Physician payment outlook for 2015

January 9, 2015

Despite the reimbursement challenges primary care physicians will continue to face in 2015, new initiatives will provide primary care physicians with opportunities to grow and better manage patient health.

What changes will 2015 bring for your practice’s reimbursements? Like so much else in business and medicine, the answer is, it depends.

If, for example, your practice includes many patients with multiple chronic diseases, or has remote treatment capabilities, you have the opportunity to boost your revenues. 

READ MORE: Physician practices grapple with new financial pressures

On the other hand, if you’re not participating in the government’s Physician Quality Reporting System (PQRS) or meaningful use program, 2015 will be the year you start feeling financial fallout from that decision.

And regardless of what else you do or don’t do in your practice, you could be facing a 21% cut in your Medicare reimbursements, unless Congress acts to fix the sustainable growth rate (SGR) formula.

In this article, Medical Economics explores some of the major payment changes and potential hurdles that physicians face in 2015, in order to help readers better understand the opportunities and challenges they will confront in the next year, and beyond.

Chronic care management

Apart from the ever-present possibility of an SGR-related cut, probably the biggest story of 2015 is the inclusion

of a code for chronic care management (CCM) in the 2015 Medicare Physician Fee Schedule. 

Current Procedural Terminology (CPT) code 99490 allows practices to bill for time spent developing a plan for, and managing the care of, patients with two or more chronic, potentially life-threatening conditions. 

The decision to begin paying for CCM services is part of the government’s long-term strategy to encourage a greater focus on quality of care and patient outcomes, rather than the volume of services provided, says Raemarie Jimenez, CPC, CPB, vice president for member and certification development with the American Academy of Professional Coders. 

“From the provider’s perspective, it takes a lot of work to be proactive and get their patients the different kinds of care they need to stay healthy. This [code] gives them a reportable way to do that,” says Jimenez. 

CPT code 99490 pays $42.60 for 20 minutes of staff time, and can be billed once per month per patient. Its use, however, comes with numerous scope-of-service and billing requirements, some of which may require changes in practices’ workflow. (See “Getting paid for chronic care” in the December 25, 2014 issue of Medical Economics for a complete description of the CCM code.)

NEXT PAGE: Codes to know in 2015

 

 

Primary care physicians are often unaware of services they commonly provide for which they can bill separately. The chart below shows new or commonly overlooked codes that physicians can use.

NEXT PAGE: Telemedicine opportunities and misvalued codes

 

Telemedicine opportunities

Another opportunity to grow revenue may come from the addition of new codes for telehealth services in the 2015 fee schedule. 

Medicare began paying for some telehealth services for eligible beneficiaries living in rural health shortage areas or outside Metropolitan Statistical Areas in 2000, and has been expanding the range of covered services since then. The newest services include:

  • Psychoanalysis  (CPT codes 90485, 90846 and 90847),

  • Prolonged evaluation and management services requiring direct patient contact (CPT codes 99354), and

  • Annual wellness visit (HCPCS codes G0438 and GO439)

Misvalued codes

The Affordable Care Act mandates that the Centers for Medicare and Medicaid Services (CMS)  periodically identify, review, and adjust values for potentially misvalued codes. The latest review produced code decisions in five areas, including:

  • hip and knee replacements,

  • radiation therapy and gastroenterology, 

  • radiation therapy, 

  • epidural pain injections, and 

  • film to digital substitution.

In the latter, which is probably of greatest interest to primary care providers, CMS updated the practice expense inputs for X-ray services to reflect the fact that X-rays now are performed digitally, rather than with analog film. 

NEXT PAGE: PQRS changes

 

PQRS

The PQRS program paid bonuses to medical practices in 2013 and 2014 for reporting quality data. Starting this year, however, that carrot becomes a stick, in the form of a 1.5% penalty for practices that did not report 2013 data. The penalty rises to 2% in 2016. (For more detailed information, see “Time’s up! Financial incentives are turning into penalties,” Medical Economics, September 25, 2014.)

While it’s too late to avoid penalties for this year and next, practices can avoid having their 2017 Medicare reimbursements docked by participating in PQRS in 2015. CMS has changed some of the participation and reporting rules, however. For example, it has eliminated 50 of the measures practices can report on, but added 20 new ones and two measures groups.

 In addition, avoiding 2017 financial penalties requires: 

  • eligible professionals (EPs) and group practices that use claims or registries to report, and who see at least one Medicare patient in a face-to-face encounter to report on at least one measure from a newly cross-cutting measures set, in addition to any other measures that the EP is required to report,

  • all group practices of 25 or more EPs using the Group Practice Reporting Option (GPRO) web interface to report measures on a beneficiary sample of 248 patients, and

  • group practices of 100 or more EPs that are registered for the GPRO to report on the Consumer Assessment of Healthcare Provider and Systems Survey for PQRS, regardless of the reporting mechanism the practice uses. 

NEXT PAGE: Medicaid and Medicare Shared Savings Program

 

Medicaid

Although not part of the Medicare physician fee schedule, developments in the Medicaid program will affect reimbursements for many physicians in 2015. 

The legislation that raised Medicaid reimbursements to Medicare levels for two years was set to expire at the end of 2014. Absent any last-minute Congressional action to extend it, Medicaid reimbursements will return to their 2012 levels-which in most states are well below those paid by Medicare and commercial insurers.

On the other hand, the number of states expanding Medicaid eligibility-a provision of the Affordable Care Act rendered optional in a 2012 U.S. Supreme Court decision-has been slowly growing. By the end of 2014 27 states and Washington, D.C., had done so, and several more states were either considering doing so or exploring other ways of expanding healthcare coverage to their residents. Consequently, doctors in these states may start receiving at least some reimbursement for care they had been providing for free.

Medicare Shared Savings Program changes

One of the most important developments to watch in 2015 is the fact that there are now both hospital- and physician-owned Accountable Care Organizations (ACOs) in the third year of the Medicare Shared Savings Program, says Brian Croegaert, chief executive officer of Sage Technologies in Rockford, Illinois, a consulting firm which provides managed services involved with Affordable Care Act implementation to clients including large integrated health systems, ACOs, and independent practice associations.  

READ: Why is Medicare spending slowing?

This program aims to encourage coordination among providers to improve the quality of care for Medicare fee-for-service beneficiaries and reduce unneeded costs. Medicare shares the savings with the ACOs as an incentive and allows the ACOs the chance to receive a bigger payment provided they are willing to take on a greater risk if their performance is not up to snuff. 

CMS reported in November that the current participants found $417 million in savings. These early participants in the program received $460 million in shared-savings payments.

“At the end of the third year under status, they will be required to decide whether or not they want to move forward into `full risk’ or risk sharing,” Croegaert says.

The physician fee schedule makes changes to ACO reporting requirements in 2015, allowing ACOs to earn bonus points by demonstrating year-to-year improvements in quality. CMS’s changes to the shared savings program for 2015 in order to “reflect up-to-date clinical guidelines and practice, reduce duplicative measures, increase focus on claims-based outcomes measures, and reduce ACO reporting burden,” reads an American Academy of Family Physicians summary of the final fee schedule.

The earlier proposed fee schedule would have changed the quality measures ACOs  report by adding new measures and removing some existing ones. That proposal was scrapped in the final fee schedule released in late October, and the reportable quality measures will remain at 33. However, CMS has increased the number of quality
measures calculated through filed claims and lowered the number of metrics that ACOs must report through CMS’ web interface. New measures that will be evaluated based on claims include:

  • avoidable hospital readmissions for patients with multiple chronic conditions, heart failure and diabetes,

  • depression remission,

  • readmissions to skilled nursing facilities,

  • documentation of current medication at every visit, and

  • stewardship of patient resources through the care team’s discussions of prescription medicine costs with patients.

NEXT PAGE: Private payer trends and looming SGR showdown

 

Private payer trends

As changes sweep government insurance programs, the shift from fee-for-service to value-based care is shaking up the commercial insurance landscape as well. Commercial payers have been paying close attention to the Medicare Shared Savings Program.

“More and more physicians will see insurance companies coming to them with contracts that will ask them to join a formal accountable care organization or they will receive a contract from their insurance company saying you can enhance your earning power by doing these quality things for us,” Croegaert says. “I see a lot of those contracts.” 

For many smaller practices, negotiating with private insurers is likely to remain a challenge. Pamela Carrington-Tribble, DO, a private practitioner in Half Moon Bay, California, says that scanning through her existing contracts with private payers shows “how much they don’t value my services. They are paying me less than it costs me to buy a vaccine for a patient,” she says. 

Like many independent physicians, Carrington-Tribble is trying to remain in private practice. “If at some point it gets to the point I can’t pay my staff, I’ll have to totally think about changing things,” she says. “Somehow, I’m staying afloat.”

SGR showdown coming

A year ago, it had become conventional wisdom among healthcare analysts and legislators that Congress would repeal the SGR formula, thereby removing the ever-present threat of drastic reductions-currently 21.6%-in physicians’ Medicare reimbursements. And while bipartisan legislation repealing SGR passed in both houses of Congress a year ago, the legislation foundered at the last minute over the issue of how to pay for SGR repeal.

In its place, Congress passed-for the 17th consecutive time-a one-year “patch” that raised Medicare reimbursements by .5%, and left the question of a permanent fix unresolved. 

At the close of 2014 the fate of SGR repeal remained uncertain. Many observers believe Congress will try to arrive at a long-term solution again this year. “The bipartisan, bicameral doc fix that was introduced in early 2014 will likely form the starting point for what they work up in 2015,” predicts Scott Gottlieb, MD, a member of the U.S. Department of Health and Human Services’ health information technology advisory committee and a resident fellow at the American Enterprise Institute.  

Repeal efforts may have gotten a boost from the Congressional Budget Office, which recently lowered its estimate of the cost of SGR repeal through 2024 to $119 billion, or $5 billion less than its previous estimate. Nevertheless, as last year’s experience showed, predictions of SGR’s demise are usually premature.

Stay tuned.