Preliminary Analysis of Medicare Physician Fee Schedule Proposed Payment Rule for CY 2018

Preliminary Analysis of Medicare Physician Fee Schedule Proposed Payment Rule for CY 2018

On Thursday, July 13, 2017, 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 2018 proposed rule. The proposed rule addresses changes and updates to the Medicare Physician Fee Schedule (MPFS) and other Medicare Part B payment policies including changes in valuation for services, overall payment updates, Medicare telehealth services, and updates to the Medicare Diabetes Prevention Program (DPP). Similar to other recent releases from the new Administration, CMS is releasing a Request for Information (RFI) to welcome feedback on best practices to promote better transparency, flexibility, and program innovation.

The proposed changes will be codified in a final rule in early November 2017 and implemented on or after January 1, 2018. The proposed rule is open for comment through September 11, 2017, 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 $35.99, an increase to the 2017 MPFS conversion factor of $35.89.

Valuation for Specific Services

In recent years, CMS has proposed many refinements to the values for individual services recommended by the American Medical Association- Relative Value Scale Update Committee (AMA RUC). For example, for CY 2016, CMS  proposed a lower value for the caloric vestibular codes (CPT codes 92537, 92538) than recommended by the AMA RUC. For CY 2018, CMS has proposed valuation for individual services based almost entirely on recommendations of the RUC. Instead of proposing alternative values, CMS has published questions and/or observations related to their review of the RUC recommendations.  CMS has stated that they will work extensively with the specialty societies to address these questions to ensure finalization of the RUC recommended values.  No audiology codes are under consideration at this time, but this policy may have implications if audiology codes are reviewed in the future.

Audiology Codes Not on the List of Potentially Misvalued Services

CMS is required to periodically identify potentially misvalued services using certain criteria and to review and make appropriate adjustments to the relative values for those services. CMS did not identify any audiology codes on their list of potentially misvalued services for CY 2018. CMS is seeking comments on the best approach for developing screens for potentially misvalued codes. 

Payment Rates for Non-excepted Off-campus Provider-Based Hospital Departments Paid Under the MPFS

Statute requires that certain items and services furnished by certain off-campus hospital outpatient provider-based departments no longer be paid under the OPPS beginning January 1, 2017. Last year CMS finalized the MPFS as the applicable payment system for such services.  For CY 2018, CMS is proposing to reduce current MPFS payment rates for these items and services by 50 percent. CMS currently pays for these services under the MPFS based on a percentage of the OPPS payment rate. The proposal would change the MPFS payment rates for these services from 50 percent of the OPPS payment rate to 25 percent of the OPPS rate.

Physician Quality Reporting System (PQRS)

Under the PQRS, individual eligible professionals and group practices who did not satisfactorily report data on quality measures in 2016 are subject to a downward payment adjustment of 2.0 percent in 2018 to their MPFS services. The final data submission timeframe for reporting 2016 PQRS quality data to avoid the 2018 PQRS downward payment adjustment was January through March 2017.CMS is proposing to revise previously finalized satisfactory reporting criteria for the CY 2016 reporting period to lower the requirement from 9 measures across 3 National Quality Strategy domains, where applicable, to only 6 measures with no domain or cross-cutting measure requirement. This policy change for the 2018 payment adjustment period will likely have little impact on audiologists, as audiologists were only eligible to report on six measures in 2016. CMS has maintained that individual providers and group practices would continue to be subject to the measure application validity (MAV) process.
As a reminder, 2016 was the last reporting period for PQRS, which is replaced by the Merit-based Incentive Payment System (MIPS) under the Quality Payment Program (QPP). Audiologists are ineligible to participate in MIPS in CY 2018.

Request for Information

In addition to the payment and policy proposals, CMS is releasing a Request for Information (RFI) to welcome feedback on positive solutions to better achieve transparency, flexibility, program simplification, and innovation. CMS has stated that this will inform the discussion on future regulatory action related to the MPFS. CMS invites public comment on ideas for regulatory, policy, practice and procedural changes to improve the health care system by reducing unnecessary burdens for clinicians, other providers, patients and their families.  CMS has stated that they will not respond to the RFI comment submissions in the MPFS final rule, but will consider the input in developing future regulatory proposals and sub-regulatory guidance. 

Also of Interest