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

Page 1August 20, 2014

Prepared for Alabama Hospital Association, Northeast Council

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 CouncilAugust 20, 2014



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

2013 2014 2015 2016 2017

0.5% 0.5%

-1.0% -1.0%

-2.0%

-0.04

Current AdjustmentProposed Adjustment

2013 20152014

Payment/Penalty Year

Participation/Reporting Year

Financial Incentives and Penalties Related to Physician Quality Reporting System (“PQRS”)

Note: Adjustment amounts in the years noted above reflect participation two years prior to adjustment year.



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 ModifierNumber of Providers

2015 2016 (Proposed) 2017

1-9 No Adjustment No Adjustment

10-99 No Adjustment

100+

Source: Advisory Board, Highlights from the 2015 Proposed Medicare Physician Fee Schedule

Penalty for PQRS Non-Reporting

Negative Adjustment Based on Performance

Positive Adjustment Based on Performance



1. PQRS and VBPM

• Medical groups must report their own performance• CMS also tracks claims data

PQRSSource: Advisory Board, Highlights from the 2015 Proposed Medicare Physician Fee Schedule



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

Description50th

Percentile Average Formula

Annual Patients per Physician1 2,907 3,279 A

Percentage Medicare1 21.7% 21.9% BAnnual Medicare Patients 632 716 C = A*B

Percentage Eligible for CCM2 68.6% 68.6% DAnnual 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)*E1 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 Average3 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 ChangesBudget-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%


Radiation Therapy Center

-8%

Radiation Oncology -4%

Diagnostic Testing Facility

-2%

Radiology -2%

Ophthalmology -2%

Interventional Radiology

-1%

Clinical Psychology -1%

Cardiac Surgery -1%


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%

Source: Advisory Board, Highlights from the 2015 Proposed Medicare Physician Fee Schedule



5. Telehealth Services

• Expanded telehealth services (new codes):– 90845 (psychoanalysis)

– 90846 & 90847 (family psychotherapy)

– 99354 & 99355 (prolonged service in the office)

– G0438 & G0439 (annual 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 reduction of HOPD nearer to MPFS level

• No CMS payment changes… yet.




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



Summary1

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

[email protected]

www.pyapc.com

Chris Beckham

Senior Manager

Pershing Yoakley & Associates, P.C.

(706) 248-6131

[email protected]

www.pyapc.com

Healthcare

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