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Medicare Proposes Reform to Boost Physician Payments and Quality of Care

by | Sep 21, 2013 | Medical Coding News, Resources | 0 comments

In the 2014 Medicare Physician Fee Schedule (PFS) published July 8, the Centers for Medicaid and Medicare (CMS) have detailed a payment increase for physicians managing patients with chronic conditions. According to the proposed rule, CMS will bring in a separate payment for complex chronic care management services starting 2015. CMS stated that this proposal is part of a “multiyear strategy to appropriately recognize and value primary care and care management services”. Changes have been proposed to bring more physicians under the pay-for-performance initiative.

Despite an extended life span, Americans face multiple medical conditions which make healthcare complex and challenging. Physicians describe patient complexity in terms of a wide range of factors that include physical and mental health as well as social factors and financial issues. In fact, the definition and measurement of patient complexity is extremely significant for the organization of care, payments to physicians and health care systems, and the allocation of resources.

Features of the New Medicare Payment Proposals

Presently, Medicare reimbursements are made only for primary care management services as part of a face-to-face visit. CMS now proposes to pay for non-face-to-face complex chronic care management services for Medicare beneficiaries who have multiple (two or more) significant chronic conditions. Under the proposed PFS, complex chronic care management services comprise regular physician development and revision of a plan of care, communication with other treating health professionals, and medication management.

In the 2013 final PFS, Medicare started a care coordination service aimed at making payments for the work done by physician practices to guide patients from facilities to their homes. To establish codes and separate payment for complex chronic care management services, the latest regulation floated a plan to create two additional complex services that could be billed separately from patient visits: managing care for a patient with two or more chronic conditions expected to last at least 12 months, or until death, and that put the patient at risk. The first complex chronic care management service is to be billed for an initial visit and the second, for subsequent treatment and care.

If the new services are finalized later this year, CMS stated that physicians cannot bill them until 2015. CMS has also laid down the conditions which physician practices should meet to provide the new services:

The patient must have had an annual Medicare wellness visit within the last 12 months

The practice must have implemented an electronic health record and should demonstrate meaningful EHR use that meets CMS standards. Practice staff should include one or more advanced practice registered nurses or physician assistants with complex chronic care management experience.

The public have until September 6, 2013 to submit comments to CMS on these new proposals. It is expected that CMS will finalize new payment policies in November.

A Welcome Step, but Repeal SGR says the Medical Community

An American Medical News release reports that the initial reaction to the 2014 PFS has been positive. Physicians are lauding CMS for this important step that recognizes the entirety of primary care, particularly of complex chronic care management. They see these developments as indicative of the agency’s commitment towards primary care, cognitive services and the patient-centered medical home model. With the adjustment of misvalued codes and the proposal of two new codes for complex chronic care management, CMS is seen as having taken an important step towards meaningful Medicare physician payment reform and meaningful health system reform.

However, the SGR (sustainable growth rate) formula is still a matter of concern. The SGR is expected to cut physician pay for Medicare services by 24.4% in January 2014. Jeffery Cain, president of the American Academy of Family Physicians, has pointed out that the payment gains of 2% to 3% offered by the 2014 fee schedule would be more than wiped out by the SGR. Draft legislation to repeal SGR is moving forward rapidly in the U.S. House of Representatives and got unanimous approval in committee markup on July 31.

Increasing Focus on Quality of Care

CMS has put forward many proposals to improve quality in Medicare, which are expected to take shape in 2014:

  • Expansion of the Physician Compare website with more information on Medicare physician groups and individual performances.
  • Tripling of the minimum number of individual physician quality reporting system (PQRS) measures which physicians must report to earn incentives, from three to nine. Physicians meeting PQRS criteria are eligible for a 0.5% bonus in 2014.
  • Elimination of the claims-based reporting option for measures groups so that registry reporting is the only mode for using the measures groups option.
  • Use of 2014 PQRS reporting by the 2016 value-based payment modifier or Medicare’s pay-for-performance effort to determine payments for groups with 10 or more physicians and other eligible professionals.
  • A penalty in 2016 for physicians who do not successfully report the minimum number of measures (based on the 2014 PQRS reporting period).

Many studies have shown that an efficient primary care sector has a strong association with improved healthcare quality and lower cost. If the proposed legislation can encourage more physicians to meet Medicare’s requirements and offer complex chronic care management services, it will certainly constitute a stepping stone towards a more efficient and affordable healthcare system.