Fee schedule final rule brings new opportunities and risks in 2016
Expect to be paid for advance care planning in 2016, along with mostly stable Medicare payment rates and a host of new pay-for-performance measures, according to an analysis of the Physician Fee Schedule (PFS) final rule by The Business of Medicine.
The overall Medicare conversion factor for 2016 is $35.8279. In 2015, the conversion factor was $35.7547 for the first six months of the year and $35.9335 from July 1 to the end of the year. Remember: The conversion factor is the dollar amount that relative value units (RVUs) are multiplied by to generate the bottom-line payment amount under Medicare’s formula.
Payments were supposed to increase by 0.5% each year under the law passed by Congress that also repealed the longstanding Sustainable Growth Rate (SGR) formula. However, the lower conversion factor for 2016 reflects a budget neutrality adjustment of -0.2%, along with another negative adjustment for misvalued codes in 2016 under the “Achieving a Better Life Experience” or ABLE Act of 2014.
Let’s take a look at the other highlights of the 2016 final rule, which was unveiled by CMS on Nov. 2.
- Payment for advance care planning. In 2016, CMS will implement two new CPT codes (99497 and 99498) that describe the provision of advance care planning services. CPT 99497 (advance care planning, including the explanation and discussion of advance directives such as standard forms by the physician, first 30 minutes, face-to-face with patient, family member, and/or surrogate) has a work RVU of 1.50 which puts it at the same payment rate as a level established patient visit (99214). CPT 99498 is for each additional 30 minutes of advance care planning and has a slightly lower RVU of 1.40. Under the 2016 conversion factor, 99497 would pay about $108.50 and 99498 would yield $104.90, though the exact amount will depend on your geographic location.
- Advance care planning can be billed as standalone services. The term “advance care planning” is usually associated with either the “Welcome to Medicare” visit and the Annual Wellness Visit (AWV). CMS will pay for 99497 and 99498 as standalone services, or on the same day as any E/M service. If the advance care planning is performed as part of the Welcome to Medicare or AWV service, 99497 and 99498 are separately billable and should be reported with modifier 33 (preventive service) to ensure your patients won’t get hit with a copay for it.
Value-based payment modifier. The Value-Based Payment Modifier (VBPM) program is part of Medicare’s shift from fee-for-service to pay-for-performance. The VBPM gives physicians payment incentives for better outcomes and efficient care, while penalizing physicians who underperform with negative payment adjustments. The 2016 PFS finalizes a proposal to apply the VBPM to non-physician providers (NPPs) such as physician assistants and nurse practitioners, starting with the 2018 payment adjustment period. For details on VBPM, check out our in-depth story on pg. 4.
- Physician Compare program. Another pay-for-performance initiative is the Physician Compare website, which uses star ratings to represent provider performance across a variety of metrics. “Benchmarks are important to ensuring that the quality data published on Physician Compare are accurately understood,” CMS writes in its fact sheet on the 2016 PFS final rule. Under the final rule, providers will have five-star ratings that are intended to give patients a quick way to assess their quality.
- New exceptions to Stark Law. Also known as the physician self-referral law, Stark is getting new exceptions in 2016. The first will allow hospitals, federally qualified health centers and rural health clinics to pay physicians who employ NPPs.The 2016 final rule also creates a new exception for timeshare arrangements where hospitals or physician organizations share support staff, office space, equipment, supplies, and other items with physicians.
Remember, this article is intended to serve only as a high-level overview of the many changes coming in 2016 thanks to the PFS final rule. Look for more detailed guidance on topics such as the advance care planning codes and the Stark Law exceptions in future issues of The Business of Medicine.
— Grant Huang, CPC, CPMA. The author is Director of Content at DoctorsManagement.