Preliminary Analysis of Medicare Physician Fee Schedule Proposed Payment Rule for CY 2017

Preliminary Analysis of Medicare Physician Fee Schedule Proposed Payment Rule for CY 2017

On Thursday, July 7, 2016, the Centers for Medicare and Medicaid Services (CMS) posted the Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2017 proposed rule. The proposed rule addresses changes and updates to the Medicare Physician Fee Schedule (MPFS) and other Medicare Part B payment policies to ensure that CMS payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. The proposed rule also includes proposals related to the Medicare Shared Saving Program, and the release of certain pricing data from Medicare Advantage bids, and new Medicare enrollment requirements for all Medicare Advantage providers. The proposed changes will be codified in a final rule in early November 2016 and implemented on or after January 1, 2017. The proposed rule is open for comment through September 6, 2016, and the Academy will be submitting a detailed comment letter before the deadline. The Academy offers a preliminary analysis of the proposed rule below.

Conversion Factor

CMS estimates a conversion factor of $35.7751 for CY 2017. The Medicare Access and CHIP Reauthorization Act (MACRA) established a 0.5 percent update factor for calendar years 2015 through 2025. For CY 2017, the conversion factor of $35.7751 reflects a budget neutrality adjustment of 0.9949, the 0.5 percent update factor specified under the MACRA, and other factors.

Audiology Codes Not on the List of Potentially Misvalued Services

In the CY 2016 MPFS proposed rule released in July 2015, CMS had identified two audiology-related codes as potentially misvalued services. These codes include CPT code 92557 (Comprehensive audiometry threshold evaluation and speech recognition) and CPT code 92567 (Tympanometry). The Academy anticipated a review of these codes in CY 2017; however, CMS did not identify those codes, or any audiology codes, on their potentially misvalued service list.

Physician Quality Reporting System (PQRS) to Sunset in Performance Year of 2017

The MACRA signed into law in April 2015, effectively repealed the flawed sustainable growth rate (SGR) formula and paved the way for a new Quality Payment Program, which ties Medicare payments directly to the value of the care provided. There are two pathways for participation in the Quality Payment Program. The first pathway is through the Merit-based Incentive Payment System (MIPS), which combines existing quality programs, including PQRS, the Value Modifier Program (VM) and the Medicare Electronic Health Record (EHR) Incentive Program. The second pathway is through provider participation in certain eligible alternative payment models (APMs). CMS anticipates that the majority of providers will be participating in the Quality Payment Program through MIPS, at least in the initial years of the program

To make the transition to quality reporting under MIPS, PQRS will sunset in the performance year of 2017. This means that 2016 is the final year in which providers will be required to participate in the PQRS program. The year 2017 marks the first performance year for MIPS, with payment adjustments being distributed in 2019. It is important to note that audiologists are not eligible for participation in MIPS in the first two years (2017, 2018). The Secretary of the US Department of Health and Human Services (HHS) has the authority to include other professionals, including audiologists, beginning in 2019. This means that audiologists will not be required to report on anything, including PQRS, in 2017, but will have the option to “practice” reporting on measures through MIPS. The Academy, in conjunction with the Audiology Quality Consortium (AQC), will provide more information on voluntary reporting in the coming months, and upon release of the final rule addressing the implementation of MIPS. Click here for more details on the new Quality Payment Program.

These changes are set to take effect on January 1, 2017, so audiologists are still advised to continue their PQRS reporting through 2016. Visit the Academy’s PQRS page for information on 2016 reporting.

Proposed Medicare Enrollment Requirement for Providers Furnishing Services to Medicare Advantage Enrollees

In the rule, CMS proposes to require providers or suppliers who furnish health care items or services to a Medicare Advantage enrollee (MA or MA-PD) be enrolled in Medicare and be in an approved status. CMS rationalizes this proposed requirement stating that it would create consistency with the provider and supplier enrollment requirements for all other Medicare (Part A, Part B, and Part D) programs. CMS also states that requiring Medicare enrollment for providers and suppliers that contract with a Medicare Advantage organization and furnish Medicare-covered items, and services allow the Agency to provide more consistent oversight of these health care providers and suppliers.  Out-of-network or non-contract providers and suppliers are not required to enroll in Medicare to meet the requirements of this proposed rule.

The Academy continues to review the MPFS proposed rule and will provide further analysis and guidance to members.

Additional Resources:

CMS Fact Sheet on MPFS Proposed Rule for 2017

CMS Information on Quality Payment Program: MIPS and APMs

CMS Press Release on MPFS Proposed Rule for 2017  

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