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Medical Industry Reimbursement News

2017 Medicare Physician Fee Schedule Final Rule Issued

November 2nd, 2016

The Centers for Medicare & Medicaid Services (CMS) has issued its final rule for the Medicare physician fee schedule (MPFS) for calendar year 2017. After application of the 0.5% payment increase, as required by the Medicare Access and CHIP Reauthorization Act of 2015, and mandated budget neutrality cuts, physician payment rates will increase 0.24% for 2017. The final CF for CY 2017 is $35.8887,    up from the current CF of $35.8043.

CMS also finalized its proposals to pay for new telehealth services, including end-stage renal disease-related services for dialysis, advance care planning services and critical care consultations. In addition, it will expand the Center for Medicare & Medicaid Innovation Diabetes Prevention Program model. CMS also finalized a number of new codes to more accurately pay for primary care, care management and other cognitive specialties.

The rule finalizes changes to the quality measurement requirements of the Medicare Shared Savings Program (MSSP), which includes revisions to the measure set and quality data validation process. This change will allow eligible individual professionals participating in MSSP to report quality data separately for the purposes of the Physician Quality Reporting System (PQRS), and to have that data used in PQRS in the event the MSSP Accountable Care Organization fails to report quality data.

The final rule can be found at https://federalregister.gov/d/2016-26668

2017 HOPPS/ASC Final Rule Released

November 1st, 2016

On November 1, the Centers for Medicare & Medicaid Services (CMS) finalized updated payment rates and policy changes in the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System for calendar year (CY) 2017. CMS estimates that the updates in the final rule would increase OPPS payments by 1.7 percent and ASC payments by 1.9 percent in 2017.

The rule finalizes the removal of the pain management dimension of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey for purposes of the Hospital Value-Based Purchasing Program. However, CMS continues to believe that pain control is an appropriate part of routine patient care that hospitals should manage, and is an important concern for patients, their families, and their caregivers. CMS is continuing the development and field testing of alternative questions related to provider communications and pain, and will solicit comment on these alternatives in future rulemaking.

CMS is finalizing policies which require that certain items and services furnished by certain off-campus hospital outpatient departments will no longer be paid under the OPPS beginning January 1, 2017. The rule describes which off-campus hospital outpatient departments are subject to this requirement, and which items and services are “excepted” these payment changes, thus continuing to be paid under the OPPS.

Additionally, CMS is making changes under the Medicare EHR Incentive Program for eligible hospitals and critical access hospitals attesting to CMS, including hospitals that are eligible to participate in both the Medicare and Medicaid EHR Incentive Programs (dual-eligible hospitals), by eliminating the Clinical Decision Support (CDS) and Computerized Order Entry (CPOE) objectives and measures beginning in 2017. CMS is reducing a subset of thresholds for the remaining objectives and measures for Modified Stage 2 and Stage 3. Additional changes include allowing all returning participants in the EHR Incentive Programs to report on a 90-day EHR reporting period in 2016 and 2017. CMS is also finalizing an application process for a one-time significant hardship exception to the Medicare EHR Incentive Program for certain eligible professionals in 2017 who are also transitioning to MIPS. These additions both increase flexibility, lower the reporting burden for providers, and focus on the exchange of health information and using technology to support patient care.

The OPPS/ASC Final Rule and Interim Final Comment (IFC) are available at:https://www.federalregister.gov/documents/2016/11/14/2016-26515/medicare-program-hospital-outpatient-prospective-payment-and-ambulatory-surgical-center-payment

Medicare RAC Contracts Named

November 1st, 2016

The Centers for Medicare & Medicaid (CMS) has named its new Medicare Recovery Audit Contractors (RAC). Three contractors will perform post-payment review of Medicare Part A and B fee-for-service claims for all provider types other than home health/hospice and Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS). The contractors are Performant Recovery Inc. in Region 1, Cotivit LLC in Regions 2 and 3, and HMS Federal Solutions in Region 4. In addition, Performant Recovery will perform post-payment review of home health/hospice and DMEPOS claims nationally.

The announcement can be found by visiting


Final FY 2017 Hospital VBP Program Adjustment Factors Posted

November 1st, 2016

On November 1, the Centers for Medicare & Medicaid Services (CMS) posted the final incentive payment adjustment factors for the fiscal year (FY) 2017 Hospital Value-Based Purchasing Program (VBP). These factors are being used to adjust base operating Medicare Severity Diagnosis-Related Group (MS-DRG) payments to eligible hospitals for discharges this fiscal year. The base operating MS-DRG payments to eligible inpatient prospective payment system hospitals are being reduced by 2% in FY 2017 to fund an estimated $1.8 billion in incentive payments for the VBP program. The actual VBP amount earned by each hospital depends on its Total Performance Score and incentive payment percentage.

The CMS Factsheet can be found at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-11-01.html

2017 Home Health Final Rule Released

October 31st, 2016

On October 31, the Centers for Medicare & Medicaid Services (CMS) released the final rule for the home health prospective payment system (HH PPS) for calendar year (CY) 2017. This rule reduces HH payments by 0.7%. This net cut includes a 2.8% market-basket update and 0.3 percentage point cut for productivity, as mandated by the Affordable Care Act (ACA). It also applies the second of three planned 0.9 percentage point cuts to account for estimated case mix growth from CYs 2012 through 2014 that the agency states was unrelated to increases in patient acuity. In addition, the rule implements the final year of the four-year phase-in of the rebasing of this payment system, a 2.3% cut, as mandated by the ACA.

The final rule can be found at https://federalregister.gov/d/2016-26290

Opportunities for Clinicians to Join APMs Announced

October 25th, 2016

The Centers for Medicare & Medicaid Services (CMS) has announced new opportunities for clinicians to join Advanced Alternative Payment Models (APMs). These models were developed by the CMS Innovation Center to improve care and potentially earn an incentive payment under the Quality Payment Program(QPP) created through the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The QPP rewards clinicians with sufficient participation in Advanced APMs that align incentives for high-quality, patient-centered care. By giving more clinicians the opportunity to participate in these models, this announcement will extend the benefits of high-quality, coordinated care to more Medicare beneficiaries.

CMS expects to re-open applications for new practices and payers in the Comprehensive Primary Care Plus (CPC+) model, as well as new participants in the Next Generation Accountable Care Organization (ACO) model for the 2018 performance year. In addition, CMS is announcing that the Innovation Center’s Oncology Care Model with two-sided risk will now qualify the model as an Advanced APM beginning in the 2017 performance year. In 2017, under the Quality Payment Program, clinicians may earn a 5 percent incentive payment through participation in the certain Advanced APMs.

For more information, go to https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-10-25.html

Quality Payment Program Final Rule Issued

October 14th, 2016

On October 14, the Centers for Medicare & Medicaid Services issued a final rule with comment period implementing key provisions of the new physician payment system required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA, which repealed the Medicare sustainable growth rate (SGR) methodology and required the establishment of a new physician quality and value-based payment program. The new program, the Quality Payment Program (QPP), begins calendar year 2019. The regulation establishes rules for clinician participation in the Merit-Based Incentive Payment System (MIPS). It also details how clinicians can qualify for incentive payments based on participation in Advanced Alternative Payment Models (APMs).  The rule also finalizes policies related to blocking of health information and electronic health record (EHR) surveillance that apply to all hospitals, critical access hospitals, and physicians.

For further details, go to https://qpp.cms.gov/docs/CMS-5517-FC.pdf

CMS Announces New Initiative

October 13th, 2016

The Centers for Medicare & Medicaid Services (CMS) has announced a new initiative to improve the clinician experience with the Medicare program. Acting Administrator Andy Slavitt is appointing Dr. Shantanu Agrawal to lead the development of this function and its implementation, which will cover documentation requirements and existing physician interactions with CMS, among other aspects of provider experiences. To ensure CMS is hearing from practicing physicians, each of the ten CMS regional offices will oversee local meetings to take input from physician practices within the next six months, with regular meetings thereafter.

The first action is the launch of an 18-month pilot program to reduce medical review for certain physicians while continuing to protect program integrity. Under the program, providers practicing within specified Advanced Alternative Payment Models (APMs) will be relieved of some scrutiny under certain medical review programs. Advanced APMs were identified as a potential opportunity for this pilot because participating clinicians share financial risk with the Medicare program. Two-sided risk models provide powerful motivation to deliver care in the most efficient manner possible, greatly reducing the risk of improper billing for services. After the results of the pilot are analyzed, CMS will consider expansion along various dimensions including additional Advanced APMs, specialties, and provider types.

For more information, visit https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-10-13.html

Corrections to FY 2017 Hospital Inpatient Final Rule Issued by CMS

September 30th, 2016

On September 30, the Centers for Medicare & Medicaid Services (CMS) issued a correction notice for the fiscal year (FY) 2017 inpatient and long-term care hospital (LTCH) prospective payment system (PPS) final rule. The correction notice corrects errors and omissions of several diagnosis and procedure codes related to the FY 2017 Medicare Severity-Diagnosis Related Group and MS-Long-Term Care-DRG updates. For the inpatient PPS, the corrections slightly decrease operating and capital rates, reduce almost all wage indexes, lower uncompensated care adjustments for many hospitals receiving Disproportionate Share Hospital (DSH)payments, and increase the outlier fixed-loss threshold.  In addition, the revisions require CMS to recalculate all of the budget neutrality factors.

The correction notice is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2017-IPPS-Final-Rule-Home-Page-Items/FY2017-IPPS-Final-Rule-Regulations.html

New Health IT Resources Released

September 26th, 2016

The Office of the National Coordinator (ONC) for Health Information Technology (IT) has released two new resources to help health care providers implement and use health IT. The Health IT Playbook offers implementation strategies, recommendations, and best practices from a variety of clinical settings. The electronic health record contracting guide offers strategies to help providers compare EHRs and negotiate key terms with EHR vendors.

The Health IT Playbook is found at https://www.healthit.gov/playbook/ and the Contracting Guide is available at https://www.healthit.gov/sites/default/files/EHR_Contracts_Untangled.pdf