Summary Medicare Physician Fee Schedule Payments

On Oct. 30, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a Final Rule (PDF, 5.6 MB) that updates payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after Jan. 1, 2016. This year, CMS finalized a number of new policies, including several that are a result of recently enacted legislation. In addition, the rule includes discussions regarding:

  • “Potentially Misvalued PFS Codes.
  • Telehealth Services.
  • Advance Care Planning Services.
  • Establishing Values for New, Revised, and Misvalued Codes.
  • Target for Relative Value Adjustments for Misvalued Services.
  • Phase-in of Significant RVU Reductions.
  • “Incident to” policy.
  • Portable X-ray Transportation Fee.
  • Updating the Ambulance Fee Schedule regulations.
  • Changes in Geographic Area Delineations for Ambulance Payment.
  • Chronic Care Management Services for RHCs and FQHCs.
  • HCPCS Coding for RHCs.
  • Payment to Grandfathered Tribal FQHCs that were Provider-Based Clinics on or before April 7, 2000.
  • Payment for Biosimilars under Medicare Part B.
  • Physician Compare Website.
  • Physician Quality Reporting System.
  • Medicare Shared Savings Program.
  • Electronic Health Record (EHR) Incentive Program.
  • Value-Based Payment Modifier and the Physician Feedback Program.”¹

“This is the first PFS final rule since the repeal of the Sustainable Growth Rate (SGR) formula by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).”² 

The calendar year 2016 PFS final rule is one of several final rules reflecting a broader Administration-wide strategy to create a health care system that results in better care, smarter spending, and healthier people.

A Fact Sheet provided by CMS, discusses the changes to payment policies and payment rates for services furnished under the PFS and other programs.

Summary CMS Outpatient Prospective Payment System and Ambulatory Surgery Center Payments

On Oct. 30, 2015, CMS released the Calendar Year (CY) 2016 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System policy changes, quality provisions, and payment rates final rule with comment period (OPPS/ASC final rule) [CMS-1633-FC]. The Final Rule updates Medicare payment policies and rates for hospital outpatient departments (HOPDs), ASCs, and partial hospitalization services provided by community mental health centers (CMHCs), and refinements to programs that encourage high-quality care in these outpatient settings. OPPS payment amounts vary according to the Ambulatory Payment Classification (APC) group to which a service or procedure is assigned. The final rule also includes important changes to the Two Midnight Rule effective beginning in CY 2016. See the related fact sheet for detailed information.

CMS included additional “packaging" (bundling) changes that would roll more pathology services into Ambulatory Payment Classifications (APCs). CMS made changes to its APC payment rates due to errors in its estimates about packaging clinical laboratory services. Overall for all services, CMS estimates a -0.4% change in spending (before taking into account changes in volume and case mix) for hospitals paid under the OPPS in CY 2016.³

More information on this final rule is provided under Section IV of this document.

¹Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2016; Final Rule. Nov. 16, 2015. 42 CFR Part 405, 410, 411, et al. Pages 70888-70889

²CMS. Proposed policy, payment, and quality provisions changes to the Medicare Physician Fee Schedule for Calendar Year 2016. Fact Sheet. Oct. 30, 2015.

³CMS Finalizes Hospital Outpatient and Ambulatory Surgical Center Policy and Payment Changes, Including Changes to the Two-Midnight Rule and Quality Reporting for 2016. Fact Sheet. Oct. 30, 2015.

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About the author

Rick Oliver, CPCO, CPC, MT(ASCP) is Compliance Director in Laboratory and Pathology of McKesson Business Performance Services.