On July 13, 2017, the Centers for Medicare and Medicaid Services (CMS) released the Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2018 proposed rule. The proposed rule updates payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule on or after January 1, 2018. In addition, CMS is proposing or considering policies to amend biosimilar payments, delay its diabetes prevention program, and change how drug administration payments are packaged. As with other HHS rules under this administration, CMS is releasing a Request for Information (RFI) to welcome feedback on positive solutions to better achieve transparency, flexibility, program simplification, and innovation. This will inform the discussion on future regulatory action related to the PFS.
The rule is scheduled to be published in the Federal Register on July 21, 2017. Public Comments are due by 5:00 pm ET on September 11, 2017.
Please leave us a comment, give us a call at 202-558-5272, or email me directly at gpugh@appliedpolicy.com if you have questions, would like help determining how these proposals could affect your organization, or if you would like to engage CMS on any of these issues.
Meager Increase in Overall Payments of 0.31% Proposed
The overall update to payments under the PFS based on the proposed CY 2018 rates would be + 0.31 percent. This update reflects the + 0.50 percent update established under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, reduced by 0.19 percent, due to the misvalued code target recapture amount, required under the Achieving a Better Life Experience (ABLE) Act of 2014.
In this proposed rule, CMS has proposed misvalued code changes that would achieve 0.31 percent in net expenditure reductions. If finalized, these changes would not meet the misvalued code target of 0.5 percent, therefore requiring the -0.19 percent overall reduction to payments for PFS services. Estimates show this will affect diagnostic testing facilities the most with a -6% adjustment in payments. Allergists and immunologists are the second most impacted and could see a -3% change if the policy is adopted as proposed.
After applying these adjustments, and the budget neutrality adjustment to account for changes in RVUs, all required by law, the proposed 2018 PFS conversion factor is $35.99, an increase to the 2017 PFS conversion factor of $35.89.
CMS Signals Willingness to Reconsider Biosimilar Payment Policy
In 2015, CMS proposed a new payment policy for biosimilar products that would assign all biosimilars for one reference product to a single HCPCS billing code, with one payment amount. Stakeholders, including the biosimilar industry, opposed this policy, arguing that it would threaten innovation and make it difficult to track patient outcomes linked to a specific product. Instead, these stakeholders supported a policy to assign each biosimilar a unique billing code and payment amount.
While CMS is not making a proposal to change policy at this time, the agency is actively soliciting additional comments, including experiences under the first 18 months of the new policy. CMS noted that, since the policy was developed and implemented, several new biosimilar products have entered the market, including two that would share a billing code. Specifically, CMS is seeking comment on the following:
- How Medicare payment policy has impacted the biosimilar market thus far;
- How the payment policy impacts biosimilar products that are approved for fewer FDA-approved indications than the reference product, or two biosimilar products with the same reference product that individually have different indications;
- Market analyses or data reports that insight into the current biosimilar marketplace;
- Data and analysis on how individual HCPCS billing codes could impact the biosimilar market, including the number of products introduced, patient access, and drug spending; and
- Suggestions for other payment policies that would foster competition, increase access, and drive cost savings.
Because there is no formal proposal included in the rule, there will be no change in policy at this time. The agency will consider submitted comments in future rulemaking.
Medicare Diabetes Prevention Program Delayed 90 Days, With a Maximum Program Length of Three Years and a Performance-Based Payment Framework
In the CY 2017 PFS Final Rule, CMS finalized a number of provisions related to the Medicare Diabetes Prevention Program (MDPP). At the same time, they solicited comments on a significant number of provisions of the program, and acknowledged that certain details would remain unsettled until future rulemaking. In the 2018 proposed rule, CMS is proposing to complete the set of regulations necessary to begin implementation of the program. Most significantly, the proposed rule delays the availability date of services under the MDPP from January 1, 2018 to April 1, 2018. This is intended to allow time for supplier enrollment, which is proposed to begin on January 1, using a new, MDPP-specific enrollment application. Notably, after significant public comment, CMS has decided not to pay for “virtual” (i.e. not in-person) diabetes prevention programs at this time, but has established an interim recognition system for those providers whose enrollment in the program is pending with the Centers for Disease Control and Prevention.
In addition to the MDPP core services, which encompassed a year-long health promotion program characterized by regular in-person meetings, the 2017 final rule included the indefinite provision of “maintenance sessions” so long as the beneficiary maintained their 5% weight loss target. This rule proposes to limit these maintenance sessions to two years after successful completion of the core program, for a total of three years. This benefit would only be available once in a lifetime for each beneficiary. The proposed rule also removes a previous exclusion of beneficiaries who had previously been diagnosed with gestational diabetes, and adds an exclusion for beneficiaries with end-stage renal disease.
Payment for the MDPP would be made through a performance-based framework that makes incremental payments throughout the service period, with a maximum total payment per beneficiary of $810. Payment is based primarily on attendance at sessions and weight loss targets, and CMS proposes to add 19 additional billing codes to enable providers to bill for each of these incremental payments. They are also soliciting comments on whether and how they might implement a geographic adjustment for payments.
Six Codes Proposed to be Added to List of Telehealth Services, Call for Information on Ways to Expand Telehealth Services and Remote Patient Monitoring
CMS is proposing to add two services to the list of Medicare telehealth services that are similar to existing services on the list and four services that are add-on services
- HCPCS code G0296 (Counseling visit to discuss need for lung cancer screening using low dose ct scan (LDCT) (service is for eligibility determination and shared decision making))
- HCPCS code G0296 (Counseling visit to discuss need for lung cancer screening using low dose ct scan (LDCT) (service is for eligibility determination and shared decision making))
- CPT code 90785 (Interactive complexity (List separately in addition to the code for primary procedure))
- CPT codes 96160 and 96161 (Administration of patient-focused health risk assessment instrument (eg, health hazard appraisal) with scoring and documentation, per standardized instrument) and (Administration of caregiver-focused health risk assessment instrument (eg, depression inventory) for the benefit of the patient, with scoring and documentation, per standardized instrument))
- HCPCS code G0506 (Comprehensive assessment of and care planning for patients requiring chronic care management services (list separately in addition to primary monthly care management service))
With the addition of the Place of Service (POS) Code describing services furnished via telehealth from last year’s rule, CMS proposes to remove the required GT modifier for telehealth services since having both the GT modifier and POS code is redundant.
Since Medicare Teleahealth Coverage is restricted by Statue, CMS seeks comments on ways that they might further expand access to telehealth services within their current statutory authority. Additionally, CMS seeks comments on whether to make a separate payment for codes that describe Remote Patient Monitoring, since those services are not generally considered to be telehealth services.
Hospital Outpatient Departments to see a Decrease in Nonexcepted Services, CMS Estimates $25 Million in Savings for Medicare
When implementing the Site-Neutral Policy passed in the Bipartisan Budget Act of 2015, for CY 2017, CMS established a new set of payment rates for hospital outpatient departments that furnish nonexcepted items and services (services other than those provided by emergency departments). To do so, they created an adjustment factor and applied it to the Hospital Outpatient payment rate which generated the payment rate for these nonexcepted items and services. CMS finalized a 2017 payment rate of 50% of the hospital outpatient payment rate for services furnished in hospital outpatient departments.
For CY 2018, when exploring how to adjust the payment rate, CMS conducted a code-level comparison for the service most commonly billed in the hospital outpatient setting, G0463 – the code for hospital outpatient clinic visits. Armed with this information, CMS proposes to decrease the payment rate down to 25 percent of the hospital outpatient rate for CY 2018. In doing so, the Agency aims to ensure adequate payment without overestimating payments and chose to conduct a code-level assessment due to a lack of consensus among stakeholders regarding the appropriate adjustment level. CMS believes that this will save Medicare $25 million in CY 2018.
Ordering Clinicians Required to Meet Appropriate Use Criteria Starting January 1, 2019
After delaying the onset in previous years, CMS proposes to start the Medicare Appropriate Use Criteria (AUC) program for advanced diagnostic imaging services on January 1, 2019. On this date, as CMS has proposed, ordering professionals must consult specified mechanisms when ordering imaging services and they must report this action on the Medicare claim. The list of mechanisms available for professionals to consult was posted concurrently with the release of this rule on CMS’ website. This is the public’s first look at the list of available mechanisms which will undergo testing ahead of the AUC program’s proposed start date.
Regulations Updated to Accommodate New DME Infused Drug Payment Policy
The 21st Century Cures Act required Medicare to reset payment for drugs infused through a piece of durable medical equipment (DME) to the drugs’ average sales price (ASP) rather than the drugs’ average wholesale price (AWP). Until then, statute required those drugs to be paid at 95% of AWP, while most other drugs covered under Part B were paid at 106% of ASP.
The payment change took effect January 1, 2017, and was implemented via the ASP Pricing File sent from CMS to claims processors. The agency is now formally updating regulations to align them with statutory text and current policy. No additional changes are proposed at this time.
New Codes for Chronic Care Management in RHCs and FQHCs
CMS proposes the establishment of two new G codes to be used by rural health centers (RHCs) and federally qualified health centers (FQHCs) for Chronic Care Management (CCM) and Payment, which are listed below:
- GCCC1, would be a General Care Management code for RHCs and FQHCs, with the payment amount set at the average of the national non-facility PFS payment rates for CCM codes 99490 and 99487 and general BHI code G0507.
- GCCC2, would be a Psychiatric CoCM code,with the payment amount set at the average of the national non-facility PFS payment rates for psychiatric CoCM codes G0502 and G0503.
The payment rate for these codes would be updated annually based on the national non-facility PFS payment rates for each code contained in the G code.
Comments Sought on the Valuation of Emergency Department Visits – Are They Undervalued?
CMS is seeking comment from stakeholders on whether emergency department visits are undervalued due to increasing heterogeneity of the settings under which emergency department visits are furnished and changes to the patient population.
CMS Solicits Feedback on the CLIA Reporting Process
In June 2016, CMS published a final rule implementing extensive changes to payments under the Clinical Laboratory Fee Schedule (CLFS) mandated by the Clinical Laboratory Improvement Amendments (CLIA). Under CLIA, payment under the CLFS will be set at the median private payor rate for a laboratory test beginning on January 1, 2018. Under the final rule, certain laboratories were required to report detailed pricing data for laboratory tests paid by private payors. Initially, the deadline for this reporting was March 31, 2017, but concerns about labs’ ability to comply and the quality of that data forced CMS to extend the deadline to May 30 of this year. Preliminary rates are expected to be released in the coming months.
In the meantime, CMS is now soliciting comments on experiences with the reporting system used for the first time this year. Specifically, they seek feedback on ease of use, accessibility of data, technical support from CMS, and analysis of the reporting burden. These comments are generally sought from laboratories and other reporting entities, but members of the public are welcome to submit their thoughts on the matter as well.
Thank you to Melissa Andel, Julie Georgi, and Giana Mandel for their analysis and contributions to this post.