Health Information Management

Note proposals in Medicare Physician Fee Schedule

APCs Insider, July 12, 2013

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By Michelle A. Leppert, CPC

In the past, outpatient facilities only worried about the OPPS proposed rule, inpatient facilities were concerned solely with the IPPS proposed rule, and physician practices focused on the Medicare Physician Fee Schedule (MPFS) proposed rule. Over the past few years, we’ve seen that changing somewhat as CMS proposes changes in one rule that can impact other settings and vice versa. For example, the 2014 MFPS proposed rule contains several proposed changes that tie back to the OPPS rule and/or changes that could have long-term implications on the physician and/or hospital setting, according to Jugna Shah, MPH, president and founder of Nimitt Consulting. 

As with the 2014 OPPS proposed rule, the 2014 MPFS rule is shorter this year (less than 700 pages), but still includes some significant changes, Shah says.

The most significant proposed change in the MPFS, is probably CMS’ proposal to revise its Practice Expense (PE) methodology beginning in CY 2014. CMS states that it wants to improve the accuracy of MFPS nonfacility payment rates. CMS proposes limiting the nonfacility PE RVUs for individual codes so that the total nonfacility MFPS payment amount would not exceed the total combined amount Medicare would pay for the same code in the facility setting (physician plus facility payment).  

For services on the ASC list, CMS would make the same comparison except it will use the ASC rate as the point of comparison instead of the OPPS rate.

 “This proposal seems to reflect CMS’ acceptance that hospitals have higher cost structures and for good reason and therefore the facility payments they receive should be higher than the equivalent practice expense component of the reimbursement made in the office setting for the same service,”Shah says. She calls CMS’ proposal interesting and adds it is likely to generate much industry discussion in the coming months as it has long-term payment implications across the physician and hospital setting.


CMS also includes a data collection proposal related to hospital-based clinic setting.  CMS states, “To better understand the growing trend toward hospital acquisition of physician offices and subsequent treatment of those locations as off-campus provider-based outpatient departments, we are considering collecting information that would allow us to analyze the frequency, type, and payment for services furnished in off-campus provider-based hospital departments.”

CMS is looking at different ways that it might do this, says Shah, including:

·         Creating a new place of service code for off-campus departments of a provider, comparable to current place of service codes, when physician services are furnished in an off-campus provider-based department

·         Creating a HCPCS modifier to be reported with every code for services furnished in an off-campus provider-based department of a hospital on the CMS-1500 claim form for physician services and the UB-04 for hospital outpatient claims

·         Asking all hospitals to break out their costs and charges for provider-based departments as outpatient service cost centers on the cost report

CMS discusses this proposal in both the MPFS and the OPPS proposed rules and is looking for comments. 

CMS also proposes to revise its updating process for services on the Clinical Laboratory Fee Schedule (CLFS) by reviewing all of the codes since most have not been reviewed in a long time, Shah says. CMS cites its authority from the Social Security Act that allows a review to occur if technologies have changed over time. CMS says that payments may increase or decrease, but mostly they will probably decrease since certain tests and technologies have been around a long time, she adds. 

This is just a short listing of key items discussed in the MPFS but many other proposals need to be carefully reviewed.


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