ASCO Addresses Changes in Medicare for 2014


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Elaine L. Towle, CMPE

It’s important to note that all the bills being looked at have incentives for alternate payment models and payment tied to quality.

—Elaine L. Towle, CMPE

Medicare patients make up 61% of new cancer cases in the United States, and as the population ages, that proportion is expected to rise to 70% by 2030. Over the past decade, the oncology community has been financially challenged by alterations in the Medicare payment system. To address the changes in Medicare for 2014, ASCO recently conducted a teaching webinar, which was led by Elaine L. Towle, CMPE, Director of Consulting Services for Oncology Metrics, a division of Altos Solutions, Inc.

Legislative Update

Designed to control health-care spending, the sustainable growth rate (SGR) is the formula used to set the amount Medicare reimburses physicians for patient care—an attempt to impose fiscal discipline through yearly and cumulative spending targets. In an effort to avert untenable cuts in physician fees (24.4% projected for 2014), Congress once again passed a 3-month “patch” in December, to allow lawmakers on the Hill time to work out a solution to this perpetual problem.

Three committees of jurisdiction are currently working on an SGR fix. “It’s important to note that all the bills being looked at have incentives for alternate payment models and payment tied to quality,” said Ms. Towle. Ms. Towle discussed ASCO’s outreach efforts, in direct lobbying and official comments on the three SGR proposals. “It’s an ongoing multipronged effort,” she said.

[Editor’s note: Under a recent deal worked out by the three congressional committees, the SGR formula would be repealed, and physicians would get a 0.5% pay increase every year for 5 years. At press time, the lawmakers have yet to work out funding for the plan (the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 [H.R. 4015, S. 2000]), which still needs to be approved by both the House and the Senate.]

Hospital Outpatient Payment

Ms. Towle described changes to the Healthcare Common Procedure Coding System (HCPCS), which is a set of health-care procedure codes based on the AMA’s Current Procedural Terminology (CPT). A new HCPCS code, G0463, is used for a hospital outpatient clinic visit for assessment and management of a patient.

“This is for hospitals only; it does not impact professional service billing for physicians and nonphysician providers,” stressed Ms. Towle. She added, “CMS [the Centers for Medicare & Medicaid Services] is replacing the current five levels of hospital clinic visits for both new and established patients with a single code describing all outpatient visits. Ten codes are being replaced with one new code.”

Final Rule on Fee Schedule

CMS is required to establish payments under the Medicare Physician Fee Schedule based on national uniform relative value units (RVUs) that account for the relative resources used in furnishing a service. RVUs include three categories of resources: work, practice expense, and malpractice expense.

The most significant change in the fee schedule were revisions to the Medicare Economic Index—the tool used to calculate cost revision—which ended in reclassification of certain costs from the practice expense category. “Chemotherapy administration reimbursement decreased for most codes, and CMS projects a –2% impact on medical oncology,” said Ms. Towle.

“In 2015, CMS will begin paying for services related to complex chronic care management,” she noted. “The code has not yet been released, but it is described as follows: ‘Chronic care management services furnished to patients with multiple (two or more) chronic conditions expected to last at least 12 months, or until death of the patient, that place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; 20 minutes or more; per 30 days.’”

Incentive Programs

The Physician Quality Reporting System (PQRS) is a reporting program that uses incentive payments and payment adjustments to promote the reporting of quality information. PQRS reporting is available for individual eligible professionals or group practices. “The changes to the 2014 PQRS are designed to align requirements with other programs, encourage participation, and ease administrative burdens for participants,” said Ms. Towle. The measures are now grouped into six domains based on the National Quality Strategy’s six priorities:

Person and caregiver-centered experience and outcomes

Patient safety

Communication and care coordination

Community/population health

Efficiency and cost reduction

Effective clinical care

Value-based payment

Under the Affordable Care Act, CMS is required to implement a value-based payment modifier no later than January 1, 2015. The value modifier provides for differential payment to a physician or group of physicians under the Medicare Physician Fee Schedule based upon the quality of care furnished compared to cost during a performance period.

“CMS will make differential payment to physicians based on the quality and cost of care they provide with up to a 2% penalty on physician fee schedule payments in 2016 for poor performers or noncompliant practices,” said Ms. Towle.

Countdown to ICD-10

ICD-10 is the International Statistical Classification of Diseases and Related Health Problems. “ICD-10 will replace ICD-9 as of October 1, 2014. Any entity covered by the Health Insurance Portability and Accountability Act (HIPAA), must make a transition to ICD-10. If your practice does not bill with ICD-10 codes after October 1, your claims cannot be processed. This will lead to a delay in reimbursement or no reimbursement at all,” said Ms. Towle. She stressed that physicians need to be educated about every facet of ICD-10, because their medical documentation will need to change.

“Documentation must be specific enough for the billers and coders to select the appropriate code. Therefore, physicians need to understand how ICD-10 codes are selected. CMS is moving ahead with the transition, and there will not be any delays,” Ms. Towle warned. She enumerated the steps needed to make the transition more painless:

Get a commitment from your vendors about updating.

Buy an ICD-10 book and give it to your coders and billers.

Train your coding and billing staff.

Decide how and when to educate physicians. ■

Disclosure: Ms. Towle report no potential conflicts of interest.


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