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CMS Releases CY 2015 MPFS Final Rule; Rates Set Through March with SGR Issue Looming

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On October 31, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2015 Medicare Physician Fee Schedule (MPFS) final rule.

The final rule contains updates to the relative value units (RVUs) used to calculate physician payments and changes to various payment policies and quality programs for physicians and other qualified healthcare professionals. The conversion factor of $35.8013 will be effective January 1 through March 31, 2015. Congress is likely to either extend the Sustainable Growth Rate (SGR) “fix” or pass permanent SGR reform to ensure physician payments are not cut by an estimated 21.2 percent on April 1, 2015.

MPFS Impact on Select Healthcare Groups:

Providers: The impact to individual specialties is relatively minor, ranging from negative two percent to one percent. CMS continues to refine reporting programs including the Physician Quality Reporting System (PQRS), Electronic Health Record (EHR) and Value-Based Payment Modifier (VBPM).

Facilities: CMS will collect data on hospital claims reported in provider-based, off-campus hospital outpatient departments through the use of a new Healthcare Common Procedure Coding System (HCPCS) modifier, which remains voluntary in CY15 and mandatory in CY16. Claims in the emergency department place of service (POS) do not require this modifier. For professional (i.e., physician) claims, CMS will create two new POS codes to differentiate between provider-based and non-provider-based outpatient departments. These POS will go into effect at a later date.

Life Sciences:

Medical device manufacturers will likely see physician payment rates for major surgical procedures with 10- and 90-day global surgery periods decline significantly in 2017 and 2018, respectively.

    Drug manufacturers will see stable drug administration rates in CY15. CMS also finalized interim RVUs for several drug administration codes (e.g., therapeutic and chemotherapeutic intravenous infusions). While CMS did not finalize additional drug administration codes as potentially misvalued, other public information indicated that these codes are still undergoing a Relative Value Scale Update Committee (RUC) review and could see readjustment in CY16.
    Laboratories and diagnostic manufacturers performing clinical laboratory services will not see any changes to the existing local coverage determination (LCD) process; however, CMS may revisit this process as part of a larger proposal related to the revised clinical laboratory fee schedule rate-setting methodology passed under the Protecting Access to Medicare Act of 2014.

Comments on certain rule proposals are due to CMS by December 30, 2014. Comments will not influence provisions effective January 1, 2015, but provide opportunities to influence policies in CY16 rulemaking.

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