a second or subsequent participation agreement: The final rule requires that MSSP participants that move into a second or subsequent participation agreement period would continue to be assessed in pay-for-performance on the quality measures consistent with the third year of the first agreement period.

Final changes for the Physician Value-based Payment Modifier

Group size and application of the Value Modifier to non-physician EPs: CMS finalized its proposal to begin applying the budget-neutral Value Modifier to all physicians, including those in groups with two or more eligible professionals (EPs) and to physicians who are solo practitioners in CY 2017. CMS will apply the Value Modifier to non-physician eligible professionals (EPs) who are solo practitioners or in groups with two or more EPs beginning in 2018.

Payment adjustments:Under the final rule, the downward adjustment under the Value Modifier will increase from -2.0 percent in the CY 2016 payment adjustment period to -4.0 percent for the CY 2017 payment adjustment period, but only for groups with 10 or more EPs. For groups with two to nine EPs, the maximum downward adjustment is -2.0 in CY 2017.

Under the quality-tiering methodology, CMS also increased the maximum downward adjustment to -4.0 percent for groups of 10 or more EPs classified as low quality/high cost and set the adjustment to -2.0 percent for groups classified as either low quality/average cost or average quality/high cost. CMS also increased the maximum upward adjustment in the CY 2017 payment adjustment period to +4.0x (“x” represents the upward payment adjustment factor) for groups of 10 or more EPs classified as high quality/low cost and set the adjustment to +2.0x for groups classified as either average quality/low cost or high quality/average cost. For groups with two to nine EPs and solo practitioners, the maximum upward adjustment in CY 2017 will be +2.0x if classified as high quality/low cost and for those practitioners that are classified as average quality/low cost or high quality/average cost, the upward adjustment will be +1.0x. Groups of two to nine EPs and solo practitioners will be held harmless from downward adjustments under the quality-tiering methodology for the CY 2017 payment adjustment period.

Measures: The Value Modifier quality composite score for CY 2017 will be comprised of PQRS quality measures that are reported through all available PQRS reporting mechanisms, plus three additional claims-based measures that CMS will calculate. The cost composite for CY 2017 will be calculated using five total per capita cost measures and the Medicare Spending per Beneficiary measure, which are the same cost measures that were finalized in the 2014 PFS for use in the CY 2016 Value Modifier.

MSSP ACOs: In a change to the proposed rule, CMS will apply the Value Modifier to physicians in groups with two or more EPs and to physicians who are solo practitioners that participate in accountable care organizations (ACO) under the Medicare Shared Savings Program (MSSP) beginning in CY 2017.  CMS will apply the Value Modifier to non-physician EPs participating in the MSSP in CY 2018.

Under the final rule, the PQRS GPRO web-interface measures will be used to determine the quality of care composite for the ACO MSSP participants in CY 2017. Additionally, the all cause hospital readmissions measure will be used for inclusion in the quality composite for the Value Modifier for this group. In contrast to its proposal, CMS will use the performance period status to determine whether an EP was a participant in a MSSP, a Pioneer ACO or the Comprehensive Primary Care Initiative.

Other Innovation Center models: CMS will apply the Value Modifier to physicians in groups with two or more EPs and to solo practitioners who are physicians that participate in the Pioneer ACO Model, the Comprehensive Primary Care (CPC) Initiative, or other similar Innovation Center models or CMS initiatives during the relevant performance period, beginning in CY 2017. CMS is also considering a waiver to the Value Modifier for groups and solo practitioners that participate in these models.

Resources

Outpatient PPS

Medicare PFS