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Volume 11, Issue 4 Download for iPad

CMS Releases 2017 Medicare Final Payment Rules

On Tuesday, November 1, the Centers for Medicare & Medicaid Services (CMS) released the 2017 Hospital Outpatient Prospective Payment System (OPPS) rule. This was followed the next day, Wednesday, November 2, by the release of the 2017 Physician Fee Schedule Final Rule. These final rules update payment policies, payment rates, and quality provisions for physicians and hospitals in 2017.

In this newsletter, we will summarize the changes relevant to most oncology practices. Please take some time to read the final rules for more detailed information on Medicare program rules.

2017 Medicare Physician Fee Schedule Final Rule 1, 2, 3

Medicare Physician Fee Schedule Conversion Factor

Under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, Medicare Physician Fee Schedule (MPFS) rates are scheduled to increase by 0.5% each year until 2019. However, CMS must also take into account other statutory requirements when calculating the annual conversion factor (CF). As described below, the application of these statutory requirements will result in a 2017 CF that is estimated to be just $0.09 higher than the 2016 CF.

MACRA calls for a CF increase of 0.5% from 2016–2019. The calculation of the 2017 CF is also impacted by the Achieving a Better Life Experience (ABLE) Act of 2014. The ABLE Act sets a target for adjustments to misvalued codes in the fee schedule of 1.0% for 2016, and 0.5% for 2017 and 2018.

In the 2017 Physician Fee Schedule (PFS) final rule, CMS finalized misvalued code changes achieving a 0.32% net expenditure reduction. This does not meet the misvalued code target of 0.5% for 2017. Therefore, as required under the ABLE Act, CMS must apply a reduction of equal to the percentage difference between the target 0.5% and the percentage of net reductions (0.32% for 2017) to all PFS services in 2017. This estimated "target recapture" amount for 2017 is estimated to be a -0.18% reduction in the CF.

The 2017 CF is further reduced by the 2017 Budget Neutrality adjustment and a 2017 Imaging MPPR adjustment. Together, these adjustments will result in a slight increase of next year's CF, from $35.80 in 2016 to $35.89 in 2017.

Table 50 in the 2017 PFS final rule illustrates the calculation of the 2017 CF:

Table 50: Calculation of the Final CY 2017 PFS Conversion Factor

Conversion Factor in effect in CY 2016 35.8043
Update Factor 0.50% (1.0050)  
CY 2017 RVU Budget Neutrality Adjustment -0.013% (0.99987)  
CY 2017 Target Recapture Amount -0.18% (0.9982)  
CY 2017 Imaging MPPR Adjustment -0.07% (0.9993)  
CY 2017 Conversion Factor   35.8887

Each year CMS publishes a proposed PFS rule, accepts comments on the stated proposals and then responds with a final rule that includes commentary on the proposals they are finalizing and those they are not.

CMS estimates the 2017 PFS estimated impact on total allowed charges for hematology/oncology and radiation oncology to be 0%.

The 2017 Medicare PFS final rule includes the following finalized proposals that may be of interest to oncologists:

  • Separate payment for non-face-to-face prolonged evaluation and management (E/M) services CPT® codes (99358-99359).
  • Changes to reduce administrative burden associated with the chronic care management codes to remove potential barriers to furnishing and billing for these services.
  • Separate payments for codes describing chronic care management for patients with greater complexity (99487-99489).
  • New behavioral health integration codes.
  • Finalized certain components of the appropriate use criteria for advanced diagnostic imaging.

Non-face-to-face Prolonged Evaluation and Management Services

In the past, CMS declined separate payment for most services without patient contact stating that the related services were bundled into CPT codes that were separately paid. As an example, CPT codes 99358 and 99359 were both listed as status code B, or a bundled code, for which separate payment is not made.

However, in the 2017 proposed PFS rule, CMS suggested they were open to covering the non-face-to-face evaluation and management (E/M) services described by CPT codes 99358 and 99359. And, in the 2017 final PFS rule, after consideration of comments received, CMS determined that separate payments for CPT codes 99358 and 99359 would provide a means for physicians and other billing practitioners to receive payment that more appropriately accounts for time that they spend providing non-face-to-face care.

CMS states that these codes would allow for recognition of the additional resource costs of physicians, and other practitioners, when they spend an extraordinary amount of time outside the in-person office visit caring for the individual needs of their patients. Furthermore, CMS states that such recognition and payment for these services would be beneficial to Medicare beneficiaries and consistent with CMS' goals related to patient centered care.

The prolonged service codes are time-based; prolonged service of less than 30 minutes total is not separately reported. CPT guidelines for CPT codes 99358 and 99359 include the following instruction related to reporting these services, "This prolonged service may be reported on a different date than the primary service to which it is related. For example, extensive record review may relate to a previous evaluation and management service performed earlier and commences upon receipt of past records. However, it must relate to a service or patient where (face-to-face) patient care has occurred or will occur and relate to ongoing patient management." 4

CMS reminds providers, the time counted towards CPT codes 99358 and 99359 must be separate and distinct from time spent providing any other service reimbursable under the MPFS including, but not limited to, new and established patient office visits, transitional or chronic care management (CCM) services, or care plan development.

In finalizing their proposal for separate payment for the non-face-to-face prolonged service codes, CMS states they will adopt the CPT code descriptors and prefatory language for reporting these services. CMS will also follow CPT guidance that allows the prolonged time to be reported on a different day than the companion code. CPT 99358 is not an add-on code. It can be reported on a day when no other service is provided. CPT 99359 is an add-on code to CPT 99358.

Time counted towards CPT codes 99358 and 99359 describe services "furnished during a single day directly related to a discrete face-to-face service that may be provided on a different day, provided that the services are directly related to those furnished in a face-to-face visit."

In keeping with CPT guidelines, prolonged service codes 99358 and 99359, cannot be reported during the transitional care management (TCM) 30-day service period by the same practitioner who is reporting the TCM (CPT codes 99495 and 99496). Additionally, complex CCM (CPT codes 99487-99489) services cannot be reported during the same month as prolonged service codes 99358 and 99359, when reported by a single practitioner.

Addendum B of the final rule shows the 2017 unadjusted national non-facility rate for CPT 99358 is approximately $113.41 and the non-facility rate for CPT 99359 is approximately $54.55. 5

Reduced Administrative Burden for Chronic Care Management

CMS finalized several proposed changes in the payment rules for chronic care management (CCM). The changes are meant to reduce the burden and regulatory complexity of providing Chronic Care management and thus increase the number of physicians furnishing these services.

Finalized changes that are effective January 1, 2017:

CCM Initiating Visit & Add-on Code (G0506): An initiating visit is only required for new patients or patients not seen within the last twelve months.

CMS will now pay physicians for developing the CCM-required care plan under a new temporary code G0506; this is an add-on code to describe work performed by the billing practitioner once, in conjunction with the start or initiation of CCM services.

CMS provides the following description for code G0506: Comprehensive assessment of and care planning by the physician or other qualified health care professional for patients requiring chronic care management services, including assessment during the provision of a face-to-face service (billed separately from monthly care management services) (Add-on code, list separately in addition to primary service).

As an add-on code to the CCM initiating visit, G0506 is to be reported only once by the billing practitioner for a given beneficiary. CMS also alerts providers that this code should only be reported when the billing practitioner's effort and time exceeded the usual effort described by the initiating visit code. The national average payment rate for G0506 is $63.88 (non-facility) and $46.30 (facility).

24/7 Access to Care: After hours access to the beneficiary's electronic care plan is not required and removes restrictions on allowing the care plan to be faxed.

Consent Form: A signed consent form is optional, but documentation in the medical record must state that the beneficiary accepted or declined CCM services that were explained to him/her.

Sharing of Care Plan: Requires timely electronic sharing of care plan information within and outside the billing practice, but not necessarily on a 24/7 basis. The care plan may be transmitted by fax.

Management of Care Transitions: The billing physician must create and exchange/transmit continuity of care document(s) timely with other practitioners and providers. No standardized content, specific format or specific means of transmission is required.

Beneficiary Receipt of Care Plan: A copy of the care plan must be given to the patient or caregiver. No specification of the format.

Documentation: The use of a qualifying certified EHR to document communication to and from home and community based providers regarding the beneficiary's psychosocial needs and functional deficits are no longer required. But this communication and the beneficiary consent must still be documented in the medical record.

Additional details on the required service elements for CCM services are summarized in table 11 in the final rule.

Complex Chronic Care Management Services

Medicare has paid separately for non-face-to-face care coordination services furnished to Medicare beneficiaries with multiple chronic conditions (CPT code 99490) since 2015. In the 2017 proposed rule, CMS discussed their intention to more appropriately recognize and expand payment for CCM services by paying for complex CCM services through CPT codes 99487 and 99489. CMS finalized the proposal and accepted the American Medical Association/Specialty Society Relative (Value) Update Committee (RUC) recommended payment inputs for CPT 99487 and 99489.

CPT Description Estimated National
99487 Complex chronic care management services, with the following required elements:
++ Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient;
++ Chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline;
++ Establishment or substantial revision of a comprehensive care plan;
++ Moderate or high complexity medical decision making;
99489 Each additional 30 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month (List separately in addition to code for primary procedure). $47.01

Psychiatric Collaborative Care Model Services

CMS established four new Behavioral Health Integration (BHI) codes. Three of these codes (G0502, G0503, and G0504) apply to care provided under the Psychiatric Collaborative Care Model (CoCM). And one code (G0507) is a general BHI code.

The three new CoCM codes were developed to capture CoCM services in which a primary care team, consisting of a primary care provider and a care manager, work in collaboration with a psychiatric consultant, such as a psychiatrist.

However, CMS does not intend that CoCM services be restricted to primary care. CMS states that the psychiatric CoCM has also been used in cardiology and oncology practice. CMS says they believe CoCM could be used in various medical specialty settings when the specialist physician is managing the beneficiary's behavioral health condition(s) as well as other medical conditions (for example, cancer, status-post acute myocardial infarction and other conditions where co-morbid depression is common).

Psychiatrists are not expected to bill the psychiatric CoCM codes, as psychiatric work is defined as a sub-component of the psychiatric CoCM codes.

The new general BHI code (G0505) describes services performed by physicians or other healthcare professionals such as nurse practitioners or physician assistants, to assess and create a care plan for beneficiaries with cognitive impairment.

Finalized code descriptions and required elements:

G0502: Initial psychiatric collaborative care management, first 70 minutes in the first calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional, with the following required elements:

  • Outreach to and engagement in treatment of a patient directed by the treating physician or other qualified health care professional;
  • Initial assessment of the patient, including administration of validated rating scales, with the development of an individualized treatment plan;
  • Review by the psychiatric consultant with modifications of the plan if recommended;
  • Entering patient in a registry and tracking patient follow-up and progress using the registry, with appropriate documentation, and participation in weekly caseload consultation with the psychiatric consultant; and
  • Provision of brief interventions using evidence-based techniques such as behavioral activation, motivational interviewing, and other focused treatment strategies.

G0503: Subsequent psychiatric collaborative care management, first 60 minutes in a subsequent month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional, with the following required elements:

  • Tracking patient follow-up and progress using the registry, with appropriate documentation;
  • Participation in weekly caseload consultation with the psychiatric consultant;
  • Ongoing collaboration with and coordination of the patient's mental health care with the treating physician or other qualified health care professional and any other treating mental health providers;
  • Additional review of progress and recommendations for changes in treatment, as indicated, including medications, based on recommendations provided by the psychiatric consultant;
  • Provision of brief interventions using evidence-based techniques such as behavioral activation, motivational interviewing, and other focused treatment strategies;
  • Monitoring of patient outcomes using validated rating scales; and relapse prevention planning with patients as they achieve remission of symptoms and/or other treatment goals and are prepared for discharge from active treatment.

G0504: Initial or subsequent psychiatric collaborative care management, each additional 30 minutes in a calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional (List separately in addition to code for primary procedure) (Use G0504 in conjunction with G0502, G0503).

G0507: Care management services for behavioral health conditions, at least 20 minutes of clinical staff time, directed by a physician or other qualified health care professional, per calendar month, with the following required elements:

  • Initial assessment or follow-up monitoring, including the use of applicable validated rating scales;
  • Behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes;
  • Facilitating and coordinating treatment such as psychotherapy, pharmacotherapy, counseling and/or psychiatric consultation; and
  • Continuity of care with a designated member of the care team.

Appropriate Use Criteria Program

The final rule also includes provisions mandated in Section 218(b) of the Protecting Access to Medicare Act (PAMA) of 2014. PAMA establishes a new program under the statute for fee-for-service Medicare to promote the use of appropriate use criteria (AUC) for advanced diagnostic imaging services. Through PAMA, AUC is defined as, "criteria only developed or endorsed by national professional medical specialty societies or other provider-led entities, to assist ordering professionals and furnishing professionals in making the most appropriate treatment decision for a specific clinical condition for an individual. To the extent feasible, such criteria shall be evidence-based." 6

Under this program, providers would consult AUC clinical guidelines by entering patient clinical data into an electronic clinical decision support (CDS) tool to determine the appropriateness of the service for that patient.

CMS first introduced the AUC program in the 2016 PFS final rule, through which several program policies were established and CMS discussed the identification of priority clinical areas (PCAs). In the 2017 PFS final rule, CMS established the clinical decision support mechanism (CDSM) requirements, and the CDSM application process.

The deadline for when ordering providers must consult AUC through a qualified CDSM has been established as January 1, 2018. At that time, ordering providers must consult a qualified CDSM during ordering. And the furnishing provider, will be responsible for reporting that the CDSM was consulted, if the order adheres to AUC or whether no criteria in the CDSM was applicable to the patient's clinical scenario, and the national provider identifier (NPI) of the ordering professional.

The establishment of PCAs serve as part of the basis for identifying outlier ordering professionals, those professionals with low adherence to the applicable AUC. In the final rule, CMS identified the first eight PCAs for the AUC program including: (1) Coronary artery disease (suspected or diagnosed); (2) Suspected pulmonary embolism; (3) Headache (traumatic and non-traumatic); (4) Hip pain; (5) Low back pain; (6) Shoulder pain (to include suspected rotator cuff injury); (7) Cancer of the lung (primary or metastatic, suspected or diagnosed); and (8) Cervical or neck pain.

Additional details on the AUC program will be addressed in future rulemaking.

2017 Hospital Outpatient Prospective Payment System Final Rule 7

On November 1, 2016, CMS issued the 2017 Medicare Outpatient Prospective Payment System (OPPS) Final Rule. This rule provides payment policy and rate updates for hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs).

OPPS Payment Rate Update

Both ASCs and HOPDs will see an increase in payment rates in 2017. CMS finalized a 1.9% increase to ASC payment rates and a 1.65% increase to hospital outpatient rates.

Separately Payable Drug Payments and Packaging Threshold

Payment for all separately payable drugs, biologicals, and radiopharmaceuticals (with or without pass-through status) continues to be made at average sale price (ASP), plus 6%.

The packaging threshold for drugs, biologicals, and radiopharmaceuticals increases to $110 for 2017, which represents a $10 increase.

Site-Neutral Payments for Provider Based Departments

In the OPPS final rule, CMS finalized its regulations implementing Section 603 of the Bipartisan Budget Act of 2015. This provision establishes Medicare Physician Fee Schedule (MPFS) rates for certain items and services furnished in certain off-campus outpatient departments of a provider.

Effective January 1, 2017, hospital off-campus provider-based departments other than emergency rooms that began furnishing services on or after November 2, 2015 (referred to as new provider based departments (PBDs), no longer will be eligible for payment under OPPS.

Instead, these new PBDs will be reimbursed according to new MPFS payment rates, which will be set at a rate that is generally 50% of the OPPS rate for each nonexcepted item and service. Nonexcepted services and items furnished in a new PBD will continue to be billed on the institutional claim, however, they must be appended with the Healthcare Common Procedure Coding System (HCPCS) modifier 'PN'.

Packaging and other OPPS policies will continue to apply. Physicians and non-physician practitioners will continue to bill for professional services as they do now, and to be reimbursed at the existing MPFS facility rate.

CMS received comments both for and against allowing 340B eligibility of nonexcepted off-campus PBDs. Some comments reasoned that the intention of the site-neutral provision was to remove incentives to provide care in the outpatient setting that could be provided in a physician's office, and therefore, nonexcepted PBDs should not be eligible for the 340B drug program. CMS reports that the majority of the commenters indicated that they felt that the site-neutral provision in section 603 did not mention the 340B drug program and therefore it should not be affected by the implementation of section 603.

CMS responded that services provided at nonexcepted off-campus PBDs would still be reported on the hospital cost report. CMS referred interested parties to Health Resources and Services Administration (HRSA) for questions on eligibility under the 340B program.

In the proposed rule, CMS stated their intention to limit the items and services that an excepted off-campus PBD could continue to bill under the OPPS beginning January 1, 2017, to those items and services that are part of a clinical family of services furnished and billed by the PBD prior to November 2, 2015.

The intent was to limit the expansion of the type of services provided at the excepted off-campus PBDs, which could result in newly purchased physician practices furnishing services that are paid at OPPS rates. In the final rule, CMS addressed the large number of commenters opposed to their proposal and determined not to finalize their proposed policy to limit service line expansion. However, CMS said they would monitor for potential shifting of services to excepted off-campus and on-campus PBDs.

CMS finalize their proposed policy on relocation of excepted off-campus PBDs. In response to comments received, CMS included in their finalized relocation policy an exception for certain circumstances. Therefore, the finalized policy states that excepted off-campus PBDs, and the items and services that are furnished by such departments, would no longer be excepted if the excepted off-campus PBD moves or relocates from the physical address that was listed on the provider's hospital enrollment form as of November 1, 2015. An exception is possible if the relocation was due to extraordinary circumstances outside of the hospital's control. CMS says the exceptions will be evaluated and determined on a case-by-case basis and are expected to be rare and unusual.

CMS will continue to monitor the use of the 'PO' off-campus outpatient services modifier, as well as the new 'PN' non-excepted services modifier at sites impacted by site-neutral payments.


1 Federal Register Vol. 81, No. 220. Tuesday November 15, 2016. Final Rule. Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model; Medicare Shared Savings Program Requirements. https://www.gpo.gov/fdsys/pkg/FR-2016-11-15/pdf/2016-26668.pdf. Accessed November 15, 2016.

2 Congress.gov. H.R.2 Medicare Access and CHIP Reauthorization Act of 2015. https://www.congress.gov/bill/114th-congress/house-bill/2/text. Accessed November 15, 2016.

3 Congress.gov. H.R.5771 To amend the Internal Revenue Code of 1986 to extend certain expiring provisions and make technical corrections, to amend the Internal Revenue Code of 1986 to provide for the tax treatment of ABLE accounts established under State programs for the care of family members with disabilities, and for other purposes. https://www.congress.gov/bill/113th-congress/house-bill/5771. Accessed November 15, 2016.

4 AMA CPT® 2016. Guidelines Evaluation & Management - Prolonged Services.

5 CMS.gov. CY 2017 PFS Final Rule Addenda. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices-Items/CMS-1654-F.html?DLPage. Accessed November 15, 2016.

6 Congress.gov. H.R.4302 Protecting Access to Medicare Act of 2014. https://www.congress.gov/bill/113th-congress/house-bill/4302. Accessed November 15, 2016.

7 Federal Register Vol. 81, No. 219. Monday, November 14, 2016. Rules and Regulations. Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Organ Procurement Organization Reporting and Communication; Transplant Outcome Measures and Documentation Requirements; Electronic Health Record (EHR) Incentive Programs; Payment to Nonexcepted Off-Campus Provider- Based Department of a Hospital; Hospital Value-Based Purchasing (VBP) Program; Establishment of Payment Rates Under the Medicare Physician Fee Schedule for Nonexcepted Items and Services Furnished by an Off-Campus Provider- Based Department of a Hospital. https://www.federalregister.gov/documents/2016/11/14/2016-26515/medicare-program-hospital-outpatient-prospective-payment-and-ambulatory-surgical-center-payment. Accessed November 15, 2016.

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

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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 2017 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 ©2017 Oplinc, Inc.

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

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