CMS Releases 2014 Proposed Physician Payment Rule


July 20, 2013 – On July 8, CMS issued their proposed Medicare Physician Fee Schedule (MPFS) payment rule for 2014, accepting comments on the proposed rule until September 6, 2013. The final rule will be published by November 1, 2013. The proposed rule would update current payment policies and payment rates for services furnished under the MPFS on or after January 1, 2014.

This article is a summary of the major changes proposed in the MPFS ruling as described in CMS’ MPFS Fact Sheet and PQRS and VBPM Fact Sheet. The full proposed ruling can be accessed here.  We will publish more information on the provisions that may affect our clients in our August Washington News.

The following are generalized proposed provisions of the 2014 Medicare Physician Fee Schedule.


Payment Rates

  • CMS states that the actual values used to compute physician payments for 2014 will be based on later data which are scheduled to be published by Nov. 1, 2013 as part of the 2014 MPFS final rule.
  • ASCs would expect a 0.9% increase in 2014, but the proposed rule would reduce payments by 2% for facilities that fail to meet Medicare Quality Reporting Program requirements


Complex Care Management Services – Establishes a separate payment for chronic care management services furnished to patients with multiple complex chronic conditions by creating two new G-codes for establishing a plan of care and furnishing care management over 90-day periods.


Telehealth Services – Adds health professional shortage areas (HPSAs) located in rural census tracts of urban areas as determined by the Office of Rural Health Policy to improve access to teleheatlh services in shortage areas and adds transitional care management services to the list of eligible Medicare telehealth services.


Revisions To The Practice Expense Geographic Adjustment (GPCI) – Proposal of new GPCIs using updated data and changing the weights assigned to each GPCI (work, PE and malpractice) consistent with the recommendations of the Medicare Economic Index (MEI) Technical Advisor Panel that increases the weight of work and reduces the weight of practice expense. These new GPCIs would be phased in over CY 2014 and CY 2015. These changes are budget neutral. The statutory work GPCI “floor” of 1.0 is scheduled to expire under current law on December 31, 2013. The proposed GPCIs reflect the elimination of the work “floor” and as a result 51 localities will have a work GPCI below 1.


Medicare Economic Index (MEI) – CMS is proposing revisions to the calculation of the MEI, which is the price index used to update physician payments for inflation. The changes are in response to recommendations by a Technical Advisory Panel that met during CY 2012. The proposed rule includes proposed changes in the RVU and GPCI weights assigned to work and practice expense so that the weights in the payment calculation would continue to mirror those in the MEI if the proposed revisions are adopted. As a result, the proposal is to re-distribute some payment to work from practice expense.


Misvalued Codes – Adjustment of payment rates for more than 200 codes where Medicare pays more for services furnished in an office than in an outpatient hospital department or ASC.


PQRS Reporting – There are several proposed changes to PQRS reporting.  Some of these are:

  • The addition of 47 new individual measures and 3 measures groups
  • Increase the number of measures that must be reported via claims-based and registry–based reporting from 3 to 9.
  • Allow EPs to report measures used by the Clinical Data Registry instead of those on the PQRS measure list and may report measures on all patients, regardless of whether or not they are Medicare Part B FFS patients.
  • Revert back to only groups of 100 or more EPs to use the GPRO reporting method and creating a new reporting system for groups of 25 or more EPs


EHR Incentive Program

  • Propose an option for EPs to submit CQM information using qualified clinical data registries (as defined for PQRS) for purposes of meeting the CQM reporting component of meaningful use (MU) for the Medicare EHR Incentive Program beginning in 2014. EPs would have to use certified EHR technology, as required under the Medicare EHR Incentive Program, and report on CQMs that were included in the EHR Incentive Program Stage 2 final rule.
  • Add a group reporting option for EPs who are part of a Comprehensive Primary Care Initiative (CPCI)


Value-Based Payment Modifier Changes

  • CY 2015 will be the performance period for all physicians and physician groups for the VBPM that will apply in 2017
  • Lower the group size from 100 EPs to 10 or more EPs for 2016
  • Proposals for setting the VBPM based on PQRS participation
  • Increase the downward adjustment from 1.0% in CY 2015 to 2% for CY 2016
  • Propose to include the Medicare Spending per Beneficiary (MSPB) measure as an additional measure in the cost composite of the value-based payment modifier beginning with CY 2016.


Physician Compare Website

  • Expand this reporting by publicly reporting all measures collected through the GPRO web interface for groups of all sizes participating in the 2014 PQRS GPRO and for ACOs participating in the Medicare Shared Savings Program.
  • Publicly report certain measures that groups report via registries and EHRs for the 2014 PQRS GPRO.


Medicare Shared Savings Program

  • To continue to align with PQRS, ACOs will report through a CMS web interface on behalf of eligible professionals and must meet the criteria for the 2014 PQRS incentive to satisfactorily report to avoid the 2016 PQRS payment adjustment.
  • Previously, CMS indicated that they would use national Medicare Advantage and FFS Medicare performance data, and seek to incorporate actual ACO performance into establishing quality benchmarks for the program.  CMS is now proposing to including data submitted by the Shared Savings Program and Pioneer ACOs to set the benchmark for the 2014 performance period.