CY2014 FINAL PAYMENT RULES RELEASED

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On November 27, the Centers for Medicare and Medicaid Services (CMS) released the CY2014 Physician Fee Schedule (PFS) Final Rule, and the CY2014 Hospital Outpatient Prospective Payment System (HOPPS) / Ambulatory Surgical Center (ASC) Final Rule.

Together, the American Society for Gastrointestinal Endoscopy (ASGE), the American College of Gastroenterology (ACG) and American Gastroenterological Association (AGA) are analyzing both rules and, in the weeks ahead, will provide our members with the detailed information necessary to begin preparing their practices for these payment and policy changes. 

Our societies were extremely disappointed in CMS' reimbursement rates for GI endoscopy services in the final rule.  In the coming weeks, our societies will be exploring all options to mitigate these cuts, including approaching CMS with our concerns regarding its final determination of RVUs for GI endoscopy procedures in the final rule. 

Major Provisions in the CY 2014 Medicare Physician Fee Schedule

• Physician Payment Update
• Misvalued Code Initiative
• Capping Physician Office Payments at Facility Rates
• Physician Quality Reporting System and Value-Based Payment Modifier

Major Provisions in the CY 2014 HOPPS/ASC Payment

• ASC Payment Update
• ASC Quality Reporting Program
• New OPPS Packaging Policy  

Absent congressional intervention, the conversion factor for calculating physician fees under the sustainable growth rate (SGR) formula will be cut by 20.1%.  When adjustments to the relative value scale are combined with the conversion factor change, the net reduction in payment rates will be about 24% effective January 1, 2014. As has been the case every year since 2003, Congress has overridden scheduled PFS reductions due to the SGR. The final rule states, however, that a long-term solution to the SGR is needed.

Not including the effect of the negative January 2014 conversion factor change under current law, the 2014 impact on total allowed charges for gastroenterology is as follows:

 While the overall impact to gastroenterology is -2%, the impact of this reduction on individual physicians will be based on a practice's mix of GI services. 

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Misvalued Code Initiative

When CMS mandated the GI societies to resurvey all of the major endoscopy code families through its misvalued code initiative, the challenge to maintain the past value of endoscopic services was clear. When work Relative Value Units (RVUs) of a physician service are reevaluated by the American Medical Association Relative Value Update Committee (RUC), procedures can never gain more value unless there is "compelling evidence" that something about the procedure, the work of the procedure, or patient population has changed causing an increase in physician work.

For the past year and a half, our societies have been working tirelessly within the RUC process to ensure a reasonable valuation of GI endoscopy codes under review. We are extremely disappointed that CMS did not accept most of the RUC-approved values for the endoscopy services in the final rule. In the coming weeks, our societies will be exploring all options to mitigate these cuts, including approaching CMS with our concerns regarding its final determination of RVUs for GI endoscopy procedures in the final rule. 

The GI societies understand that these cuts come at a time when physicians are being required to be in compliance with several Medicare initiatives including quality programs and the transition to ICD-10. In the coming weeks and months, our societies will be working together to help our members prepare their businesses for the payment and compliance changes ahead.   

Estimated Loss to GI by Code Families

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Top Ten Impacted GI Codes by Volume*

Surgical pathology service codes 88304 and 88305 were also reviewed by CMS.  The work RVUs stayed the same; however, there were minor reductions in practice expense.  Our societies will provide more information regarding these reductions after further analysis.  

Capping Physician Office Payments at Facility Rates

In a major victory for medicine, CMS did not finalize its proposal to modify payments for nearly 200 codes for which the total PFS payment, when furnished in the office, exceeds the total Medicare payment when the service is performed in the hospital outpatient department or the ASC. CMS proposed to reduce the non-facility practice expense RVUs for individual codes so that the total non-facility PFS payment amount would not exceed the total Medicare payment made for the service in the facility setting. The GI societies challenged CMS' assumptions for the proposal and are pleased that the agency will take additional time to consider the numerous comments received by the public with plans to address the issue in future rulemaking.

This proposal would have reduced payment by 50% or more, potentially driving these services out of the physician office and requiring patients to acquire these services in the more costly facility setting.

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Physician Quality Reporting System & Value-Based Payment Modifier Programs

The final rule includes changes to the Physician Quality Reporting System (PQRS) and Value-Based Payment (VBP) Modifier programs effective for the 2014 performance period. Most notably, CMS has finalized modifications to PQRS that could make it more difficult for some physicians to earn the 2014 0.5% incentive payment and has expanded application of the VBP modifier to physicians in groups of 10 or more eligible professionals for the 2016 payment year.

Because PQRS participation is linked to the VBP modifier, physicians in groups of 10 or more eligible professionals are at risk for a total -4.0% payment adjustment in 2016 for failure to successfully participate in PQRS during the 2014 performance period, which is January 1 through December 31, 2014.

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Key Modifications to PQRS for 2014 Reporting:  

• Individual eligible professionals who submit individual PQRS measures via claims or qualified registry must report 9 measures covering 3 National Quality Strategy (NQS) domains and report the measure for at least 50% of Medicare Part B patients to earn a 2014 incentive payment. 

• Group practices with 2 or more eligible professionals that participate in PQRS through the Group Practice Reporting Option (GPRO) and choose the qualified registry reporting option must report at least 9 measures covering at least 3 quality domains to earn a 2014 incentive payment. 

• Individual eligible professionals and group practices with 2 or more eligible professionals will continue to have the option of reporting 3 PQRS measures on 50 percent of Medicare Part B patients to avoid the 2016 payment adjustment. 

• The PQRS measure list includes four colonoscopy measures, including a new measure:  Screening Colonoscopy Adenoma Detection Rate. 

2014 PQRS Reporting Mechanisms and Requirements*

* Please refer to the final rule for additional details, including information about the Web interface reporting mechanism for group practices under the GPRO.  

Key Modifications to the VBP Modifier for the 2016 Payment Year:

• The VBP modifier will apply to groups of physicians with 10 or more eligible professionals. 

• Categorization of physicians subject to the VBP modifier will be based on a group's participation in PQRS. 

• Groups of physicians that do not meet the criteria for satisfactory reporting of data on PQRS quality measures through the GPRO for the 2016 payment adjustment will be placed in Category 2 and will have their VBP modifier set at -2.0%. 

• Groups of physicians that satisfactorily report PQRS data for the 2016 payment adjustment will be placed in Category 1 and will have their VBP modifier determined under a quality-tiering methodology. Groups of physicians with 10-99 eligible professionals will be held harmless from any downward adjustments. The downward adjustment for groups of 100 or more eligible professionals will be capped at -2.0%. 

• As an alternative to participation in PQRS as a GPRO for the purpose of the VBP modifier, groups of physicians that have at least 50% of the group's eligible professionals meet the criteria for satisfactory reporting of data on PQRS quality measures as individuals will be placed into Category 1. 
  
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For 2014, CMS will increase payment rates under the ASC payment system by 1.2%. CMS will continue to use the Consumer Price Index for All Urban Consumers (CPI-U) for calculating the update. The increase is based on a projected CPI-U update of 1.7% minus a multifactor productivity adjustment required by the Affordable Care Act that is projected to be 0.5%, resulting in the 1.2% update. Comparatively, the 2014 hospital outpatient department update is 1.7 percent. Our societies continue to argue that the CPI-U is not an appropriate update factor for ASCs and are seeking congressional intervention for a more appropriate inflationary index.

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ASC Quality Reporting Program

CMS finalized the addition of two endoscopy/polyp surveillance quality measures for the ASC Quality Reporting (ASCQR) Program for the CY 2016 payment determination and subsequent years:

• Appropriate follow-up interval for normal colonoscopy in average risk patients; and
• Colonoscopy interval for patients with a history of adenomatous polyps - avoidance of inappropriate use. 

Data collection for these measures will begin in CY 2014 and will be reported online through the QualityNet website in 2015. CMS initially proposed that ASCs report these measures on all patients through QualityNet.  Our societies are pleased that CMS acknowledged the administrative burden this would have created and will permit ASCs to collect information on a sample of eligible patients, with minimal case number requirements. The sampling specifications for the new ASCQR Program quality measures will be included in the ASCQR Specifications Manual, which will be made available on the QualityNet website in December 2013.

The minimum threshold for successful reporting will remain the same, which is at least 50% of claims meeting measure specifications. ASCs that fail to meet the ASCQR Program requirements will receive a -2.0% payment adjustment.

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New OPPS Packaging Policy  

For 2014, CMS finalized five new categories of supporting items and services rather than the seven proposed. For certain cases, a separate payment would be made if the item or service is furnished on a different date of service as the primary service. The five final categories are: 

1. Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure;
2. Drugs and biologicals that function as supplies; when used in a surgical procedure, including skin substitutes. Skin substitutes will be classified as either high cost or low cost and will be packaged into the associated surgical procedures with other skin substitutes of the same class;
3. Certain clinical diagnostic laboratory tests;
4. Certain procedures described by add-on codes;
5. Device removal procedures.

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CMS did not include procedures described by add-on codes or diagnostic tests on the bypass list in the final categories as initially proposed.

More Information

Additional information on the final rule will be posted on our websites. In the meantime, questions should be directed to Lakitia Mayo, ASGE, Director of Health Policy and Quality, at 630-570-5641 or lmayo@asge.org; Brad Conway, Vice President of Public Policy, ACG, at 301-263-9000 or bconway@gi.org; Elizabeth Wolf, Director of Regulatory Affairs, AGA, at 240-482-3223 or ewolf@gastro.org.  

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