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CMS RELEASES PROPOSED 2017 MEDICARE PHYSICIAN FEE SCHEDULE AND HOSPITAL OUTPATIENT RULES

August 15, 2016

The Centers for Medicare & Medicaid Services (CMS) released the proposed Medicare physician fee schedule (PFS) rule for 2017. The Physician Fee Schedule was released following the proposed 2017 Hospital Outpatient Rule, which was released on July 6. Highlights from both rules include:

Physician Fee Schedule
• Requires health care providers and suppliers to be screened and enrolled in Medicare in order to contract with Medicare Advantage health plans to provide Medicare-covered items and services to beneficiaries enrolled in Medicare Advantage.
• Updates to the Medicare Shared Savings Program, including alignment of measures to those proposed in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) proposed rule, and the proposal to allow eligible professionals to report Physician Quality Reporting System (PQRS) data separately when the Accountable Care Organization fails to report on behalf of the clinician.
• Proposed policies for calculating 2017 and 2018 Value-Based Modifier cost and quality tiering when data issues or other unanticipated program issues arise, which may affect the data used for scoring.
• Given the implementation of the MACRA Quality Payment Program in 2019, CMS does not propose major policy updates related to the PQRS, EHR Incentive Program and Value-Based Modifier, as these programs will be replaced by the Merit-Based Incentive Payment System and Advanced Alternative Payment Model programs.

Hospital Outpatient Rule
• Implementation of Section 603 of the Bipartisan Budget Act of 2015, which requires that certain items and services provided by certain off-campus provider-based departments (PBD) not be paid under the Hospital Outpatient Prospective Payment System (OPPS) starting Jan 1, 2017.
• Section 603 specifically eliminates the “facility fee” for off-campus PBD acquired, created, renovated, or moved after November 2, 2015. It excludes from this 1) free-standing ERs, and 2) PBDs located within 250 yards of the main or a remote inpatient campus. (Multi-hospital systems can have only one “main” campus.) The facility fee is also deleted for any services added at off-campus PBDs after November 2, 2015.
• CMS proposes to implement the 90-day EHR Incentive Program reporting period for 2016 for all eligible professionals, eligible hospitals, and critical access hospitals. The reporting period would be any continuous 90-day period between Jan 1, 2016 and Dec 31, 2016. The ACC was instrumental in getting a bipartisan, bicameral bill introduced to raise the profile of this issue and signal the need for CMS to take action.

Proposed Medicare physician fee schedule (PFS) rule for 2017


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