Medicare finalizes physician pay for new care coordination benefit

Washington The Medicare program starting in January 2013 will pay doctors for care coordination services when transferring patients to skilled nursing facilities, according to new coverage policy detailed in the final Medicare physician fee schedule published Nov. 1.

The new service was one of myriad Medicare payment changes finalized in the annual regulation announcing program rates for the next year. As required by statute, the fee schedule includes an across-the-board sustainable growth rate cut to physician pay, a reduction that federal officials calculated at 26.5%. Congress has prevented similar SGR cuts for several years, but new legislation must be approved by a lame-duck Congress before Jan. 1, 2013, to stop the latest reduction.

The fee schedule includes other rate cuts to some physicians, such as lower payments for multiple advanced imaging scans and penalties for not submitting quality measurements to the Centers for Medicare & Medicaid Services. But CMS also finalized additional hardship exemptions the doctors can use to prevent pay reductions for not reporting electronic prescribing activity, and it further limited the number of physicians who will have their rates adjusted according to quality and cost scores by a value-based payment modifier in 2015.

The American Medical Association had called on CMS to adopt new coverage for transitional care management services, such as discussing a care plan and supporting a treatment or medication regimen. An AMA work group of the CPT Editorial Panel and the AMA/Specialty Society Relative Value Scale Update Committee members had recommended the new services.

“The AMA appreciates that CMS recognizes the value of these services for improving the overall quality of health, as this rule supports physicians working in emerging models of care and the work involved in transitioning patients from one care setting to the next,” said AMA President-elect Ardis Dee Hoven, MD.

CMS expects to spend about $600 million on the new service in 2013. Physicians can bill one of two codes, depending on the complexity of the service provided. The higher-level billing code requires a face-to-face visit with the patient within a week of discharge and would pay roughly $230 if the SGR cut were prevented. The lower-level code includes a face-to-face visit within two weeks and would pay about $160.

“We appreciate the fee schedule’s inclusion of new payments for care coordination after hospitalization that CMS estimates would increase payments to family physicians by 7%,” said Jeffrey Cain, MD, president of the American Academy of Family Physicians.

The CMS final calculation of the 2013 SGR cut at 26.5% is slightly lower than its initial projection, but it still is so large that it would negate any increase to a particular specialty from other elements of the fee schedule and further drive down pay for others who are lined up for net rate reductions.

Lawmakers have discussed a temporary delay of the pay reduction as part of an overall package addressing unresolved fiscal issues before Dec. 31. Lawmakers are scheduled to return to Washington on Nov. 13.

“The release of the Medicare physician fee schedule rule reminds patients, physicians and Congress that the time to act to prevent looming Medicare cuts is now,” Dr. Hoven said. “Without quick congressional action, physicians who care for Medicare patients will be hit with a 26.5% cut in payments on Jan. 1 due to the flawed Medicare physician payment formula. Eliminating this failed formula will allow us to enter a period when physicians can begin transitioning to new payment and delivery models to help meet the overall goal of improving patient care and moving to a higher-performing Medicare program. We look forward to fully reviewing the rule in more detail.”

Changes to quality reporting programs

The Medicare agency altered a number of policies proposed in its draft version of the rule on July 6. CMS detailed its plans, for instance, for implementing a value-based modifier required by Congress to adjust physician pay based on the quality and cost of care beginning in 2015.

CMS had proposed that physicians practicing in groups of 25 or more health professionals be subject to the modifier. Organized medicine groups, including the AMA and AAFP, advocated for raising the threshold, and the agency agreed to increase it to groups with 100 or more health professionals.

Any eligible physician who does not report physician quality reporting system measures in 2013 stands to have his or her pay reduced by 1.5% in 2015. A physician practicing in a larger group who does not report PQRS measures could have 2015 pay reduced an extra 1% by the modifier. Successful PQRS reporters in larger groups will be spared from an automatic modifier reduction, but they also can choose to have the modifier apply. That choice carries the risk of a modifier reduction but could result in higher pay for participants that better control Medicare spending and boost quality relative to their peers.

The amount of any modifier increase would depend on a number of factors, including how many eligible doctors decide to participate in PQRS and volunteer for the modifier.

The Medicare agency also finalized two additional exemptions to the 2014 penalty of 2% for failure to prescribe electronically in 2013. The new exemptions, which must be filed by June 30, 2013, are for physicians who demonstrate meaningful use of an electronic health record but who did not report the Medicare services during which they e-prescribed.

Absent an exemption, the penalty can be prevented by reporting e-prescribing activity to CMS at least 10 times before the June 30 deadline. Reporting paperless medication orders at least 25 times in 2013 will earn a physician a 0.5% bonus.

Lower pay for advanced imaging

A multiple procedure payment reduction rule was expanded to include more advanced imaging services in the final fee schedule. The policy lowers rates by 25% for interpreting subsequent scans provided to the same patient on the same day — including instances in which two physicians in the same practice interpret images for the same patient during an office visit.

“Interpretation of these scans many times requires expertise of different physicians,” said Paul Ellenbogen, MD, chair of the American College of Radiology Board of Chancellors. “These cuts discourage doctors from working as a team, which is the direction that health care is supposed to be going, and pull the rug out from under physicians working to save these people’s lives.”

The fee schedule also sets lower payments for the professionals providing certain diagnostic cardiovascular and ophthalmology screenings.