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CMS Releases Final Rule for the CY 2016 Physician Fee Schedule

November 5, 2015—The Centers for Medicare and Medicaid Services (CMS) Oct. 30 released the first final rule updating payment rates and policies for services furnished under the Medicare Physician Fee Schedule (PFS) in 2016 since the repeal of the Sustainable Growth Rate (SGR) through the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA, P.L. 114-10). The rule finalizes changes to the Physician Quality Reporting System, the Value-Based Payment Modifier (VBM) program, and public reporting information on the Physician Compare website. The rule is effective Jan. 1, 2016.

The rule implements a 0.5 percent payment increase to fee schedule rates as a result of a provision under MACRA. However, this increase was offset by a reduction of 0.77 percent in the 2016 conversion factor due to the misvalued code initiative. Therefore, there will be a 0.27 percent reduction in the 2016 conversion factor, which is set at $35.8279 (the 2015 conversion factor is $35.9335). The amount of payment in 2016 for each service would vary depending on other factors in the fee schedule payment methodology, such as changes to work and practice expense relative values for specific services. 

CMS establishes the same criteria for satisfactory reporting under the Physician Quality Reporting System (PQRS) program that was established for the 2017 PQRS payment adjustment reflecting the agency’s efforts in making minimal changes and remaining consistent. However, one change to note is that CMS expanded the Qualified Clinical Data Registry reporting option to group practices. CMS also finalized the proposed Achievable Benchmark of Care methodology, which will be used to report publicly an item-level benchmark for group practice and individual eligible professionals (EPs) PQRS measures on the Physician Compare website. CMS will use this benchmark to assign stars systematically for the Physician Compare five star rating.

Additionally, physicians will now be able to bill for the Advanced Care Planning code allowing beneficiaries to have conversations with physicians both before an illness progresses and during the course of treatment to decide on the type of care that is right for them. This code will better enable seniors and other Medicare beneficiaries to have control over the type of care they receive and when they receive it.

The Value-Based Modifier program (Value Modifier) is set to expire in calendar year (CY) 2018 and be replaced by the Merit-Based Incentive Payment System (MIPS) beginning in CY 2019. CMS finalized the provision to expand the Value Modifier to non-physician EPs groups and solo practitioners, including: Physician Assistants (PAs), Nurse Practitioners (NPs), Clinical Nurse Specialists (CNS), and Certified Registered Nurse Anesthetists (CRNAs) during the CY 2018 payment adjustment period. Additionally, CMS finalized setting the amount of payment at risk for CY 2018 Value-Based Modifier to minus 4.0 percent for groups with 10 or more EPs and to minute 2.0 percent for groups with two to nine EPs and for non-physician EPs groups.

The rule also updates the physician self-referral regulations (Stark II) to facilitate health care delivery and payment systems reform and reduce burden. Other provisions regarding the Medicare electronic health records (EHR) incentive program and “incident to” services were also finalized.

The AAMC will hold a webinar to provide additional information about the provisions included in the final PFS rule in the coming weeks.

Contact:

Tanvi Mehta
Physician Payment & Quality Specialist, HCA
Telephone: 202-909-2020
Email: tmehta@aamc.org

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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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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org