If you have trouble viewing this email, view Best Practices Review online.

Volume 9, Issue 3 Download for iPad


The Physician Fee Schedule (PFS) proposed rule for calendar year 2015 was released by the Centers for Medicare & Medicaid Services (CMS) on July 3, 2014, with comments accepted until September 2, 2014. The proposed rule and comments are available at www.regulations.gov.

The estimated impact of the proposed rule on total allowed charges includes rather substantial cuts to specialties involved in cancer care including a 2% decrease to radiology, a 4% decrease to radiation/oncology, and an 8% decrease to radiation therapy centers. Overall, the news is better for hematology/oncology with CMS estimating a 1% increase in payments.


In the proposed 2015 Medicare Physician Fee Schedule, CMS once again addresses the methodology for setting Medicare physician payment rates through a formula known as the Sustainable Growth Rate (SGR). Congress established this formula in 1997 to control Medicare costs by tying Medicare payments to the projected growth of the economy. However, the formula soon became untenable as health care costs outpaced our economic growth and physicians were faced with cuts in the Medicare reimbursement rate.

The authority to fix or repeal the SGR formula lies with Congress and each year since 2003 Congress has acted to pass a temporary fix. In late 2013, the hope for a permanent fix was palpable as both houses of Congress were working towards a bipartisan agreement. Nevertheless, the effort failed as the issue of funding the repeal could not be agreed upon and Congress once again passed a temporary fix.

The Protecting Access to Medicare Act of 2014 (PAMA) signed into law by President Obama on April 1, 2014, provided a positive 0.5% update for claims with dates of service on or after January 1, 2014, through December 31, 2014. PAMA also provides for the replacement of the reduction in the PFS update that would otherwise occur on January 1, 2015, with a zero percent update from January 1, 2015, through March 31, 2015. However, when budget neutrality adjustments are factored in CMS estimates the Conversion Factor (CF) for the first three months will decrease slightly from the current rate of $35.8228 down to $35.7977.

CMS did not publish an estimated CF based on the Sustainable Growth Rate (SGR) formula, rather they remind us that unless Congress acts once more to stop it, the SGR formula and resultant decrease in the CF will be implemented on April 1, 2015.


CMS is required by the Affordable Care Act (ACA) to begin to apply a value modifier under the Medicare Physician Fee Schedule (MPFS) by 2015. The Value Modifier (VM) program is consistent with Medicare's continued shift from a passive payer under the fee-for-service payment methodology to an active purchaser of higher quality healthcare under a value-based payment system. In other words, moving from paying based on quantity to quality.

The value-based payment modifier is aligned with the reporting requirements under the Physician Quality Reporting System (PQRS), however, unlike the PQRS; the VM program is a pay-for-performance program. Under the value modifier, both cost and quality data are used in calculating payments for physicians. The value modifier provides for differential payment to solo practitioners and physician groups based on the quality of care they provide to Medicare beneficiaries compared to the cost of that care over a specified period of time.

Using a cost composite score and a quality composite score, solo practitioners and physician groups will be placed in one of nine quality tiers ranging from high quality/low cost to low quality/high cost. Each of the nine tiers will have a corresponding upward, downward, or neutral payment adjustment. Additional information on the calculation and application of the value modifier is available on the CMS Website.

The value modifier payment differentials will begin in 2015 (based on 2013 performance) for groups with 100 or more eligible professionals and in 2016 (based on 2014 performance) for groups with ten or more.

In the 2015 proposed rule, and as mandated by the ACA, CMS will expand the value modifier in 2017 to apply to all physicians including participants in Medicare Shared Savings Programs. Furthermore, going beyond ACA requirements, CMS proposes the expansion of the program to non-physician practitioners in 2017. In addition, CMS proposes to increase the maximum upward and downward adjustments from -2.0/+2.0 in 2015 and 2016 to -4.0/+4.0 in 2017.

As shown in figure 1, under this proposal solo practitioners and groups in the lowest tier, low quality and high cost, would see a negative 4% payment adjustment while those in the highest tier would benefit from a positive 4x adjustment. Due to budget neutrality x will be determined based on budget neutrality, in aggregate, the increased payments to high performing solo practitioners and groups would equal the reduced payments to low performing solo practitioners and groups. The calendar year 2017 payment adjustment is based on calendar year 2015 performance. The value modifier adjustment only applies to services that are paid under the Medicare Physician Fee Schedule (MPFS) and therefore does not apply to drugs.

HIGH QUALITY +4x +2x No adjustment
AVERAGE QUALITY +2x No adjustment -2.0%
LOW QUALITY No adjustment -2.0% -4.0%

Figure 1: 2015 Proposed Medicare Physician Fee Schedule

CMS also proposes solo practitioners and groups with fewer than ten eligible professionals that meet PQRS reporting requirements would not be subject to downward adjustments in 2017. Accordingly, as shown in figure 2, those that do not meet PQRS reporting requirements will be subject to the full negative 4% payment adjustment.

Calendar Year 2017 Value Modifier Proposal

Figure 2: 2015 Proposed Medicare Physician Fee Schedule

In figure 3, CMS illustrates the Value Modifier quality-tiering methodology. A number of commenters voiced concern regarding the inclusion of Part B drugs in the Value Modifier cost measure formula as Part D prescription drugs are excluded from the calculation. Most commenters called for all drugs to be treated equally: either include both Part B and Part D drugs or exclude both Part B and Part D.

Other commenters including the American Medical Association (AMA) expressed concern that those physician specialties, such as oncologists, that typically treat patients with multiple and/or very serious conditions generally have higher aggregate costs per patient than other physicians and may be unfairly penalized.

The Center for Healthcare Quality and Payment Reform (CHQPR) submitted a 28-page document outlining their concerns and what they describe as the many flaws with the proposed methodology for evaluating cost in the Value Based Payment Modifier program. CHQPR offers CMS suggestions for improving the methodology however, they also urge CMS not to implement the cost measures that are slated to begin for large physician groups in 2015. Moreover, CHQPR states, "No matter what improvements are made to the methodology, the Value-Based Payment Modifier will do relatively little to enable Congress and CMS to achieve one of the nation's most important goals: delivering higher-quality care and achieving better outcomes for Medicare beneficiaries at a lower cost."

Serious doubts were also expressed by the Medicare Payment Advisory Commission (MedPAC), an independent congressional agency established by the Balanced Budget Act of 1997 to advise the U.S. Congress on issues affecting the Medicare program including access to care and quality of care. In their comments MedPAC outlines the fundamental challenges with Medicare's quality programs and states, "The Commission's view is that quality measurement for clinicians in FFS Medicare at the individual level may not be worth the resources required." MedPAC further states that it may be impossible for the Medicare program to transparently and reliably establish, collect, benchmark access and adjust payments based on quality measures for individual clinicians. Instead, MedPAC recommends that clinicians be encouraged to organize into or join groups that take clinical and financial accountability for their patients, and access their performance on a few key outcome measures as discussed in their June 2014 Report to Congress.

The timeline for solo providers and groups of 9-10 providers to prepare for the Value-Based Payment Modifier is very short as the reporting period for the 2017 payment adjustments as proposed is 2015. This is an issue to watch carefully.

Relationship between Quality of Care and Cost Composites and the Value Modifier

Figure 3: CMS Physician Value-Based Payment Modifier Website


As of the close of the comment period on September 2, CMS reports having received 2305 comments on the proposed rule. Nearly a third of the comments addressed the proposed change in language to CMS' Open Payments (Physician Payments Sunshine Act) with the vast majority of commenters opposing the change, which they feel would eliminate the reporting exemption for continuing medical education (CME) speaker compensation.

The Affordable Care Act (ACA) mandated the Physician Payment Sunshine Act and CMS was tasked with developing the program, which they have since named "Open Payments". The Open Payments program promotes transparency through publication of financial relationships between the medical industry and healthcare providers (physicians and teaching hospitals).

The Open Payments program requires manufacturers of covered drugs, biologicals, devices, and medical supplies to report payments or other transfers of value they make to physicians and teaching hospitals. These healthcare providers will have an opportunity to review and dispute the data prior to the public reporting of the information by CMS after September 30, 2014.

Of concern to commenters is the 2015 Medicare Physician Fee Schedule proposal to delete the "Continuing Education Exclusion" found in Section 42 CFR 403.904(g) of the Sunshine Act rule, which exempts indirect commercial support for an accredited CME program when the manufacturer is "unaware" of the covered recipient's identity.

CMS explains their reasoning for deleting this exclusion saying the language is redundant and that another clause in the rule would cover the CME exclusion. Commenters disagreed, citing the differences in the timeframe during which the manufacturer is "unaware" of the recipient's identity. The language in the section CMS proposes to remove states that the CME exclusion applies when the manufacturer is unaware of the covered recipient's identity prior to the payment or transfer of value, while the section that CMS says will apply to CME programs states that the exemption will apply when the manufacturer is unaware of the covered entities identity during the reporting year and for two quarters thereafter.

Commenters on this proposal included numerous specialty organizations that focus on educational programs and are concerned that the proposal will lead to a decrease in funding for their CME programs as well as a decrease in attendees. The National Comprehensive Cancer Network (NCCN) commented that manufacturers can learn the identity of speakers through various publications and that the other requirements for the CME exclusion including the fact that manufacturers must not influence the content, speakers, or attendees of an accredited CME program makes it irrelevant if a sponsoring manufacturer becomes aware of the identity of any covered recipients.

As a side note, during the initial review period many oncologists reported payments attributed to them incorrectly. Subsequently, CMS announced that one-third of the Open Payments Program data is intermingled and thus will not be included in the first public reporting cycle. Numerous organizations including the AMA and the American Society of Clinical Oncology (ASCO) are calling on CMS to further delay the first public release of the data.


Another proposal that generated a number of comments is the Medicare payment reduction for radiation oncology and radiation therapy. The proposed reduction is largely due to the proposal to treat radiation treatment vaults as an indirect practice expense (PE) rather than a direct PE. As a result, radiation therapy centers are expected to experience an estimated 8% decrease in payments and radiation oncology would experience a decrease of 4%.

In previous rulemaking, CMS solicited comments on whether the radiation treatment vault should be classified as a direct or indirect cost. CMS received comments stating that the treatment vault should continue to be classified as a direct cost. Nevertheless, in the proposed rule CMS says that after reviewing the comments they have determined that the vault is not itself medical equipment cannot be directly attributed to the provision of a service and therefore should be accounted for in the indirect PE methodology.


77373 Sbrt Delivery
77402 Radiation Treatment Delivery
77403 Radiation Treatment Delivery
77404 Radiation Treatment Delivery
77406 Radiation Treatment Delivery
77407 Radiation Treatment Delivery
77408 Radiation Treatment Delivery
77409 Radiation Treatment Delivery
77411 Radiation Treatment Delivery
77412 Radiation Treatment Delivery
77413 Radiation Treatment Delivery
77414 Radiation Treatment Delivery
77416 Radiation Treatment Delivery
77418 TX Delivery IMRT

Figure 4: 2015 Medicare Proposed Physician Fee Schedule Rule



In the proposed rule, CMS once again expresses the importance of understanding the growing trend of hospitals acquiring physician practices and how this affects payments under the MPFS and beneficiary costs. CMS proposes to collect information on the type and frequency of services furnished in off-campus provider-based departments beginning in 2015. In the proposed rule CMS solicits comments on how they can collect this data stating their belief that the best way to collect the data would be through the use of a HCPCS modifier.

Several commenters wrote to support the use of a HCPCS modifier citing the continued trend of hospitals acquiring oncology offices. While supportive of the CMS proposal to gather the data, the American Osteopathic Association (AOA) cites the administrative burden associated with modifiers and recommends instead that CMS create a new place of service (POS) code for provider-based outpatient clinics. Furthermore, the AOA calls on CMS to revise regulations that allow hospitals to re-designate physician practices as OPDs and instead to require CMS approval for such re-designations stating, "This would provide CMS an opportunity to determine whether a re-designation is appropriate and meets CMS criteria. CMS also should place a moratorium on all re-designations until data can be collected and analyzed to inform future policy decisions. CMS should consider further revising its re- designation criteria based on data collected."

In the Medicare Payment Advisory Commission's (MedPAC) comments to CMS they address the trend of hospital acquisition of physician practices and their great concern that this migration from physician office to hospital outpatient department setting has resulted in higher spending for the Medicare program and higher cost sharing for Medicare beneficiaries without significant changes in patient care. MedPAC calls on CMS to seek legislative authority to implement their recommendations to set equal evaluation and management (E&M) office visits reimbursement and align payment rates for additional groups of services across settings.



Review of Potentially Misvalued Codes

As required under the Affordable Care Act (ACA), CMS continues to identify and review potentially misvalued codes. For 2015 the proposed codes include the following drug administration codes:

96372 Therapeutic /prophylactic /diagnostic injection SQ/IM
96375 Therapeutic /prophylactic /diagnostic injection, each addn. seq. IV push, new drug
96401 Chemotherapy anti-neoplastic injection SQ/IM
96409 Chemotherapy IV push, single drug

Figure 5

Still, unlike the past few years, under the proposed rule the payments for many of the drug administration codes will increase slightly due to the proposed changes in PE Relative Value Units (RVUs).



First discussed in 2014, CMS is proposing a new G-code to report non-face-to-face chronic care management (CCM) of patients with two or more chronic diseases. As with many of the latest Medicare changes, the development of this new payable code is an attempt to increase payment for primary care services. Although the service is not restricted to primary care, the requirements for documenting and billing the new CCM service are numerous and will likely discourage many providers.

CMS outlined the elements of CCM services in the 2014 Medicare Physician Fee Schedule Final Rule. For 2015, CMS proposes to eliminate the requirement that CCM services be furnished under direct physician supervision (physician present in the office suite), and instead would allow these services to be furnished under general supervision. CMS also proposes to require that a provider furnishing CCM services utilize an electronic health record (EHR) system certified by the National Coordinator for Health Information Technology (ONC) so members of the care team have immediate access to the most updated information informing the care plan.

As proposed, CCM requirements include:

  • Utilizing electronic health record (EHR) technology certified by a certifying body authorized by the National
  • Coordinator for Health Information Technology;
  • Informing the beneficiary about the service and obtaining his or her written agreement to have the services provided;
  • Creation and documentation of a patient-centered care plan;
  • Management of care transitions between and among health care providers and settings;
  • Communication access through telephone and secure messaging, internet or other asynchronous non-face-to-face consultation methods;
  • Access to care management services 24-hours-a-day, 7-days-a-week;
  • Continuity of care with a designated practitioner or member of the care team with whom the patient is able to get successive routine appointments;
  • Care management for chronic conditions including systematic assessment of patient's medical, functional, and psychosocial needs;
  • System-based approaches to ensure timely receipt of all recommended preventive care services;
  • Medication reconciliation with review of adherence and potential interactions; and
  • Oversight of patient self-management of medications.

In addition, only one provider may bill for the CCM per month per beneficiary. The proposed Medicare payment for CCM services is approximately $42.00 per month per beneficiary, and clinical staff coordinating care "incident to" a physician's service may perform the service under general supervision.



The Centers for Medicare and Medicaid Services (CMS) was required by the Patient Protection and Affordable Care Act (ACA) of 2010 to establish the Physician Compare Website. When CMS launched the site on December 30, 2010, it contained information on the physician's specialty, location of practice, education and other demographic information from the Healthcare Provider Directory, which is part of Medicare.gov.

Subsequently, CMS has been steadily improving and increasing the accuracy, amount and usefulness of the information available on the site in order to reach their stated purpose:

  • To provide information for consumers to encourage informed healthcare decisions; and
  • To create explicit incentives for physicians to maximize performance.

Previously, the quality initiative information reported on Physician Compare was limited to whether or not the provider or group practice participated in the quality programs. This year, CMS made the information on Physician Compare more meaningful by reporting the performance scores of certain Physician Quality Reporting System (PQRS) quality measures for practices reporting through the Group Practice Reporting Option (GPRO) and Accountable Care Organizations (ACOs) that successfully reported via the web interface.

The quality measure scores now available on the site include:

  • Controlling blood sugar levels in patients with diabetes.
  • Controlling blood pressure in patients with diabetes.
  • Prescribing aspirin to patients with diabetes and heart disease.
  • Patients with diabetes who do not use tobacco.
  • Prescribing medicine to improve the pumping action of the heart in patients who have both heart disease and certain other conditions.

CMS reports that quality data on 66 group practices and 141 Accountable Care Organizations (ACOs) are now publicly available on Physician Compare with data reported at the group practice and ACO level. In an effort to make the information user-friendly, CMS is using a five-star rating system whereby each star displayed represents 20 percentage points, the percentage score is also listed next to the star.

A screen shot of the Physician Compare Website is shown in figure 6, the performance scores for the PQRS quality measures are found under the Clinical Quality of Care tab on the Physician Compare Website. Clicking on the title of the quality measure brings up a description of the measure and how Medicare scored the practice on the measure.

Figure 6: www.physiciancompare.com

CMS is now proposing to expand the public reporting on Physician Compare by making available all 2015 PQRS GPRO measure sets reported by GPRO web interface, registry, and EHR for groups of 2 or more EPs in calendar year 2016. However, CMS says that not all of these measures would be included on the Physician Compare profile pages in order not to overwhelm consumers and negatively impact a consumer's ability to make informed decisions. Rather, CMS will continue to reach out to professional organizations and specialty societies to make sure that the measures are clinically relevant and accurate.

CMS continues to urge Medicare beneficiaries to review the information on Physician Compare, and says the expansion of PQRS measures reported on the site will help patients and their families make important decisions about health care and choose the right physician. For this reason, providers will want to make sure the reported information is accurate.



Beginning in 2015, incentives for participating in the Physician Quality Reporting System (PQRS) are eliminated and eligible providers (EPs) that did not successfully report during the 2013 reporting period will be penalized with a 1.5% payment reduction in 2015.

The penalties for not participating in PQRS increase to 2% for 2016 and subsequent years. Consequently, EPs that are not successful reporters in 2014 will receive the negative 2% payment adjustment in 2016 for services paid under the MPFS. As proposed, EPs that are not successful reporters in the 2015 reporting period will receive a 2% payment reduction under the PQRS and an automatic 4% payment reduction under the Value Modifier program in 2017.

For the 2015 reporting period, CMS proposes to increase the number of PQRS measures that an EP must report through claims and registry-based reporting to at least 9 measures covering at least 3 of the National Quality Strategy (NQS) domains and at least 2 of the measures must be from the proposed cross-cutting measure set.

CMS also proposes to further decrease the measures that can be reported through the claims reporting option as they continue to move the PQRS program away from claims reporting. The most recent CMS report shows that practices using the claims method of reporting under the PQRS have the lowest success rate. For this reason, practices currently using the claims system would be well advised to look at an alternate reporting method.

In 2014, EPs that satisfactorily participate in PQRS through a Qualified Clinical Data Registry (QCDR) may earn the 2014 incentive payment and avoid the 2016 payment adjustment.

2014 Oncology Specific Qualified Clinical Data Registries (QCDRs)

  • American Society of Clinical Oncology Quality Oncology Practice Initiative (QOPI®)
  • Oncology Nursing Society Quality Improvement Registry in collaboration with CECity
  • Oncology Quality Improvement Collaborative (The US Oncology Network, McKesson Specialty Health, Quality in Health Care Advisory Group, LLC (QHC Advisory Group), CECity)

CMS addresses the new QCDRs and proposes several changes. Foremost, CMS is proposing to require that the QCDR make available to the public the quality measures data for which its eligible professionals report. CMS says that at a minimum, the QCDR would have to publicly report the title and description of the measures that the QCDR reports for purposes of the PQRS, as well as the performance results for each measure the QCDR reports.

CMS is proposing to further expand the PQRS data to be publically reported on Physician Compare. First, they propose to make available, for public reporting on Physician Compare, all individual EP-level PQRS measures collected via registry, EHR, or claims. Data collected in 2015 would be publicly reported in late 2016. Second, CMS is proposing to create and publish composite scores by grouping measures based on the PQRS measure groups. CMS says that providing composite scores and benchmarks will give consumers the tools needed to most accurately interpret the quality data published on Physician Compare and to compare performance between providers.

The measures groups that CMS proposes to create and publish composite scores for include:

  • Coronary Artery Disease
  • Diabetes Mellitus (DM)
  • General Surgery
  • Oncology
  • Preventive Care
  • Rheumatoid Arthritis
  • Total Knee Replacement (TKR)

In 2013, CMS stated their intention to work to include specialty society measures on Physician Compare (e.g. ASCO's QOPI measures). In the proposed rule, CMS solicits comments on posting these measures on the Web site as well as the option of linking from Physician Compare to specialty society Web sites that publish non-PQRS measures.

As shown in figure 7, Medicare quality program penalties will compound significantly beginning in 2015. In their comments to CMS on the proposed rule, MedPAC states their belief that the complexity of the Value Modifier program makes it unlikely that clinicians will understand why their payments are changing, and what they must do to improve their performance and increase their quality-based payments.

Quality Program 2015 2016 2017
Value-based payment modifier

Bonus maximum

Penalty maximum

Bonus maximum

Penalty maximum

Bonus maximum

Penalty maximum

(No incentive)
(No incentive)
Penalty maximum
Penalty maximum
Penalty maximum
Total maximum possible
payment penalty
-3.5% -6.0% -9.0%

Figure 7

CMS will publish a final rule on or about November 1, which will become effective for services furnished during 2015. Oplinc will provide a detailed summary of the final rule once released.

Published by Rise Marie Cleland. Sponsored by Lilly Oncology

Risë Marie Cleland Rise@Oplinc.com

Oplinc, Inc.
1325 Officers Row
Suite A
Vancouver, WA 98661
360.695.1608 office

Comments and suggestions for future issues are welcome, please forward correspondence to Risë Marie Cleland by email at: Rise@Oplinc.com

Newsletter Archives

Volume 9, Issue 2
Volume 9, Issue 1
Volume 8, Issue 4
Volume 8, Issue 3
Volume 8, Issues 1 & 2
Volume 7, Issues 5 & 6
Volume 7, Issue 4
Volume 7, Issue 3
Volume 7, Issue 2
Volume 7, Issue 1
Volume 6, Issues 4 & 5
Volume 6, Issue 3
Volume 6, Issue 2
Volume 6, Issue 1
Volume 5, Issue 6
Volume 5, Issue 5
Volume 5, Issue 4
Volume 5, Issue 3
Volume 5, Issue 2
Volume 5, Issue 1

Access all of our previous newsletters.

Risë Marie Cleland is the Founder and CEO of Oplinc, Inc., a national organization of oncology professionals. Through Oplinc, Inc., Ms. Cleland publishes the weekly Oplinc Fast Facts focusing on the timely dissemination of information pertaining to billing, reimbursement and practice management in the oncology office and Oplinc’s Best Practices Review, which provides a more in-depth look at the issues and challenges facing oncology practices. Ms. Cleland also works as a consultant and advisor for physician practices, pharmaceutical companies and distributors.

Please note that this newsletter is presented for informational purposes only. It is not intended to provide coding, billing or legal advice. Regulations and policies concerning Medicare reimbursement are a rapidly changing area of the law. While we have made every effort to be current as of the issue date, the information may not be as current or comprehensive when you review it. Please consult with your legal counsel for any specific reimbursement information. For Medicare regulations visit: www.cms.gov.

CPT® is a Trademark of the American Medical Association Current Procedural Terminology (CPT) is copyright 2014 American Medical Association. All Rights Reserved. No fee schedules, basic units, relative values, or related listings are included in CPT. The AMA assumes no liability for the data contained herein.

Copyright ©2014 Oplinc, Inc.

Oplinc, Inc., grants permission to distribute this newsletter without prior permission provided it is forwarded unedited and in its entirety.

Remove me from this distribution list | Sign up to receive this newsletter
Lilly Oncology