Search
Certified Public Accountants
& Business Consultants

Focus on Healthcare: CMS Releases 2016 Calendar Year Changes to the Medicare Physician Fee Schedule

Contact Our Team

In November, the Centers for Medicare & Medicaid Services (CMS) released the new Physician Fee Schedule (PFS). The PFS sets forth the payments physicians and other practitioners receive for their various services, including but not limited to, office visits, surgical procedures, diagnostic tests and certain preventative services. Payments are based on the relative resources that are typically necessary to provide a service. Relative value units are applied to each service provided by the physician, in addition to factoring in practice expense and malpractice.
January 18, 2016

In November, the Centers for Medicare & Medicaid Services (CMS) released the new Physician Fee Schedule (PFS). The PFS sets forth the payments physicians and other practitioners receive for their various services, including but not limited to, office visits, surgical procedures, diagnostic tests and certain preventative services. Payments are based on the relative resources that are typically necessary to provide a service. Relative value units are applied to each service provided by the physician, in addition to factoring in practice expense and malpractice.

Overall, the 2016 calendar year changes reflect the administration-wide strategy to create a healthcare system that results in better care, cuts unnecessary costs and ultimately leads to a healthier overall population. Some of the notable changes include the following.

Physician Quality Reporting System (PQRS)

There will be various modifications to PQRS where individual eligible professionals and group practices report information on the quality of care provided to Medicare. CMS is finalizing the requirements for the 2018 PQRS payment adjustment which will be consistent with the 2017 PQRS payment adjustment requiring the reporting of nine measures covering three national quality strategy areas. Failure to satisfactorily report or participate in PQRS for 2016 will result in a 2 percent negative payment adjustment being applied to applicable professional services furnished by that professional or group practice in 2018.

The proposed changes to PQRS include adding measures where gaps exist and eliminating those that are duplicative or those that will be replaced by more robust measures. It is estimated that there will be 281 measures in the PQRS measure set and 18 in the GPRO web interface for 2016. The 2018 PQRS payment adjustment is the last adjustment that will be issued under the PQRS. Beginning in 2019, the adjustments to payment and quality reporting will fall under the Merit-Based Incentive Payment System as required by the Medicare Access and CHIP Reauthorization Act of 2015.

Physician Compare

Physician Compare is a CMS website that helps individuals choose physicians and other health care professionals enrolled in Medicare so that they are able to make informed choices about their health care. Currently users can compare group practices, however in the future they will be able to compare individual physicians and other healthcare professionals. On Physician Compare, users can find a physician’s address, primary and secondary specialties, Medicare assignment status, American Board of Medical Specialties (ABMS) board certifications, gender, medical school education and residency information and hospital affiliation.

The 2016 PFS final rule continues the phased approach to ensure public reporting so that consumers can make more informed decisions. CMS is finalizing a proposal to publicly report an item (or measure) level benchmark for individual eligible professionals and group practices derived using the Achievable Benchmark of Care methodology. These benchmarks allow individuals to more easily evaluate the published information by providing a point of comparison between groups and between individuals, which will be displayed as a five-star rating system. The CMS has indicated that it will conduct an analysis and stakeholder outreach around this methodology and rating system prior to public reporting in 2017.

Value-Based Payment Modifier

The modifier provides for differential payments under PFS to physicians, groups of physicians and individual eligible professionals based on the quality and cost of care they provide to traditional beneficiaries enrolled in the traditional Medicare Fee-for-Service program. Under the value modifier system, overall performance on quality and cost measures can translate into increased payments for those able to provide high quality, efficient care and decreased payments to those who underperform. The value modifier is set to expire at the end of 2018 which will be replaced by a new, comprehensive programmed Merit-Based Incentive Payment System beginning in 2019.

For more information and additional proposed policy changes please click here.

 

Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.

All Healthcare News Healthcare Overview

For more information, please contact: