On July 3, 2014, the Centers for Medicare & Medicaid Services (CMS) released a proposed regulation updating policies and payment rates for physician and other health care provider services paid under the Medicare Physician Fee Schedule (PFS) for calendar year (CY) 2015. The proposed rule also sets forth changes for quality reporting programs, Physician Compare Website and the Value-Based Payment Modifier. The proposed rule will be published in the Federal Register on July 11, 2014. CMS will accept comments on the proposed rule until September 2, 2014.

PFS Proposed Rule Highlights

Conversion Factor: CMS proposes a drop in the current conversion factor (CF) of $35.8228 down to $35.7977. The Protecting Access to Medicare Act of 2014 (PAMA) replaced the 24 percent reduction in the PFS with a 0.5 percent update through the end of this year; however, the law provides a 0 percent update for services furnished on or after January 1, 2015 through March 31, 2015. The estimates in the proposed rule are based upon the CF being applicable throughout the year. Despite the CF reduction, CMS calculations estimate an overall 0percent change in payment rates for the specialty of urology as a whole.

Sustainable Growth Rate: This year's proposed rule does not project the sustainable growth rate (SGR) for CY 2015, although prior to the PAMA enactment, CMS estimated the PFS update for CY 2015 would be -20.9 percent. When adjustments to the relative value scale were combined with the CF change, the net reduction in payment rates would have been 24 percent. In most prior years, Congress has taken action to avert fee schedule cuts before taking effect. The AUA will continue to work with Congress to permanently repeal the SGR to avoid another freeze to the fee schedule on April 1, 2015.

Potentially Misvalued Codes: As part of its ongoing effort to identify potentially misvalued codes, CMS is proposing to review about 80 additional codes for this initiative. The following codes were identified through a screen of high expenditure codes per specialty:

Prostate Biopsy Pathology Service: For prostate biopsy pathology service, CMS is proposing to revise and use G0416 (currently used to report between 10 and 12 specimens) to report all prostate biopsy pathology services regardless of the number of specimens, and to delete codes G0417, G0418, and G0419 to eliminate possible confusion caused by the coding. CMS also is proposing to use existing values for G0416 for CY 2015. In addition, G0416 has been identified as a potentially misvalued code for CY 2015. CMS is seeking public comment on the appropriate work RVUs, work time, and direct PE inputs for G0416.

Open Payments: CMS is proposing four changes in this rule: 1) delete the definition of "covered device" as it is duplicative of the definition of "covered drug, device, biological or medical supply" which is already defined in regulation, 2) delete the Continuing Education Exclusion in its entirety, 3) require the reporting of the marketed name of the related covered and non-covered drugs, devices, biologicals, or medical supplies, unless the payment or other transfer of value is not related to a particular covered or non-covered drug, device, biological or medical supply, and 4) require applicable manufacturers to report stocks, stock options or any other ownership interest as distinct categories.

Improving the Valuation and Coding of the Global Package: Under the misvalued code initiative, CMS also is proposing to transform all 10-day and 90-day global codes to 0-day global codes. The transition for 10-day global periods would start in 2017 and 90-day global periods in 2018. Medically necessary pre and post-operative services would be billed separately under the proposal. The postoperative hospital inpatient and discharge day visits for CPT code 50360 Transplantation of Kidney would be affected by this proposal.

Enhanced Transparency in Rate-setting: CMS is proposing a new process for establishing payment rates for new, revised, and potentially misvalued codes that would ensure by CY 2016 that all revisions to payment inputs are effective only after CMS has responded to public comment. By using the proposed process for new, revised, and potentially misvalued codes, CMS is proposing to eliminate the refinement panel process.

Other Provisions – The rule also proposes to update all malpractice RVUs, adjust the geographic practice cost indices (GPCIs) for the Virgin Islands, Alaska and the frontier states (Montana, Nevada, North Dakota, South Dakota, and Wyoming), as required by statute. In addition, CMS proposes to add new services under the telehealth benefit, new provisions for chronic care management services, and begin collecting data on services furnished in off-campus provider-based departments beginning in 2015 by requiring use of a modifier.

Physician Quality Reporting System (PQRS): For 2015, CMS is proposing to add 28 new individual measures and two measures groups to fill existing measure gaps, and remove 73 measures from reporting for the PQRS. These proposed changes would bring the PQRS individual measure set to 240 total measures. In addition, CMS is proposing to require that eligible professionals (EPs) who see at least one Medicare patient in a face-to-face encounter report measures from a newly proposed cross-cutting measures set in addition to any other measures that the EP is required to report.

PQRS Measures as Individual EPs: For the 2017 PQRS payment adjustment, CMS is proposing criteria for satisfactory reporting and satisfactory participation by individual EPs. Specifically, CMS is proposing to add criteria that would require EPs who see at least one Medicare patient in a face-to-face encounter and choose to report PQRS quality measures via claims and registry to report on at least two measures in the newly proposed PQRS cross-cutting measures set.

Reporting PQRS measures under the Group Practice Reporting Option (GPRO): For the 2017 PQRS payment adjustment, CMS is proposing criteria for satisfactory reporting by group practices that would change the number of patients for which group practices report measures under the GPRO web interface from 411 for group practices with 100+ EPs and from 218 for group practices with 25-99 EPs to 248 for all group practices with 25 or more EPs. In addition, group practices that have at least one EP who sees at least one Medicare patient in a face-to-face encounter and choose to report via registry would be required to report on at least two measures in the proposed PQRS cross-cutting measures set. If these group practices report using a certified survey vendor and a registry, only one measure in the cross-cutting measures set would need to be reported.

Reporting of electronically specified clinical quality measures for the Medicare EHR Incentive Program: EPs are still required to report on the most recent version of electronically specified clinical quality measures (eCQMs), however, CMS is proposing that EPs would not be required to ensure that their Certified EHR Technology (CEHRT) products are recertified to the most recent version of the electronic specifications for the CQMs.

Medicare Shared Savings Program: CMS is proposing to revise the quality scoring strategy to recognize and reward ACOs that make year-to-year improvements in quality performance scores on individual measures by adding a quality improvement measure that adds bonus points to each of the four quality measure domains based on improvement. In addition, CMS is proposing to modify the benchmarking methodology to use flat percentages to establish the benchmark for a measure when the national fee-for-service (FFS) data results in the 90th percentile being greater than or equal to 95 percent. Revisions to reflect up-to-date clinical guidelines and practice, reduce duplicative measures, increase focus on claims-based outcome measures, and reduce ACO reporting burden are also proposed.

Physician Compare Website: CMS is proposing to expand public reporting of group-level measures by making all 2015 PQRS GRPO web interface, registry, and EHR measures for group practices of 2 or more EPs and ACOs available for public reporting on Physician Compare in 2016. The data would need to meet the minimum sample size of 20 patients and prove to be statistically valid and reliable. CMS also proposes to publicly report 20 PQRS individual measures reported in 2013 and collected through a registry, EHR, or claims in 2015. In addition, CMS would expand measures for individual EPs by making all 2015 PQRS individual measures collected via registry, EHR, or claims available for public reporting on Physician Compare in late 2016, if technically feasible. CMS would also include an indicator on Physician Compare for satisfactory reporters under PQRS in 2015, participants in EHR, as well as EPs who report the PQRS Cardiovascular Prevention measures group in support of Million Hearts. Finally, CMS proposes to make available on Physician Compare the 2015 Qualified Clinical Data Registry (QCDR) measure data collected at the individual measure level or aggregated to a higher level of the QCDR's choosing, if technically feasible.

Value-Based Modifier (VBM): CMS proposes to apply the Value Modifier beginning in CY 2017 to physicians in groups with two or more EPs and to physicians who are solo practitioners, as well as to non-physician EPs in groups with two or more EPs and to non-physician EPs who are solo practitioners. This proposal completes the phase-in of the Value Modifier to all EPs as required by law.

Proposed Value Modifier Payment Adjustments: CMS also proposes to increase the downward adjustment under the Value Modifier from -2.0 percent in the CY 2016 payment adjustment period to -4.0 percent for the CY 2017 payment adjustment period, and increase the maximum downward adjustment under the quality-tiering methodology to -4.0 percent for groups and solo practitioners classified as low quality/high cost and to set the adjustment to -2.0 percent for groups and solo practitioners classified as either low quality/average cost or average quality/high cost. In addition, CMS proposes to increase the maximum upward adjustment under the quality-tiering methodology in the CY 2017 payment adjustment period to +4.0x ('x' represents the upward payment adjustment factor) for groups and solo practitioners classified as high quality/low cost and to set the adjustment to +2.0x for groups and solo practitioners classified as either average quality/low cost or high quality/average cost.

Proposals for Setting the Value Modifier Adjustment Based on PQRS Participation: CMS proposes to classify groups and solo practitioners subject to the CY 2017 Value Modifier using a two-category approach that is based on whether and how groups and solo practitioners participate in the PQRS. CMS also proposes to use for the CY 2017 Value Modifier for all of the PQRS quality measures that would be available to be reported under the various PQRS reporting mechanisms in CY 2015, including quality measures reported through PQRSQCDRs.

Beginning with the CY 2017 payment adjustment period, CMS proposes to apply the Value Modifier to physicians and non-physician EPs in groups with two or more EPs, and to physicians and non-physician EPs who are solo practitioners that participate in an ACO under the Medicare Shared Savings Program during the payment adjustment period. Under the proposed rule, CMS would modify the beneficiary attribution methodology and reverse the current exclusion of certain Medicare beneficiaries during the performance period.

Physician Feedback Program: Later this summer, CMS plans to disseminate Quality and Resource Use Reports (QRURs) based on CY 2013 data to all groups of physicians and solo practitioners. During the summer of 2015, CMS intends to disseminate QRURs based on CY 2014 data to all groups and solo practitioners.

To learn more about how the proposed rule policies will affect reimbursement rates for urology services, and to view conversion tables, click the tables below.

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The AUA staff is still reviewing the rule and will provide further analysis is a separate update. If you have questions about the proposed changes, please contact the AUA at R&R@AUAnet.org.