On Friday October 30, CMS issued a final rule to update payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) starting January 1, 2016. Due to the increasing number of payment reform regulations, the complexity of those regulations, the passing of The Medicare Access and CHIP Reauthorization Act of 2015 (aka MACRA, the doc fix, or the SGR repeal) in April, and CMS’ recent commitment to accelerate the pace of value-based payment reform, this year’s rule totals a whopping 1,358-pages!

And unfortunately, within those 1,358 pages are important policy changes that not only affect how Medicare will pay physicians in 2016, but also change the regulations governing your participation in some of our favorite programs, including: MU, PQRS, VBM, CCM, MSSP, and FQHC. Now I know most of you probably spent the last two weeks reading and analyzing this 1,358 page regulation…but for those who haven’t, here are my Top 5 Takeaways from the 2016 Medicare Physician Fee Schedule Rule: 

  1. Medicare physicians will receive a small across-the-board pay cut in 2016. As prescribed by the SGR repeal law, this rule includes a 0.5% payment increase for all services billed by Medicare providers under the PFS, starting January 1, 2016. However, due to cost-cutting provisions included in the Affordable Care Act (ACA) and other legislation, a 0.79% payment decrease must be applied as well, resulting in an overall 0.3% decrease to reimbursement rates come January 1.
  1. 10% of a physician’s 2018 Medicare pay will depend on their 2016 performance in the MU, PQRS, and VBM programs. Because the Meaningful Use (MU) EHR incentive program, Physician Quality Reporting System (PQRS), and Physician Value-Based Payment Modifier (VBM) apply non-compliance penalties to payments made to providers under the PFS, this rule updates policies for these three quality reporting programs. While the penalties for MU (4%) and PQRS (2%) have been prescribed by law, CMS can adjust VBM penalties each year at their discretion, and included in this rule is next year’s VBM penalty: 4%.
  1. Chronic care management (CCM) is coming to FQHCs in 2016. In 2015, CMS established a new code that pays Medicare providers $40/month for 20 minutes of non-face-to-face care management services provided for beneficiaries with multiple, significant, chronic conditions. Because this code was established under the PFS, federal qualified health centers (FQHC) and rural health clinics (RHC) could not take advantage of the code for FQHC and RHC patients. In this rule, CMS has finalized a new policy to allow FQHCs and RHCs to bill the CCM code, subject to the requirements of providing CCM services set out by the 2015 physician fee schedule rule, which include having a certified EHR, maintaining an electronic care plan for each beneficiary, and obtaining beneficiary consent.
  1. CMS has created a new star rating system for physicians. The Affordable Care Act required CMS to establish a public website that compares the performance of Medicare physicians on cost and quality metrics, as well as provides other relevant information to consumers with the intent of providing them “consumer reports” style information about Medicare providers. The implementation of the website, “Physician Compare,” has been phased-in over the past several years and with this rule, CMS has established a new star ratings program that will assess the performance of physicians on PQRS quality measures (with 1-5 stars) and then list those rankings on the website for public consumption.
  1. Get ready for MIPS in 2017. In addition to repealing the SGR formula, the MACRA law changes the way Medicare pays physicians by consolidating the current MU, PQRS, and VBM programs and penalties into a single new Merit-based Incentive Payment System (MIPS) starting in 2019. While 2019 may seem like the distant future, with this rule, CMS has confirmed that the first performance period for MIPS will be 2017, so be on the lookout in next year’s rule for the final regulations concerning your 2017 MIPS participation.

Want to learn more about the 2016 rule? Register for our next Health Reform Simplified Webinar here.