2016 Physician Fee Schedule: Includes Changes on Self-Referral Rules, Biosimilars and Reimbursement, Transparency Changes for Another Day
Earlier this year, we wrote about the proposed Medicare Physician Fee Schedule. In the proposed rule, CMS sought comment on whether to add Open Payments data to its “Physician Compare” website. Additionally, the proposal included a decision to fund previously controversial advance care planning codes, the first regulations implementing the post-SGR legislation, Stark Law exceptions, and more.
For now, CMS decided against finalizing any decision to publish Open Payments data on the Physician Compare website, according to the rule. The final rule will be published in the Federal Register on November 16, 2015. Comments on the final rule must be received by CMS before December 29, 2015 at 5pm.
Open Payments
CMS explains in the rule that it sought comment on adding Open Payments data to the Physician Compare website. However, prior to issuing any proposal, CMS is testing data with consumers to establish the context and framing needed to best ensure these data are accurately understood and presented in a way that assists decision making. CMS concluded that Open Payments data are different from the quality of care data included on Physician Compare and it will continue testing with consumers. The agency is taking comments and recommendations under consideration and may address them in future rulemaking.
Biosimilars
Despite criticism from industry, Congress, and the biosimilars industry, CMS finalized its rule that sets a single reimbursement price for all biosimilars of a given reference product covered under Medicare Part B. Biosimilar manufacturers have noted that biosimilars for the same reference product may not necessarily share all indications or interchangeability status and therefore should receive unique payment rates. CMS specifically notes in the rule that it did not consider how interchangeability status will factor into its final payment policy because there are currently no interchangeable biosimilars on the market.
Ultimately, if each biosimilar to a reference produce is not given a different code, providers are concerned they will not receive an appropriate payment, creating a race to the bottom that short-changes biosimilars. Orrin Hatch (R-UT), Chairman of the Senate Committee on Finance, strongly objected and wrote CMS to not finalize the rule. This could be an area of legislative action in the future.
Stark Law
The proposed rule from CMS contained significant changes to the regulations that implement the federal physician self-referral law. In the final rule, CMS adopts most of the proposed changes. One notable exception created by the final rule states that under certain conditions, Medicare will permit payments to physicians by hospitals, Federal Qualified Health Centers or Rural Health Clinics for the purpose of compensating non-physician practitioners.
To quality for the exception, the arrangement must be for the expansion of access to mental health care services or primary care services. The exception further requires a minimum amount of primary care or mental health care services furnished to patients of the physician’s practice by the non-physician practitioners, caps on the amount and duration of remuneration that may be furnished, restrictions on providing assistance if the non-physician practitioner has practices in the geographic service area served by the hospital, FQHC or RHC within one year prior to becoming employed by the physician, and additional safeguards consistent with other Stark Law direct compensation exceptions.
CMS clarified the public advertising disclosure requirement that applies to physician-owned hospitals. CMS states that social media sites and electronic payment and patient care portals do not satisfy the public website for the hospital requirement. To determine what language constitutes a sufficient statement of physician ownership, the agency clarified that phrases ranging from “this hospital is owned or invested in by physicians” to “managed by physicians” is sufficient.
Another new exception exists with timeshare arrangements. According to CMS, timeshare arrangements do not transfer dominion and control over the premises, equipment, personnel, items, supplies, and services of their owner. Rather, it confers a privilege to use, during specified periods of time, the premises, equipment, personnel, items, supplies, and services that are the subject of the arrangement.
Such arrangements may not qualify for protection under existing Stark Law exceptions, and because the arrangements are often necessary to ensure adequate access to needed specialty care, CMS finalized its proposal for a new exception to protect such arrangements. To be protected under the new exception, the arrangement must be se out in writing, signed by the parties, and specify the premises, equipment, personnel, items, supplies and services covered by the arrangement. The arrangement must be between a hospital or physician organization and a physician or the physician organization in whose shoes the physician stands, the licensed items must be used predominantly to furnish evaluation and management services to patients of the licensee, the arrangement must not be conditioned on the licensee’s referral of patients to the licensor, and the compensation arrangement must be set in advance and consistent with fair market value.
Furthermore, the new exception also requires that the equipment must be located in the same building where the physician performs evaluation and management services, be used only to furnish designed health services that are incidental to the E/M services furnished, and not be advanced imaging equipment, radiation therapy equipment, or clinical or pathology lab equipment other than that which is used to perform clinical laboratory improvement amendments-waved lab tests.
The new exception also prohibits types of per-unit of service compensation under timeshare arrangements but permits others. CMS does not specify minimum time-based units like per hour or per day. CMS employed a federal court ruling to justify the decision, claiming the new exception will not pose a risk of program or patient abuse.
The final rule further establishes that the writing required in many Stark exceptions can be a collection of documents, as opposed to a single, formal contract. The final rule removes the term agreement from nearly all exceptions in which it appears. CMS clarified that parties need not reduce the key terms of an arrangement to a single formal contract and that the agency offers a list of examples of documents that might, individually or in combination, meet the writing requirement. These include board meeting minutes or other documents authorizing payments for specified services, written communications including hard and electronic copies, check requests or invoices, time sheets, call coverage schedules, accounts payable or receivable records documenting the date and rate of payment and the reason for payment, and checks issued for items, services, or rent.
Continuing, the final rule also addresses holdover arrangements. Several regulatory exceptions permit a holdover arrangement for up to six months if the arrangement has a term of at least one year, meets the requirements of the exception when it expires, and continues on the same terms and conditions after its stated expiration. The final rule amends these exceptions to permit indefinite holdovers if the arrangement complies with the applicable exception when the arrangement expires by its own terms, the holdover is on the same terms and conditions as the immediately preceding arrangement, and the holdover continues to satisfy the requirements of the applicable exception, including that compensation be consistent with fair market value.
The final rule revises fair market value exception to remove the limitation that only arrangements for less than one year may be renewed any number of times. Now, arrangements of any timeframe, including arrangements for more than one year may be renewed any number of times.
CMS also addressed split billing arrangements, noting that these arrangements include a physician making use of a hospital’s resources when treating hospital patients, the hospital billing the appropriate payor for these resources, and the physician billing the payer for his or her professional fees only. To address concerns that the hospital has provided remuneration to the physician, CMS states that it does not believe such an arrangement involves remuneration between the parties because the physician and the DHS entity do not provide items, services or other benefits to one another. Instead, the physician provides services to the patient and bills the payor for his or her services and the DHS entity provides its resources and services to the patient and bills the payor for the resources and services, therefore, there is no remuneration between the parties for purposes of the Stark Law.
Advance Care Planning
CMS is now allowing Medicare to reimburse physicians for these discussions. Years ago, they were dubbed “death panels” during the early days of the Affordable Care Act, but this time around there was almost no controversy. Supported by numerous medical organizations, CMS said the proposal will help patients “make important decisions that give them control over the type of care they receive and when they receive it,” in an agency news release.
Physicians can use two current procedural terminology (CPT) billing codes for the service. CPT code 99497 covers a discussion of advance directives with patients, a family member, and/or surrogate for up to 30 minutes. An additional 30 minutes of discussion takes the add-on code of 99498. Medicare will pay approximately $86 for the first CPT code and $75 for the second when the counseling occurs in a physician’s office. The service can be an optional and reimbursable element of Medicare’s annual wellness visit. However, the agency declined to issue a national coverage determination which means local medical administrators, many of whom are commercial insurers that process Medicare claims, will make the decision to reimburse for the service.
Pay Rate
When Congress repealed the sustainable growth rate (SGR) formula, it called for an annual raise of .5% from 2016 through 2019 as a part of a transition to value-based reimbursement. However, this is now a .3% pay cut in the final rule because of the Affordable Care Act and other laws that set Medicare reimbursement policy. CMS lowered the conversation factor by .02% to reflect a relative value unit budget neutrality adjustment. Further, there was an additional .77% decrease from CMS to meet cost-savings targets. CMS only corrected enough misvalued codes for a savings of .23% according to the rule. Because it fell short of the 1% mark, it is obliged under the Protecting Access to Medicare Act to reduce total fee-for-service spending on physicians by .77% to make up the difference.
Value Modifier
The Value-Based Payment Modifier (Value Modifier) provides for differential payments under the Fee Schedule to physicians, groups, and other eligible professionals based on the quality and cost of care they furnish to beneficiaries enrolled in the traditional Medicare fee-for-services program. Under the Value Modifier, performance on quality and cost measures can lead to increased payments for those who provide high quality, efficient care. However, it also can mean decreased payment adjustments for low-performing physicians and eligible professionals who underperform. The Value Modifier expires at the end of CY 2018 as the new Merit-Based Incentive Payment System starts in CY 2019.
This year, CMS finalized several provisions, including a decision to apply the Value Modifier to non-physician eligible professionals who are Physician Assistants, Nurse Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists in groups and to these professionals who are solo practitioners, in the CY 2018 adjustment period. Additionally, CMS will continue to set the maximum upward adjustment under its quality-tiering methodology for the CY 2018 Value Modifier at +4.0 times an adjustment factor for groups of physicians with ten or more eligible professionals, +2.0 times an adjustment factor for groups of physicians with between two to nine eligible professionals and physician solo practitioners, and +2.0 times an adjustment factor for groups that consist of non-physician eligible professionals and solo practitioners, like physician assistants. However, at risk is a possible -4.0 adjustment for groups of physicians with ten or more eligible professionals, -2.0 percent for groups of physicians between two to nine eligible professionals and physician solo practitioners, and -2.0 percent for groups consisting of non-physician EPs and solo practitioners like nurse practitioners and physician assistants.