CMS releases 2015 Medicare Fee Schedule

The final rule includes reimbursement changes, updates to PQRS and new codes eligible for telehealth.

On Oct. 31 the Centers for Medicare and Medicaid Services (CMS) released the final rule on the 2015 Medicare fee schedule, establishing the federal health care program’s payment policies for the coming year. This year’s final rule contains valuable information for psychologists who treat Medicare beneficiaries, including fees for covered services, updates on the Physician Quality Reporting System (PQRS) and additions to Medicare’s telehealth services.

Reimbursement changes for 2015

As indicated in the proposed rule released by CMS in July 2014, Medicare’s total payments for psychological services in 2015 will be reduced by 1 percent due to changes in the practice expense portion of the Medicare payment formula. Practitioners will need to review the 2015 fee schedule from their Medicare administrative contractor (MAC) to determine the impact of Medicare payment changes for 2015 on their particular practice. The MACs should post fee schedules online before the end of 2014. 

Many Medicare providers, including cardiac surgery, chiropractic, obstetrics/gynecology, ophthalmology, optometry, orthopedic surgery, rheumatology and thoracic surgery will lose 1 percent or more due to other payment changes. Social work will also lose 1 percent due to practice expense adjustments, while psychiatry’s payments will remain the same as in 2014. Changes in the practice expense portion of the formula reflect the impact of new, revised and misvalued codes as well as other minor provisions of the complex Medicare payment formula.

In its Aug. 25 comment letter to CMS on the proposed rule, APAPO objected to the projected loss of 1 percent for psychological services. Psychologists have seen repeated reductions in payment due to practice expense adjustments. Even with the increase in work values for the revised psychotherapy codes, psychologists are still being paid 38 percent less for a 45-minute psychotherapy service now than they were in 2001, when adjusted for inflation. 

Apart from the final fee schedule, Congress has imposed a mandatory annual sequestration cut  since 2013 on payments to all Medicare providers. This cut will reduce psychologists’ payments by an additional 2 percent in 2015.

Three psychotherapy services added to telehealth

CMS will add the procedure codes for psychoanalysis (90845), family psychotherapy without the patient (90846) and family psychotherapy with the patient (90847) to its list of telehealth services for 2015. In its comment letter APAPO endorsed this change as a way of making these services more accessible for beneficiaries in remote areas. 

Medicare’s specific telehealth requirements must be met in order to be reimbursed for telehealth services. Communication by telephone does not qualify as telehealth. The Nov. 20 issue of this PracticeUpdate e-newsletter will include an article that provides additional details. 

No action by CMS on the testing codes

CMS has decided to take no action on the codes it identified in the proposed rule as “potentially misvalued” and therefore in need of review. Included on the list in the proposed rule were codes 96101 (psychological testing by a professional) and 96118 (neuropsychological testing by a professional). The agency will screen for high expenditures at a future date and then will propose a set of codes for review.

The Physician Quality Reporting System (PQRS)

Claims-based reporting

Although CMS has agreed not to make any changes to the claims-based reporting method for the Physician Quality Reporting System in 2015, the agency states in the final rule that it will not continue to support claims-based reporting. CMS has not specified a date other than to say that claims-based reporting will be eliminated in future rulemaking. CMS acknowledges that many eligible professionals (EP) prefer the claims-based method but notes that EPs have higher rates of success when reporting through registries and electronic health records.

APAPAO has repeatedly told CMS that claims-based reporting should be retained because it is the least expensive method for EPs in solo or small group practice. APAPO is also working with Healthmonix, a data technology company, to create a PQRS registry that focuses on quality measures used by psychologists and other mental health professionals. 

Cross-cutting measures 

Following objections from APAPO and others, CMS is reducing the number of cross-cutting measures that EPs whose work with patients involves face-to-face encounters will be required to provide. The cross-cutting measures are existing PQRS measures that reflect improvement in patients’ functional status. Measure No. 134 (Preventive Care and Screening: Screening for Clinical Depression and Follow-up Plan) is an example of a cross-cutting measure. The agency originally proposed requiring EPs to report on two cross-cutting measures but in the final rule reduced this requirement to just one. For 2015 EPs will be expected to report nine measures across three domains. For EPs who have face-to-face encounters with patients, one of the nine measures must be a cross-cutting measure. 

EPs who report fewer than nine measures across three domains will be subject to Medicare’s Measure Validation Application (MAV) process. EPs can still report successfully if the MAV process does not find other measures that the EP could have reported on. APAPO expects that many psychologists will need to go through the MAV process based on their patient populations and the limited number of services they provide to Medicare beneficiaries.

New measures

Despite requests from APAPO and others, CMS will not allow claims-based reporting for the new measures on Antipsychotic Medications for Individuals with Schizophrenia (No. 383) and Follow-up after Hospitalization for Mental Illness (No. 391). CMS did not finalize a third proposed new measure of interest to mental health providers, Adherence to Mood Stabilizers for Individuals with Bipolar I Disorder, because the agency decided it was not ready for implementation in 2015.

CMS delays applying the value-based payment modifier to non-physicians for one year

In the final rule CMS acknowledged that non-physician EPs need more time to become familiar with both PQRS and the value-based payment modifier (VM) intended to reflect both the quality and cost of care. Accordingly, CMS will refrain from applying the VM to non-physician EPs for one additional year — until 2018 rather than 2017 as originally proposed. In addition, non-physician EPs (both solo practitioners and groups) will not face a downward adjustment under the VM’s quality-tiering methodology for the first year. CMS will release more information about the performance period for the 2018 payment adjustment for the VM in the proposed rule on the 2016 Medicare fee schedule. APAPO will provide members with more information about the VM and how it relates to PQRS in the coming months.

APAPO continues advocating to change the reimbursement rate formula

The APA Practice Organization (APAPO) continues to work to improve psychologists’ reimbursement under the Medicare’s provider payment formula. In October, APAPO Executive Director Katherine C. Nordal, PhD, wrote to high-ranking staff at CMS to highlight the way specific components of Medicare’s resource-based relative value scale payment formula disadvantage psychologists, and to suggest ways the formula could be improved to more appropriately reimburse mental health services. 

The letter noted that reimbursement rates for psychologists’ services have fallen by more than 36 percent over the past seven years, and expressed concern about the impact that the continual reductions in Medicare reimbursement are having on psychologists and their ability to serve Medicare beneficiaries. 

APAPO followed up this letter with an in-person visit with senior CMS staff at the agency’s Baltimore, Maryland, offices to request their assistance in addressing this issue. We are currently exploring both legislative and regulatory options to address this problem.