2015 Physician Fee Schedule Proposed Rule: Value-Based Payments are Here to Stay

2015 Physician Fee Schedule
Proposed Rule:
Value-Based Payments are Here to Stay
Presented to:
Alabama Hospital Association, North Council
August 14, 2014
Alabama Hospital Association, Northeast Council
August 20, 2014
Prepared for Alabama Hospital Association, Northeast Council
August 20, 2014 Page 1

Agenda
2015 Proposed Physician Fee Schedule (“PFS”)
Highlights and “To-Dos”
7 Key PFS Policy Proposals
Summary and Questions

Highlights
• No payment updates,
only changes to
payment policies
– Still anticipate 20.9%
reduction in payments
without Congressional
action (Sustainable
Growth Rate)

Highlights
Value-Based Payment
Models are here to stay!

Key Policy Proposals
1. Physician Quality Reporting System (“PQRS”)
& the Value Based Payment Modifier (“VBPM”)
2. Chronic Care Management
3. Elimination of Global Surgery Payments
4. Misvalued Codes
5. Expansion of Telehealth Services
6. Care Site Payments
7. Medicare Shared Savings Program Update

1. Physician Quality Reporting
System
• Shift to downward
adjustments rather
than rewards (2015)
• Additional measures
can be reported to fill
gaps
– Emphasis on inclusion
for specialists
• New cross-cutting
metrics  choose 2
of 18
• Should be broadly
applicable between
providers

1. Physician Quality Reporting
System
Financial Incentives and Penalties Related to Physician Quality Reporting System (“PQRS”)
2013 2014 2015 2016 2017
0.5% 0.5%
2013 2014 2015
-1.0% -1.0%
Note: Adjustment amounts in the years noted above reflect participation two years prior to adjustment year.
-2.0%
-4.0%
Payment/Penalty Year
Participation/Reporting Year
Current Adjustment
Proposed Adjustment

1. Value Based Payment Modifier
• New designations for 2017 VBPM Score:
Category 1: Successfully report PQRS, subject to
quality tiers (-/0/+)
Category 2: Do not report PQRS (automatic -4%
PQRS and -4% VBPM penalty

1. Value Based Payment Modifier
Number of
Providers
2015 2016 (Proposed) 2017
1-9 No Adjustment No Adjustment
10-99 No Adjustment
Penalty for PQRS Non-
Reporting
Negative Adjustment
Based on Performance
100+
Source: Advisory Board, Highlights from the 2015 Proposed Medicare Physician Fee Schedule
Positive Adjustment
Based on Performance

1. PQRS and VBPM
• Medical groups
must report their
own performance
• CMS also tracks
claims data
PQRS
Group Providers
into Tiers
• Risk adjustment for
providers and
groups
• Comparisons made
to national
averages
• High performers =
payment increase
• Low performers =
payment
deduction
• Budget Neutral
VBPM

1. PQRS and VBPM
Why This Matters
• Physician Compare website
– Quality measures will soon be reported to public
(some data to begin in late 2014, more in 2015
and 2016)
– Reputation Management

1. PQRS and VBPM
Why This Matters
• Before: Maximum 2% penalty
• Proposed: Maximum 8% penalty
A group practice with 150 providers may have previously faced a $250,000
penalty to not participate in PQRS. That same decision under the proposed
rule could now have a financial impact of more than $1 million in penalties,
without considering the reputational impact of not reporting.

1. PQRS and VBPM
How to Prepare
• Receive QRUR and digest information
• Educate physicians
• Understand opportunities for improvement
• Prepare for complete transparency

• Added staffing
flexibility: general
physician supervision
required, not direct
supervision
• Certified EHR
technology (CEHRT)
is required

• For patients with two or more chronic
conditions (as finalized in CY 2014 PFS):
– Non-face-to-face care management service
– Think home healthcare plan management –
documentation requirements
– Reimbursement is set at $41.92
– Billed no more frequently than 1x per month

Why This Matters
• Natural fit for Patient Centered Medical Home
• “Chronic Condition” is not explicitly defined or
limited to the “usual” (COPD, DM, etc.) – may
apply to specialists if they manage 2+ chronic
conditions

Why This Matters
• Can utilize non-physician providers to
improve patient flow
• Per Member Per Month (PMPM) revenue
stream

Potential Chronic Care Management Annual Revenue
Description
50th
Percentile Average Formula
Annual Patients per Physician1 2,907 3,279 A
Percentage Medicare1 21.7% 21.9% B
Annual Medicare Patients 632 716 C = A*B
Percentage Eligible for CCM2 68.6% 68.6% D
Annual Eligible CCM Patients 433 491 E = D*C
CCM Monthly Reimbursement3 $ 41.92 $ 41.92 F
Annual Impact per Physician $ 217,987 $ 247,240 G = (F*12)*E
1 Per the MGMA Cost Survey for Single Specialty Practices: 2013 Report Based on 2012 Data specific
to the specialty of family medicine.
2 CMS.gov - County Level Multiple Chronic Conditions (MCC) Table: 2012 Prevelance, National Average
3 Reimbursement amount from the CY 2015 Physician Fee Service Proposed Rule with Comment
Period .

How to Prepare
• Ensure properly certified EMR is in place
• Educate physicians and identify where
appropriate
• Explore best practices for patient care
delivery, including non-face-to-face visits

3. Global Surgery Payments
• Rule would eliminate 10- and 90-day
surgery codes
• Cites Office of the Inspector General for
justification
• Would begin in 2017 for 10-day and in
2018 for 90-day

• CMS believes that it is overpaying for follow-up
care, i.e. that global includes service plus
an imputed number of follow-up visits and
that the actual number of visits is less
• CMS seeks to establish RVUs that reflect the
change in the global period

• Proposal would require physicians to bill the
day of surgery and any subsequent
encounters separately
– CMS is seeking comment on means to ensure
separate E/M payments do not incentivize
unnecessary office visits, plans to monitor
utilization of E/M visits following implementation

How To Prepare
• Track post-op visits in practice management
system
• Keep on radar for provider and biller
education
• Evaluate financial impact when 2017 PFS is
released

4. Misvalued Codes
• Proposes to add nearly 80 codes to potentially
misvalued list
• CMS continues to review high-expenditure services
• Budget-neutral reimbursement reallocation

Specialty Payment Changes
Budget-Neutral Reallocation
Specialty 2015 Potential
Payment Impact
Independent Lab 3%
Family Practice 2%
Internal Medicine 2%
Cardiology 1%
Nuclear Medicine 1%
Neurosurgery 1%
Infectious Disease 1%
Hematology
/Oncology
1%
Geriatrics 1%
Payment Impact
Radiation Therapy
Center
-8%
Radiation Oncology -4%
Diagnostic Testing
Facility
-2%
Radiology -2%
Ophthalmology -2%
Interventional
Radiology
-1%
Clinical Psychology -1%
Cardiac Surgery -1%
Payment Impact
Orthopedic
Surgery
0%
Anesthesiology 0%
Colon and Rectal
Surgery
0%
Dermatology 0%
Endocrinology 0%
Ob/Gyn 0%
Pediatrics 0%
Gastroenterology 0%
Nephrology 0%
Neurology 0%

5. Telehealth Services
• Expanded telehealth
services (new
codes):
– 90845 (psychoanalysis)
– 90846 & 90847 (family
– 99354 & 99355 (prolonged
– G0438 & G0439 (annual
psychotherapy)
service in the office)
wellness visit)

Why This Matters
• Additional opportunities to reach patients
outside of geographic service area
• Blends closely with CCM and other care
models
• Facilitates access to certain specialties that
may be difficult to recruit and staff

How To Prepare
• Monitor commercial payers and their stance
(BCBSAL)
• Consider possibilities for specialty coverage/
cost-benefit analysis
• Inform providers and consumers of new
opportunities

• CMS will begin collecting data
• Modifier would be required for services
furnished at an off-campus department
• CMS can identify where services are moved
to higher-paid outpatient departments

• MedPac Report to
Congress in 2014
– Recommends
• No CMS payment
changes… yet.
reduction of HOPD
nearer to MPFS level

How to Prepare
• Continue to monitor – calculate potential
decrease before large capital investment or
restructuring to facility-based
• Evaluate employment agreements, especially
for specialists
• Be strategic about facility planning
• Control costs

7. Medicare Shared Savings Program
• Updated quality
measures
• Revised clinical
guidelines
• Reward year-to-year
improvements
• Seeking comment on
future quality measures

Summary
1
2
3
4
5
6
7
PQRS participation is critical to avoid negative adjustment and to achieve a positive value-based
payment modifier (Reputational & Financial Risk).
Chronic Care Management poses a significant opportunity for service revenue capture and
overlaps well with other programs (e.g. Transitional Care, Patient Centered Medical Home).
The potential ending of global surgery payments may impact future revenue.
CMS will continue to target misvalued codes (e.g. radiation therapy center payments) and
reallocate payments among specialists with budget neutrality.
The addition of several new billable codes for telehealth services provides a new avenue to
deliver care.
CMS wants to learn more (collect data) about payments at hospital outpatient departments.
Payment changes possible in the future.
The Medicare Shared Savings Program continues to grow and will now reward year-to-year
improvements.

Moving Forward…
July 3:
2015 PFS
Proposed Rule
Released
July 3 – Sept. 4:
Public comment
period
Late Nov.:
2015 PFS
Final Rule
Jan. 1:
2015 PFS
takes
effect
Apr. 1:
Current “Sustainable
Growth Rate Fix” due
to expire

Questions?

Thank You!
Lori Foley
Principal
Pershing Yoakley & Associates, P.C.
(404) 266-9876
lfoley@pyapc.com
www.pyapc.com
Pershing Yoakley & Associates, P.C.
Chris Beckham
Senior Manager
(706) 248-6131
cbeckham@pyapc.com
www.pyapc.com

2015 Physician Fee Schedule Proposed Rule: Value-Based Payments are Here to Stay

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