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Proposed 2014 Physician Fee Schedule Creates Complex Care Payment; Changes VBM

July 12, 2013—The Centers for Medicare and Medicaid Services (CMS) July 8 released a proposed rule for changes to the calendar year (CY) 2014 Physician Fee Schedule (PFS). The proposed rule includes changes to the Physician Quality Reporting System (PQRS), the Electronic Health Record Incentive Program (EHR), the Physician Compare Website, the Physician Value-Based Payment Modifier (VBM), and the Group Practice Reporting Option (GPRO). CMS will publish the proposed rule in the July 19 Federal Register. Comments are due Sept. 6.

The proposed rule contains changes for measure reporting under GPRO as part of PQRS. Groups with less than 100 eligible providers (EPs) would no longer be able to report measures using the GPRO web interface. CMS proposes the “certified vendor reporting option” for groups of 25 or more EPs. This new reporting mechanism would allow eligible groups to count the Clinician and Group Consumer Assessment of Healthcare Providers (CG-CAHPS) survey measures as satisfactory reporting for the 2014 PQRS incentive, thus avoiding the 2016 payment adjustment. A practice would be able to avoid the 2016 downward payment adjustment by reporting through one of the GPRO reporting options. This includes Accountable Care Organizations (ACOs) in the Medicare Shared Savings Program (MSSP).

CMS continues its refinement of the VBM. As proposed, groups of 10 or more EPs would be subject to the VBM in CY 2016 and to quality-tiering. As outlined in the 2013 PFS final rule, groups with 100 or more EPs will be subject to the VBM beginning in 2015 based on performance in CY 2013. For CY 2016, groups must satisfactorily participate in PQRS GPRO or at least 70 percent of EPs billing under the group must satisfactorily report data to PQRS individually to avoid the downward adjustment. Groups of 100 or more EPs would be subject to an upward, negative, or neutral payment adjustment. Additionally, the proposal increases the downward adjustment from 1.0 percent in CY 2015 to 2.0 percent in CY 2016. The agency also proposes to include the Medicare Spending per Beneficiary (MSPB) measure in the cost composite for the VBM beginning in CY 2016.

Significantly, CMS proposes an additional payment for complex care management services furnished to patients with multiple complex chronic conditions. Payable through two new G-codes in 2015, requirements include the development of a plan of care, coordination with home and community based providers, and multiple methods of non-face-to-face communication. In addition, the beneficiary must have had an annual wellness visit in the preceding 12 months furnished by the same practitioner billing for complex care management. These new codes may only be billed once per beneficiary, per 90-day period.

The proposed rule also lays out the agency’s plans for the next phase of publicly reporting physician performance data on the physician compare website. For 2014, CMS proposes to report all measures collected through the GPRO web interface for groups of all sizes participating in the PQRS GPRO. Data reported would have to meet the minimum sample size of 20 patients and be statistically reliable and valid. Group practices would have a 30-day review period prior to the public reporting of data. The above will also apply for ACOs participating in the MSSP.

The proposed rule also proposes Relative Value Unit (RVU) updates for more than 200 codes as well as changes to the Geographic Practice Cost Indices (GPCIs).

In regard to the Sustainable Growth Rate (SGR), the proposed rule estimates that physician payments would face a 24.4 percent cut in CY 2014 unless Congress acts to avoid this cut as it has in the past.

The AAMC will be submitting a comment letter.


Mary Patton Wheatley, M.S.
Director, Health Care Affairs
Telephone: 202-862-6297

Evan Collins, MHA
Specialist, Clinical Operations and Policy
Telephone: 202-828-0552


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806