Earlier this year, the Centers for Medicare and Medicaid Services (CMS) proposed a rule to implement a provision of the Affordable Care Act (ACA), as included in section 1202 of the Health Care and Education Reconciliation Act of 2010, which provides increased payments for certain Medicaid primary care services.
Under this provision, certain physicians that provide eligible primary care services would be paid the Medicare rates in effect in calendar years (CY) 2013 and 2014 (or if greater, the Medicare rate in effect in 2009) instead of their usual state-established Medicaid rates, which may be lower than federally established Medicare rates.
Increased payment applies to primary care services delivered by a physician with a specialty designation of family medicine, general internal medicine, or pediatric medicine or related subspecialists. States will receive 100 percent Federal financial participation (FFP) for the difference between the Medicaid State plan payment amount as of July 1, 2009 and the applicable Medicare rate. The increase applies to a specific set of services and procedures that CMS designates as “primary care services”.
The proposed rule provides information about how CMS and States will work together to make the increased payments operational. The guidance includes information about the identification of eligible providers and services and how to meet the statutory requirements when making these payments for services provided through managed care. The guidance also provides important information on how this policy applies to the Vaccines for Children (VFC) program, which has its own statutory requirements for billing and payment.
Qualifying Providers
Under the ACA, primary care services eligible for the higher payment would be delivered by a physician who specializes in family medicine, general internal medicine, or pediatric medicine. In the proposed rule, we clarify that subspecialists related to these primary care specialists qualify for the enhanced payment. We also clarify that services must be delivered under the Medicaid physician services benefit. This means higher payment would be made for primary care services rendered by practitioners—including, for example, nurse practitioners—working under the supervision of any qualifying physician and billing under that physician’s Medicaid provider number.
Implementing the Increased Payments in Fee for Service and Managed Care
The proposed rule would allow States two options: (1) “lock” rates at the level of the Medicare physician fee schedule in effect at the beginning of 2013 and 2014; or (2) modify the rates in alignment with all updates made by Medicare. The regulation provides that all of the requirements related to the increased payments apply to services reimbursed by Medicaid managed care plans. We propose that States incorporate the increased payment into contracts with such entities.
Interaction with the Vaccines for Children Program
The rule proposes payment of vaccine administration fees under the VFC program at the lesser of the VFC regional maximum administration fee (the VFC “ceiling”) or the Medicare rates in 2013 and 2014, whichever rate is lowest. This is consistent with VFC program rules which limit payments to the VFC ceiling, which is the amount charged by the provider, and to one payment per vaccine administered. Because the VFC ceiling rates were issued on an interim basis in 1994 and have never been updated, we are proposing to update these rates by increasing them as indicated by the Medicare Economic Index (MEI), which is a measure of medical practice cost inflation.
CMS Increasing Payment to Family Physicians
CMS also recently announced a proposed rule that would increase payments to family physicians by approximately 7 percent and other practitioners providing primary care services between 3 and 5 percent. The increase in payment to family practitioners is part of the proposed rule that would update payment policies and rates under the Medicare Physician Fee Schedule (MPFS) for calendar year (CY) 2013. Under the MPFS, Medicare pays more than 1 million physicians and nonphysician practitioners that provide vital health services to Medicare beneficiaries.
“Helping primary care doctors will help improve patient care and lower health care costs long term,” said CMS Acting Administrator, Marilyn B. Tavenner.
The 7 percent increase for family physicians comes from a proposal that continues the Administration’s policies to promote high quality, patient-centered care. For CY 2013, CMS is proposing for the first time to explicitly pay for the care required to help a patient transition back to the community following a discharge from a hospital or nursing facility.
The proposals calls for CMS to make a separate payment to a patient’s community physician or practitioner to coordinate the patient’s care in the 30 days following a hospital or skilled nursing facility stay. The proposed rule also asks for public comment on how Medicare can better recognize the range of services community physicians and practitioners provide as part of treating patients either through face-to-face services in the office or coordinating care outside the office when the patient does not see the physician.
As has been the case every year since CY 2002, CMS projects a significant reduction in MPFS payment rates under the Sustainable Growth Rate (SGR) methodology due to the expiration of the adjustment made for CY 2012 in the statute. For CY 2013, CMS projects a reduction of 27 percent and is required by law to include this reduction in these calculations. However, Congress has acted to avert the cuts every year since 2003. The Administration is committed to fixing the SGR formula in a fiscally responsible way.
The proposed rule would also continue the careful implementation of the physician value-based payment modifier (Value Modifier) that was included in the Affordable Care Act by providing choices to physicians regarding how to participate. The Value Modifier adjusts payments to individual physicians or groups of physicians based on the quality of care furnished to Medicare beneficiaries compared to costs. The law allows CMS to phase in the Value Modifier over three years from CY 2015 to CY 2017. For the CY 2015 physician payment rates, the proposed rule would apply the Value Modifier to all groups of physician with 25 or more eligible professionals.
The proposed rule also provides an option for these groups to choose how the Value Modifier would be calculated based on whether they participate in the Physician Quality Reporting System (PQRS). For groups of 25 or more that do not participate in the PQRS, CMS is proposing to set their Value Modifier at a 1.0 percent payment reduction. For groups that wish to have their payment adjusted according to their performance on the value modifier, the rule proposes a system whereby groups with higher quality and lower costs would be paid more, and groups with lower quality and higher costs would be paid less. The performance period for the CY 2015 Value Modifier was established as CY 2013 in the MPFS Final Rule for CY 2012.
The proposed rule continues efforts by CMS to align quality reporting across programs to reduce burden and complexity. The proposed rule proposes changes to two quality reporting programs that are associated with the MPFS – the PQRS and the Electronic Prescribing (eRx) Incentive Program – as well as the Medicare Electronic Health Records (EHR) Incentive Pilot Program which promotes the use of health information technology.
The PQRS proposal includes simplified, lower burden options for reporting and the proposed rule aligns quality reporting across the various programs in support of the National Quality Strategy. The proposed rule also addresses the next phase in a plan to enhance the Physician Compare Website to foster transparency and public reporting of certain information to give beneficiaries more information for purposes of choosing a physician.
The proposed rule also includes:
- A proposal to include additional Medicare-covered preventive services on the list of services that can be provided via an interactive telecommunications system;
- A proposal to implement a durable medical equipment (DME) face-to-face requirement as a condition of payment for certain high-cost Medicare DME items;
- A proposal to apply a multiple procedure payment reduction (MPPR) policy to the technical component of the second and subsequent cardiovascular and ophthalmology diagnostic services furnished by the same doctor to the same patient on the same day;
- A proposal to collect data on patient function to improve how Medicare pays for physical and occupational therapy, and speech language pathology services;
- A request for public comments on payment for advanced diagnostic molecular pathology services;
- A proposal to revise a regulation that only allows Medicare to pay for portable x-rays ordered by an MD or DO. The revised regulations would allow Medicare to pay for portable x-ray services ordered physicians and non-physician practitioners acting within the scope of their Medicare benefit and state law;
- A proposal to clarify when Medicare will pay for interventional pain management services provided by Certified Registered Nurse Anesthetists (CRNAs) when permitted by State law. This proposal will foster access to pain management services in areas where states have determined that CRNAs may provide these services.
The proposed rule will appear in the July 30, 2012 Federal Register. CMS will accept comments on the proposed rule until Sep. 04, 2012, and will respond to them in a final rule with comment period to be issued by Nov. 1, 2012.
CMS also issued two other proposed rules. One of the proposed rules would increase payments to home healthcare agencies by 0.1%, or $20 million, in 2013. That rule also would establish new ways for agencies that are noncompliant with federal health and safety standards to improve their compliance, and it would allow CMS to levy alternative sanctions — besides termination from Medicare — against agencies that fail to meet the standards.
The other proposed rule would increase Medicare payments to hospital outpatient departments by 2.1% in 2013 and increase payments to ambulatory surgery centers by 1.3%. It also would make some changes to the quality reporting programs for both types of facilities.
Comment
At a recent meeting of Medicaid state directors it was brought up repeatedly that the increased reimbursement for primary care physicians serving Medicaid patients sets up a Medicaid payment cliff and will largely depend on future reauthorization. The increase in reimbursement will add some incentive to primary care physicians to accept Medicaid patients which is a real issue especially in areas with high demand and poor supply of physicians and other healthcare providers.