The House and Senate have completed the 2013 legislative calendar by passing a budget agreement that includes a three-month Medicare payment update. The bipartisan budget agreement implements a 0.5 percent Medicare payment update Jan. 1 in place of the 24 percent cut called for under the failed SGR formula.

The 0.5 percent increase — the first positive update to Medicare physician payments since 2010 — is intended to avoid disruptions to the Medicare program while Congress resumes its work on SGR repeal legislation during the early part of 2014.

Prior to approving the budget agreement, key committees in the House and Senate passed their own legislative proposals to repeal the SGR along with transitioning to a new Medicare physician payment system and other reforms. This bipartisan accomplishment was a significant development given the partisan challenges in Congress after the government shutdown and debt ceiling debate.


From AAFP News — Release of Final 2014 Medicare Physician Fee Schedule Elicits AAFP Summary


December 11, 2013 02:42 pm News StaffCMS has released its final 2014 Medicare physician fee schedule(, a massive 1,000-plus page document filled with details about regulations that will guide Medicare payment to family physicians and other health care professionals as of Jan. 1.

In the final rule, CMS said it is committed to supporting primary care. “We have increasingly recognized care management as one of the critical components of primary care that contributes to better health for individuals and reduced expenditure growth,” said the agency.

In addition, CMS noted that in the final rule it had “prioritized the development and implementation of a series of initiatives designed to improve payment for, and encourage long-term investment in, care management services.”

In response to the final rule’s release, the AAFP issued a statement from AAFP President Reid Blackwelder, M.D., of Kingsport, Tenn., that said the 2014 fee schedule indicated the country might “slowly be moving in the right direction in establishing a health care system that meets patients’ needs for a usual source of care and a continuous relationship with a primary care physician.”

Story highlights
  • CMS recently released the final 2014 Medicare physician fee schedule; the lengthy document details payment rules for the coming year.
  • To save members time, the AAFP reviewed the schedule and wrote a summary that pulls out key details pertinent to family medicine.
  • The AAFP’s summary focuses on the new chronic care management code, telehealth services, the value-based payment modifier and changes to the Physician Quality Reporting System.

However, Blackwelder also pointed out that the sustainable growth rate formula calls for a more than 24 percent cut in Medicare payments to physicians as of Jan. 1. “That formula must be repealed, and the AAFP urges Congress to act quickly to do so,” said Blackwelder. “Congress has begun to appreciate the dire shortages of primary care physicians and other professionals. We again call on Congress to repeal the flawed sustainable growth rate formula.”

The AAFP has reviewed the CMS final rule and summarized areas of the fee schedule that most affect family physicians. The resulting 27-page document(27 page PDF) is designed to make the changes more easily understood and to help family physicians save time.

Chronic Care Management Code

In the proposed rule, which was released in early July, CMS added a chronic care management code (CCM) beginning in 2015, and the AAFP was pleased to see that the final rule included that code. The CCM code will apply to services provided to patients who have two or more chronic conditions that are expected to last at least 12 months or until the patient dies. CMS specifies that to qualify for the new code, a chronic condition must put the patient at significant risk of death or functional decline.

According to the final rule, CCM services provided by a physician can include, among other things, development of a care plan; medication management; and communication with the patient, caregivers and other health care professionals.

In addition, CMS abandoned its originally proposed 90-day billing interval and instead adopted a 30-day billing interval for CCM services — as recommended by the AAFP. The agency also finalized a code that corresponds to 20 minutes of service during that 30-day period.

The final rule states that patients must give advance consent to a practice where they are receiving care before the CCM code can be applied, and that consent must be reaffirmed at least every 12 months.

According to the Academy’s summary document, “The AAFP will continue working with CMS and other payers to properly structure and value CCM services and will provide members with further guidance prior to the service becoming payable in 2015.”

Telehealth Services

Telehealth services first were defined by CMS in 2001 as services including consultations or office visits delivered via an interactive telecommunications system that, at a minimum, include the use of audio and video equipment to allow two-way, real-time communication between the physician and patient.

The AAFP supported changes made in the final 2014 fee schedule whereby CMS modified the geographic criteria for eligible telehealth originating sites to include health professional shortage areas located in rural census tracts of urban areas.

According to the AAFP summary, CMS also “established a policy to determine geographic eligibility for an originating site on an annual basis,” and updated its list of eligible Medicare telehealth services to include transitional care management services. The AAFP supported both changes.

Value-based Payment Modifier

The Patient Protection and Affordable Care Act mandates that CMS establish a value-based modifier aimed at providing differential payment to physicians based on the quality of care provided to Medicare beneficiaries compared to the cost of that care during a specific performance period.

The Affordable Care Act requires that CMS begin using this value-based modifier with certain physicians in 2015 and apply the modifier to all physicians by Jan. 1, 2017. Furthermore, the value-based modifier must be implemented in a budget-neutral manner.

Currently, CMS is using 2013 performance data for groups with 100 or more eligible professionals to determine value-based modifier payments for 2015. In the final 2014 fee schedule, CMS lowers the threshold to groups of physicians with 10 or more eligible professionals. The agency will use this 2014 performance data to determine value-based modifier payments for 2016.

“CMS estimates that this change in policy would cause approximately 17,000 groups and nearly 60 percent of physicians to be included in the value-based payment modifier program in 2016,” wrote the AAFP in its summary.

Furthermore, in its review of the schedule during the earlier comment period, the AAFP called CMS’ proposal to implement the value-based payment modifier “reasonable” and commended CMS for its restraint in not initially subjecting practices with 10-99 physicians to pay cuts.

Regarding CMS’ physician feedback program, the agency has, since 2010, provided annual reports — dubbed “quality and resource use reports” — to physicians as a means of offering feedback on the quality of care and the cost of health care services given to Medicare patients. In the 2014 final rule, CMS noted its intention to provide such reports to all physician groups and solo physicians.

PQRS Changes

Also of interest to family physicians are changes to the Physician Quality Reporting System (PQRS) that first was instituted by CMS in 2011, with gradually increasing incentive payments made to physicians who could show successful participation in the program.

2014 is the final year that incentive payments may be earned under PQRS, and, in 2014, physicians can meet PQRS requirements by successfully participating in a qualified clinical data registry. Beginning in 2015, physicians will be penalized for not successfully reporting PQRS data on quality measures for covered services in 2013.

According to the AAFP summary, in the 2014 rule, “CMS added 57 new individual measures and two measures groups to fill existing gaps and plans to retire a number of claims-based measures to encourage reporting via registry and EHRs (electronic health records).” Specifically, for certain reporting criteria in 2014, CMS increased from three to nine the number of measures required to be reported via claims and registry-based mechanisms.

Prior to the release of the final rule, the AAFP repeatedly questioned CMS’ intention to increase the number of reported PQRS measures from three to nine and expressed concern that the burden of reporting multiple quality measures falls disproportionately on primary care physicians.

Related ANN Coverage
CMS’ 2014 Fee Schedule Proposes New Codes to Benefit Family Physicians

Adjustments in Proposed Medicare Fee Schedule Positive for FPs, Says AAFP
SGR Still Poses Threat to Patient Access, Care


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