The Reading Room

7 things imaging leaders need to know about the MPFS final rule

by Erin Lane

This blog has been updated to reflect the correction in Medicare Lung Cancer Screening RVUs and reimbursement.

Last Friday, October 30, CMS released its final rule for the calendar year (CY) 2016 Medicare Physician Fee Schedule (MPFS), which governs payment policy for independent physician practices, professional payments, and select other health care services.

This year’s rule is somewhat unique in that CMS needed to incorporate elements of newly passed legislation, including the 2014 Protecting Access to Medicare Act (PAMA), particularly relevant to imaging, and the recent 2015 Medicare Access and CHIP Reauthorization Act (MACRA), which permanently repealed the sustainable growth rate (SGR) formula.

We’ve analyzed the final rule and identified the seven key takeaways imaging leaders need to know.

1. Payment updates for 2016 held near zero

The new 2016 conversion factor is $35.8279, which takes into account the 0.5% update factor, the -0.2% RVU budget neutral adjustment, and the -0.77% target recapture amount from the misvalued codes initiative. For reference, the CY 2015 conversion factor was $35.9335.

Overall, the estimated CY 2016 payment adjustment across all specialties is 0%. The graph below shows this year’s impact on service lines compared to recent final rules.

Impact on radiology: Payment updates for imaging services lines have held around 0% for the second year in a row, seemingly stabilizing after years of reimbursement cuts.

2. Imaging clinical decision support (CDS) provider deadline delayed

PAMA included a mandate that providers ordering advanced imaging exams must consult appropriate use criteria (AUC) via an electronic CDS platform by 2017.

In the CY 2016 final rule CMS established a new timeline for the “Medicare AUC Program.” Notably, the provider implementation deadline of 2017 was delayed. Many components of the program will not be addressed until next year’s rule, leaving only two months between the final rule and previously established implementation deadline.

It is important to note that CMS is only postponing the provider implementation deadline, not the program altogether. This year’s rule finalized the AUC approval process, while CY 2017 and 2018 rules will finalize the additional components of the program.

Impact on radiology: Providers will not be required to implement imaging CDS by 2017. However, in the final rule CMS made clear their intention to continue rolling out the program. We anticipate that CMS will establish a new deadline in next year’s rule.

3. But not all is postponed: CMS moving forward with AUC approval process

CMS finalized the first component of the Medicare AUC Program, the AUC approval process. Rather than CMS approving individual criteria, they will approve “Provider-Led Entities” through a rigorous application process. Once approved as a qualified provider-led entity, any AUC developed, modified, or endorsed by that entity are considered applicable AUC.

CMS defines a Provider-Led Entity (PLE), as an “organization comprised primarily of providers or practitioners who, either within the organization or outside of the organization, predominantly provide direct patient care.” This definition was modified from the proposed rule to concentrate on the role of the members of the organization rather than the organization itself, opening the door for national medical professional societies.

The PLE application deadline will be Jan. 1 of each year, beginning in 2016. CMS will announce qualified PLEs by June 30 of the following year, at that time all of the AUC from qualified PLEs will be considered certified. The qualified status lasts for five years.

We will provide a more in depth analysis of the changes made to the imaging CDS mandate on our blog in the coming weeks.

Impact on radiology: CMS finalizing the January 1, 2016 deadline for PLEs demonstrates their interest in cementing the AUC approval process before establishing the rest of the program. If your organization plans to seek approval as a PLE to develop AUC, you have two months to submit an application to CMS.

4. XR-29 radiation dose penalties will begin in 2016

PAMA established radiation dose requirements set to take effect in January 2016. Providers using CT scanners not meeting the National Electrical Manufacturers Association (NEMA) CT guidelines will see a 5% reimbursement cut to the technical component in 2016, and 15% for 2017 forward.

CMS finalized the new modifier “CT” to be reported on claims with specific CPT codes performed on machines not meeting the XR-29-2013 standards. Only the scans with that modifier will face reimbursement cuts.

Impact on radiology: The XR-29 reimbursement penalty will only apply to scans performed on noncompliant CT scanners. Learn more.

5. Lung cancer screening payment finalized

In February, 2015 CMS approved lung cancer screening counseling and low-dose CT (LDCT) lung cancer screening as an additional preventative benefit.

In this year’s rule, CMS finalized coding and payment for shared decision making visits and LDCT lung cancer screening, as follows:

CPT Code Description Work RVUs 2016 Payment
G0296 Counseling visit to discuss need for lung cancer screening LDCT 0.52 $36.00
G0297 LDCT for lung cancer screening 1.02 $249.00

CMS has yet to release details regarding claims processing, coding, and billing instructions for these services provided after February 5 but before CY 2016 begins. In the final rule CMS stated that this information is forthcoming. The most prudent approach is to hold all claims until CMS provides that information.

Impact on radiology: We now know CMS payment and coding for lung cancer screening services.

6. 122% increase in PACS workstation technical reimbursement

In the CY 2015 rule, for the technical component of digital imaging services CMS finalized removing a list of supply and equipment items associated with film technology since these items are no longer a typical resource input since the adoption of Picture Archiving and Communication System (PACS).

In the CY 2016 rule, CMS finalized raising PACS workstation reimbursement from $2,501 to $5,557, as the previous CY 2015 price was based on proxy item, while CY 2016 price was based on submitted invoices. However, some stakeholders, including the Relative Value Scale Update Committee (RUC) suggested that the true cost of the PACS workstation is significantly higher than the $5,557 due to professional expenses. Therefore, CMS requested recommendations from stakeholders, including the RUC, for professional PACS workstation reimbursement.

Impact on radiology: The technical reimbursement for digital imaging will increase to $5,557 to more accurately reflect the equipment providers use.

7. Quality reporting requirements are set through 2018

As outlined in the MACRA, providers must choose one of two payment tracks, either the new Merit-Based Incentive Payment System (MIPS) track or the Alternative Payment Model (APM) track for 2019 and beyond. For those who pursue the MIPS track, the ease of quality reporting should improve as it consolidates the existing Physician Quality Reporting System (PQRS) and Value-Based Payment Modifier (VBPM) models into the MIPS.

Until 2019, providers must continue to participate in the PQRS and VBPM programs which will determine payment through CY 2018.

PQRS: Providers are required to report at least nine measures across three domains. The non-reporting penalty for CYs 2016, 2017, and 2018 is 2%.

VBPM: As previously finalized, adjustments for groups with 10-99 providers will take effect this year. Groups with 100+ providers already saw these adjustments in CY 2015, and groups with 1-9 will see them in CY 2018.

Additionally, CMS finalized new maximum penalties for non-reporting, quality tiering downward adjustments, and quality tiering upward adjustments for CY 2018. The adjustments vary by practice size, phasing in larger penalties to smaller groups. Each of the three adjustments is ± 4% for groups with at least 10 eligible professionals (EPs) and +/- 2% for smaller groups. Non-physician EP-only groups have no quality tiering downward adjustment.

Impact on radiology: Provider performance in CY 2016 will determine payment adjustments from PQRS and VBPM for CY 2018, which is the last year of existing quality reporting systems.

How to market your lung cancer screening program

Given its potential to increase survival and volumes, lung cancer screening is one of the best opportunities to achieve cost, quality, and growth goals.