CMS Finalizes 2016 Medicare Payment Rules for Physicians, Hospitals & Other Providers

The Centers for Medicare & Medicaid Services (CMS) issued final rules late last week detailing how the agency will pay for services provided to beneficiaries in Medicare by physicians and other health care professionals in 2016

"CMS is pleased to implement the first fee schedule since Congress acted to improve patient access by protecting physician payments from annual cuts. These rules continue to advance value-based purchasing and promote program integrity, making Medicare better for consumers, providers, and taxpayers," said CMS Acting Administrator Andy Slavitt. “We received a large number of comments supporting our proposal to allow physicians to bill for advanced care planning conversations and we are finalizing this rule accordingly.”

AMDA’s comments on several key issues had a major influence on proposals finalized in the rule. These include:

Advance Care Planning

CMS finalized payment for the already established Advance Care Planning CPT codes. The initial proposal was applauded by AMDA and many others in the healthcare community. The rule establishes separate payment and a payment rate for two advance care planning services provided to Medicare beneficiaries by physicians and other practitioners. In making its decision, CMS cited a letter from 66 provider and consumer groups, including AMDA, AARP, and the American Medical Association, wrote to Secretary Burwell in support of Advance Care Planning because it “leads to better care, higher patient and family satisfaction, fewer unwanted hospitalizations, and lower rates of caregiver distress, depression and lost productivity.” In a press release in July, AMDA president Naushira Pandya, MD, CMD, expressed her support for the “vital advance care planning services” further stating that “post-acute and long-term care practitioners provide quality and thoughtful care and family members and friends of very ill patients will receive greater peace of mind that the care their loved ones receive is based on adequate medical information, collaborative goal setting, as well as respect for personal wishes and values in order to maximize comfort and quality of life.” AMDA members played an integral role responding to requests for input during the development phase of these codes.

SNF POS 31 and ACO Attribution

CMS also responded to AMDA’s concerns around attribution of skilled nursing facility (SNF) (POS 31) patients to the Medicare Shared Savings Accountable Care Organizations (ACO). In the final rule, CMS states that they received support for comments initially put forth by AMDA arguing that “ACOs are often inappropriately assigned patients who have had long SNF stays but would not otherwise be aligned to the ACO and with whom the ACO has no clinical contact after their SNF stay.” AMDA raised similar concerns in its letters and meetings with CMS officials. CMS further states that, “Although the same CPT visit codes are used to describe these services in SNFs (POS31) and NFs (POS32), the patient population is arguably quite different.” CMS opines that the difference in the populations is that “Patients in SNFs (POS 31) are shorter stay patients who are receiving continued acute medical care and rehabilitative services. While their care may be coordinated during their time in the SNF, they are then transitioned back in the community. Patients in a SNF (POS 31) require more frequent practitioner visits often from 1 to 3 times a week. In contrast, patients in NFs (POS 32) are almost always permanent residents and generally receive their primary care services in the facility for the duration of their life. Patients in the NF (POS 32) are usually seen every 30 to 60 days unless medical necessity dictates otherwise.”

Based on this distinction, CMS finalized its proposal to amend the definition of primary care services at §425.20, for purposes of the Shared Savings Program, to exclude services billed under CPT codes 99304 through 99318 when the claim includes the POS 31 modifier.

Other policies CMS finalized in this rule included:

• Beginning the new physician payment system post the Sustainable Growth Rate (SGR) formula and supporting patient- and family-centered care. This is the first final Physician Fee Schedule final rule since the repeal of the SGR formula by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Through the final rule, CMS is beginning implementation of the new payment system for physicians and other practitioners, the Merit-Based Incentive Payment System, required by the legislation.
• Medicare Shared Savings Program. The Medicare Shared Savings Program (Shared Savings Program) was established to promote accountability for a patient population, coordinate items and services under parts A and B, and encourage investment in infrastructure and redesigned care processes for high quality and efficient service delivery through provider and supplier participation in an ACO. The CY 2016 PFS final rule with comment period finalizes policies specific to certain sections of the Shared Savings Program regulations including:
  • Adding a measure of Statin Therapy for the Prevention and Treatment of Cardiovascular Disease in the Preventive Health domain of the Shared Savings Program quality measure set to align with updated clinical guidelines and PQRS reporting;
  • Preserving flexibility to maintain or revert measures to pay for reporting if a measure owner determines the measure no longer aligns with updated clinical practice or causes patient harm;
  • Clarifying how PQRS-eligible professionals participating within an ACO meet their PQRS reporting requirements when their ACO satisfactorily reports quality measures; and
• Finalizing the Home Health Value-Based Purchasing model. This model, authorized under the Affordable Care Act, is designed to improve health outcomes and value by tying home health payments to quality performance. All Medicare-certified home health agencies that provide services in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee will participate in this model starting January 1, 2016. Compared to the proposed rule, the maximum payment adjustment in the first year of the model was reduced from 5 percent to 3 percent. This was part of the Home Health Prospective Payment System final rule.
• Finalizing updates to the “Two-Midnight” rule. The rule clarifies when inpatient admissions are appropriate for payment under Medicare Part A. This continues CMS’ long-standing emphasis on the importance of a physician’s medical judgment in meeting the needs of Medicare beneficiaries by providing clearer guidelines and a more collaborative approach to education and enforcement. This was part of the Hospital Outpatient Prospective Payment System final rule.<
• Finalizing the End-Stage Renal Disease Quality Incentive Program. The End-Stage Renal Disease final rule will apply payment incentives to dialysis facilities to improve the quality of dialysis care. Facilities that do not achieve a minimum total performance score with respect to quality measures, such as anemia management, patient experience, infections, and safety, will receive a reduction in their payment rates.