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

Volume 11, Issue 1 Download for iPad

On October 30, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a final rule updating payment rates and quality provisions for services provided under the Medicare Physician Fee Schedule (PFS).

The 2016 PFS final rule is the first PFS final rule since the repeal of the Sustainable Growth Rate (SGR) formula, and as such it includes provisions reflecting the mandate for CMS to move to a system that is increasingly based on payment for quality and cost of care rather than the traditional fee-for-service methodology.

2016 Medicare Physician Fee Schedule Final Rule.1,2

SGR Repeal and Calculating the 2016 Conversion Factor

For the past 12 years, unable to agree upon a permanent fix for the flawed SGR formula, Congress has stepped in to temporarily stop the cuts to the Medicare physician payment rate that would have otherwise occurred under the formula. Finally, in 2015, Congress came together and passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA repeals the SGR formula and provides a positive 0.5% update annually until 2019.

Still, there are other legislative requirements that impact the 2016 Medicare conversion factor including the mandatory neutrality adjustment (BNA) provisions under the Protecting Access to Medicare Act of 2014 (PAMA), signed into law on April 1, 2014, and the Achieving a Better Life Experience Act of 2014 (ABLE), which was signed into law on December 19, 2014.

The Social Security Act requires the Centers for Medicare & Medicaid Services (CMS) to make adjustments to preserve budget neutrality when adjustments to Relative Value Units (RVUs) would cause Medicare expenditures to increase or decrease by more than $20 million. For calendar year (CY) 2016 the RVU BNA is -0.02 percent (0.9998).

PAMA was the legislation Congress passed in 2014 to delay the pending April 1, 2014, SGR cuts in the Medicare reimbursement rate until March 2015. Included in PAMA were provisions to pay for the temporary delay including a requirement that CMS achieve a savings target of 0.5 percent of the estimated Medicare physician fee schedule costs through adjustments to misvalued codes for calendar years (CYs) 2017 through 2020.

The target adjustment for savings through the reductions in misvalued codes was accelerated by the ABLE legislation, which mandated that the application of the target for misvalued codes would apply for CYs 2016 through 2018 and increased the target to 1.0 percent in CY 2016. Furthermore, if the reductions in PFS expenditures from changes in values for misvalued codes in 2016 are not equal to or greater than the target, a reduction equal to the difference between the target and the estimated net reduction in expenditures resulting from misvalued code reductions must be made to all PFS services.

For 2016, CMS identified changes through the misvalued codes that achieve 0.23 percent in net reductions. Because the net reductions fall short of the target of 1.0 percent, a 0.77 percent reduction will be applied to all PFS services in 2016, as required by the statute.

Figure 1 illustrates the calculation of the 2016 conversion factor with the 0.5 percent update mandated through the MACRA, the BNA adjustment of 0.02 percent, and the 2016 misvalued services target recapture amount of 0.77 percent.

Calculating the 2016 Conversion Factor

CY 2015 Conversion Factor


Update Factor (mandated through MACRA)

+0.5% (1.005)

CY 2016 RVU Budget Neutrality Adjustment (BNA)

-0.02% (0.9998)

CY 2016 Target Recapture Amount

-0.77% (0.9923)

CY 2016 Conversion Factor


Figure 1: Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2016; Final Rule

Physician Quality Reporting System (PQRS)

CMS finalized the same criteria established for the 2017 PQRS payment adjustment, which is generally to require the reporting of nine measures covering three National Quality Strategy domains.

CMS also finalized the proposal to add a reporting option that will allow group practices to report quality measures data using a Qualified Clinical Data Registry (QCDR).

If an individual eligible provider (EP) or group practice does not satisfactorily report or satisfactorily participate while submitting data on PQRS quality measures, a 2.0 percent negative payment adjustment would apply in 2018.

The last reporting period for the PQRS is 2016, and the 2018 PQRS payment adjustment is the last adjustment that will be issued under the PQRS. Future adjustments will be made under the new Merit-Based Incentive Payment System (MIPS), as required by MACRA.

Physician Feedback Reporting/Value-Based Payment Modifier

The Value-Based Payment Modifier (VM) is a pay-for-performance program specific to FFS Medicare that provides for differential payment under the PFS based on the quality of care furnished compared to the cost of care during a performance period.

The VM program was mandated through the Medicare Improvements for Patients and Providers Act (MIPPA) and expanded by the Affordable Care Act (ACA) of 2010.

Under the VM program, CMS is to provide information to physicians and group practices about the resources used and the quality of care provided to their Medicare FFS patients, including measurement comparisons of patterns of resource use and cost among physicians and medical practice groups.

The VM program is based on participation and performance in the PQRS program. PQRS participating physicians receive confidential physician feedback reports containing the information that will be used in calculating the value modifier including measurement comparisons of patterns of resource use and cost among physicians and medical practice groups.

The VM applies to all physicians beginning in 2017. There is a two-year lag between the performance period and the adjustment period. The performance period for the VM adjustment that will be applied to physicians' 2017 Medicare payment was 2015. Similarly, this year (2016) is the performance period for the 2018 VM payment adjustment. There are two components to the VM program: the automatic penalty and mandatory quality-tiering.

Component #1: Automatic Penalty

The automatic VM adjustment is based on PQRS participation. Physicians and group practices that are not successful PQRS reporters will be subject to the PQRS negative payment adjustment of -2% as well as the automatic VM negative payment adjustment (-2% for physician groups with between 2-9 EPs and solo practitioners, and -4% for physician groups with 10 or more EPs).

The VM payment penalty for not successfully reporting in the PQRS are separate and in addition to the 2% PQRS penalty.

Component #2: Mandatory Quality-tiering

Under the quality-tiering component, CMS looks at the quality and cost of care furnished to Medicare beneficiaries and adjusts the physician's payment based on Medicare's Quality and Resource Use Reports (QRURs). The quality measures include the CMS calculated quality outcome measures and PQRS quality measures. Cost measures include the per capita costs for all attributed beneficiaries and the per capita costs for beneficiaries with certain specific conditions.

CMS finalized their proposal to expand the VM program beyond what was required by the ACA by extending the VM to certain nonphysician providers. As a result, in 2018 the VM payment adjustment will apply to physicians, PAs, NPs, CNSs, and CRNAs in group practices and to those providers who are solo practitioners.

In 2018 all group practices and solo practitioners will be subject to upward, neutral, or downward adjustments under the VM quality-tiering component, with the exception of NPPs who are solo practitioners and group practices comprised solely of NPPs.

Under the VM quality-tiering component in 2018, the maximum upward adjustment will be +4.0 times an adjustment factor for groups with 10 or more EPs, and +2.0 times an adjustment factor for groups of 2-9 EPs and solo practitioners. The VM program must be budget neutral; therefore, the upward adjustment factor will be determined once the downward payment adjustments are calculated.

The maximum downward adjustment for 2018 shall be -4.0% for groups with 10 or more EPs and -2.0% for all other groups and solo practitioners (with the exception of NPP-only groups and NPPs who are solo practitioners).

As a reminder, due to the 2-year lag, the reporting period for the 2018 VM is CY 2016. In figure 2, CMS illustrates the finalized policies for the 2018 VM payment adjustment.

Figure 2: MLN Connects Medicare Quality Reporting Programs: 2016 Physician Fee Schedule Final Rule

For CY 2018, CMS will waive application of the Value Modifier for groups and solo practitioners, as identified by their Taxpayer Identification Number (TIN), if at least one EP who billed for Medicare Physician Fee Schedule (PFS) items and services under the TIN during the applicable performance period for the VM participated in one of the following during the performance period, beginning with the CY 2017 payment adjustment period:

  • The Pioneer ACO Model,
  • Comprehensive Primary Care Initiative (CPCI), or
  • Other similar Innovation Center model (such as Comprehensive ESRD Care Initiative, Oncology Care Model (OCM), and the Next Generation ACO Model).

Advanced Care Planning (ACP)

In 2015, the American Medical Association (AMA) developed two new Current Procedural Terminology (CPT®) codes 99497 and 99498 for advance care planning (ACP) services. In the 2015 Final Rule, CMS recognized these new codes but declined separate coverage for them.

However, in the 2016 Final Rule, CMS determined that ACP services would be separately payable starting January 1, 2016. Medicare will cover ACP as a separate service provided by physicians and other health professionals (such as nurse practitioners who bill Medicare using the physician fee schedule), in medical offices and facility settings, including hospitals.

CMS recommends that practitioners inform beneficiaries of the voluntary nature of ACP services and also that ACP services will be subject to separate cost sharing unless provided as part of the annual wellness visit (AWV). When billed with an AWV, the ACP codes 99497 and 99498 must be billed with modifier 33 (Preventative Services). Because payment for an AWV is limited to only once a year, the deductible and coinsurance for ACP billed with an AWV can only be waived once a year. Additionally, because ACP services are voluntary, Medicare beneficiaries may decline to receive the services.

For Medicare beneficiaries who choose to pursue it, ACP is a service that includes early conversations between patients and their practitioners, both before an illness progresses and during the course of treatment, to decide on the type of care that is right for them.

Codes 99497 and 99498 are used to report the face-to-face service between a physician or other qualified health care professional and a patient, family member, or surrogate in counseling and discussing advance directives, with or without completing relevant legal forms.

An advance directive is a document appointing an agent and/or recording the wishes of a patient pertaining to his/her medical treatment at a future time should he/she lack decisional capacity at that time.

Examples of written advance directives include, but are not limited to:

  • Health Care Proxy,
  • Durable Power of Attorney for Health Care,
  • Living Will, and
  • Medical Orders for Life-Sustaining Treatment (MOLST).

CPT codes 99497 and 99498 may be billed on the same day or a different day as other E/M services, and during the same service period as transitional care management (TCM) or chronic care management (CCM) services and within global surgical periods. However, when using codes 99497 and 99498, no active management of the problem(s) is undertaken during the time period reported.

ACP Codes may be billed with the following
evaluation and management E/M services:

  • New and established patient office visit (99201-99215)
  • Observation initial, subsequent, and discharge care (99217-99220, 99224-99226)
  • Initial, subsequent, and discharge hospital service (99221-99233, 99238-99239)
  • Observation or inpatient admit and discharge on the same date (99234-99236)
  • Outpatient and inpatient consultation (99241-99255)
  • Emergency department visit (99281-99285)
  • Initial, subsequent, and discharge nursing facility care (99304-99316)
  • Annual nursing facility assessment (99318)
  • New, established, and discharge domiciliary or rest home visit (99234-99337)
  • New and established patient home visit (99341-99350)
  • Initial and periodic preventive medicine (99381-99397)
  • Transitional Care Management Service (99495-99496)

ACP Codes cannot be billed in combination with:

  • Critical care (99291, 99292)
  • Inpatient neonatal and pediatric critical care (99468-99476)
  • Initial and continuing intensive care service (99477-99480)

CMS did not include in the final rule any specific documentation requirements for use of the new ACP CPT codes, although they did state that when they adopt CPT codes for payment, they generally also adopt CPT coding guidance. In particular, CMS states it is adopting CPT guidance prohibiting the reporting of CPT codes 99497 and 99498 on the same date of service as certain critical care services including neonatal and pediatric critical care.

The ACP codes are time-based codes, and as with other time-based codes documentation should include the total time spent providing ACP services. CPT code 99497 is to be billed for the first 30 minutes of ACP services, and the add-on code 99498 is to be billed for each additional 30 minutes. When provided on the same day as other E/M services, the time spent on ACP services are not to be used to meet time-based criteria for an E/M code.

CMS addressed comments as to who should be allowed to bill Medicare for ACP services, stating that the ACP CPT code descriptors describe services furnished by physician or other qualified professionals, which, CMS states, is consistent with allowing these codes to be billed by the physicians and nonphysician practitioners (NPPs) whose scope of practice and Medicare benefit category include the services described by the CPT codes and who are authorized to independently bill Medicare for those services. There are no specific performance standards, special training, or quality measures a provider must satisfy to bill for ACP.

All "Incident to" rules apply when ACP services are furnished incident to the services of the billing practitioner, which means that the physician or NPP must provide direct supervision. Furthermore, CMS expects the billing physician or NPP to manage, participate, and meaningfully contribute to the provision of the services.

CPT Code


Unadjusted Payment


Advance care planning including the explanation and discussion of advance directives such as standard forms (with completion of such forms, when performed), by the physician or other qualified health-care professional; first 30 minutes, face-to-face with the patient, family member(s), and/or surrogate.



Advance care planning including the explanation and discussion of advance directives such as standard forms (with completion of such forms, when performed), by the physician or other qualified health-care professional; each additional 30 minutes (List separately in addition to code for primary procedure.)


Figure 3: www.cms.gov/Center/Provider-Type/Physician-Center.html

"Incident To" CY 2016

CMS did not finalize the proposal to delete the final sentence of the "incident to" regulatory language. Instead, CMS will revise the sentence to reflect that the physician (or other practitioner) supervising the auxiliary personnel need not be the same physician (or other practitioner) treating the patient.

CMS will add clarifying language specifying that only the physician or other practitioner under whose supervision the incident to service(s) are being provided is permitted to bill the Medicare program for the incident to services.

CMS will also amend the definition of auxiliary personnel permitted to provide "incident to" services to exclude individuals who have been excluded from the Medicare, Medicaid, or any other federal health program or have had their enrollment revoked at the time the incident to service or supply is provided.

Potentially Misvalued Codes

The ACA instructed CMS to identify misvalued codes in the Physician Fee Schedule, and as discussed earlier in this newsletter, CMS does this through the annual rulemaking process.

In the CY 2015 PFS rule, CMS proposed and finalized the high expenditure by specialty screen as a tool to identify potentially misvalued codes in the statutory category of "codes that account for the majority of spending under the PFS."

In the 2016 Proposed Physician Fee Schedule Rule, through their review of high expenditure services across specialties with Medicare allowed charges of $10,000,000 or more, CMS identified the codes they proposed to revalue including several CPT codes for hydration and drug administration services.

In their comments on the proposed rule, the American Society of Clinical Oncology (ASCO) recommended that CMS use methodologies other than the "high expenditure by specialty screen" to identify potentially misvalued codes stating that the CMS methodology is overly inclusive, doesn't target codes that are likely to be misvalued, and creates unnecessary administrative burdens on CMS staff and medical societies.3

In the final rule, CMS acknowledged the various comments received and finalized 103 codes as potentially misvalued services including the following CPT codes for hydration, therapeutic/diagnostic, and chemotherapy administration: 96360, 96372, 96374, 96375, 96401, 96402, 96409, and 96411.

CMS will solicit recommended values for these codes from the American Medical Association's Relative Value Scale Update Committee (RUC) and other interested stakeholders.

On December 19, 2015, ASCO submitted comments to CMS regarding the 2016 final rule and urging CMS to reverse its designation of the eight chemotherapy administration codes as potentially misvalued under the high-expenditure specialty screen, which ASCO believes to be inherently flawed.4

Transitional Care Management

Transitional Care Management (TCM) codes (CPT 99495 and 99496) allow for reimbursement of the non-face-to-face care provided when patients transition from an acute care setting back into the community. TCM codes are used to bill for the 30-day period following an inpatient discharge.

Previously, TCM services were to be billed to Medicare at the conclusion of the 30-day post discharge period. But in the 2016 final rule, CMS states that effective January 1, 2016, they are adopting commenters' suggestions, that the required date of service reported on the claim be the date of the face-to-face visit, and to allow (but not require) submission of the claim when the face-to-face visit is completed, consistent with current policy governing the reporting of global surgery and other bundles of services under the PFS.

CMS explained that this change will expedite the billing process for providers.

Biosimilar Reimbursement

Biosimilars are a type of biological product that are approved by the Food and Drug Administration (FDA) because they are highly similar to an already FDA-approved biological product, known as the reference product, and have been shown to have no clinically meaningful differences from the reference product.5

CMS finalized its proposal to group all biosimilars to a single reference product under the same HCPCS code, with the reference product maintaining a separate code.

Payment amounts for biosimilar products will be based on the average sales price (ASP) of all biosimilar products included within the same billing and payment code, as opposed to determining a specific reimbursement rate for each biosimilar product.

In the future, CMS may develop unique modifiers for each of these drugs for individual identification. CMS also stated that they will consider whether further refinements to their biosimilar payment policy may be necessary as the market develops in the future.

Physician Compare

Physician Compare was mandated by the ACA and is a CMS website developed to help Medicare beneficiaries find and choose physicians and other health care professionals so they can make informed choices about the health care they receive.

Initially, the information contained on Physician Compare included basic demographic information such as gender, education, group affiliations, hospital affiliations, languages spoken, and whether they accepted Medicare assignment.

CMS continues to expand public reporting on performance measures that are statistically accurate, valid, reliable, and comparable, and that will help consumers make a decision about choosing a health care professional or group practice. Currently, certain clinical qualities of care measures reported by group practices are reported on Physician Compare. The performance scores are based on the PQRS quality measures the group practice reports.

Beginning in 2014, group practices participating in the PQRS Group Practice Reporting Option (GPRO) could choose to supplement their PQRS reporting with the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey. CAHPS is a program of the U.S. Agency for Healthcare Research and Quality.

The CAHPS® for PQRS Survey for group practices participating in the PQRS was developed to collect information about patient experience and care within that practice. The CAHPS for PQRS Survey collects data through two survey mailings and follow-up phone calls to nonrespondents to measure the 12 key domains (listed below) of beneficiaries' experiences of care.6

The CAHPS for PQRS Survey measures 12 key domains of beneficiaries' experiences of care6:

  1. Getting Timely Care, Appointments, and Information
  2. How Well Providers Communicate
  3. Patient's Rating of Provider
  4. Access to Specialists
  5. Health Promotion and Education
  6. Shared Decision Making
  7. Health Status/Functional Status
  8. Courteous and Helpful Office Staff
  9. Care Coordination
  10. Between Visit Communication
  11. Helping You to Take Medication as Directed
  12. Stewardship of Patient Resources

The CAHPS for PQRS Survey is only open to group practices participating in the PQRS GPRO, and the CAHPS PQRS Survey can only be administered by a CMS-approved survey vendor. The list of approved vendors will be listed on the CAHPS® for Physician Quality Reporting System webpage www.pqrscahps.org.

As shown in figure 4, the CAHPS surveys include topics such as the communication skills of health care professionals, the accessibility of timely care, appointments and information, health promotion and education, patients' rating of doctors, courteous and helpful office staff, health care professionals working together for your care, between visit communication, and attention to patient medication cost.

The performance scores are represented by full or partial stars. There is a maximum score of five stars with each star representing 20%, so four stars represents a score of 80%. To the right side of the stars is the actual numeric score of the measure.

Medicare beneficiaries or others viewing the information can click on the description of the measure to get detailed information on that particular measure, including what the criteria is and how Medicare measured it.

Providers should carefully review the reported information on Physician Compare to ensure that it is accurate and up-to-date. CMS provides FAQs and information on updating and editing data on Physician Compare on their website at: www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/physician-compare-initiative/Updating_and_Editing_Data_on_Physician_Compare.html.

You may also email comments and questions to the Physician Compare team at PhysicianCompare@westat.com.

Figure 4: Physician Compare. Accessed February 2, 2016.

In 2016, CAHPS for PQRS is:

  • Optional for PQRS group practices of 2-99 EPs reporting electronically, using a Qualified Clinical Data Registry (QCDR), or a Qualified Registry;
  • Optional for PQRS group practices of 25-99 EPs reporting via GPRO Web Interface (WI);
  • Required for all PQRS group practices of 100 or more EPs, regardless of reporting mechanism.

CMS is also finalizing the following proposals:

  • To continue making individual-level QCDR measures available for public reporting, and, new to 2016, to publicly report group-level QCDR measures;
  • To publicly report an item (or measure)-level benchmark derived using the Achievable Benchmark of Care (ABC™)* methodology, the benchmark will be displayed as a five-star rating. CMS will conduct analysis and stakeholder outreach around the star attribution methodology prior to public reporting in 2017;
  • To include in the downloadable database the Value Modifier tiers for cost and quality, noting if the group practice or EP is high, low, or neutral on cost and quality; a notation of the payment adjustment received based on the cost and quality tiers; and an indication if the individual EP or group practice was eligible to but did not report quality measures to CMS; and
  • To publicly report in the downloadable database utilization data for individual EPs.

* The developers of the ABC™ methodology state that the Achievable Benchmarks of Care (ABCs) are standards of excellence attained by top performers in a peer group and are easily and reproducibly calculated from existing performance data.7

CMS is not finalizing the proposal to include a visual indicator on profile pages for group practices and individual EPs who receive an upward adjustment for the Value Modifier.


2016 Hospital Outpatient Prospective Payment System (OPPS) Final Rule

The CMS final rule for the 2016 Hospital Outpatient Prospective Payment System was published in the Federal Register on November 13, 2015.

Effective Jan. 1, 2016, there will be a net decrease in OPPS payments of 0.4% and CMS estimates total OPPS payments for 2016 will decrease by approximately $13.3 million compared to the year prior, excluding estimated changes in enrollment, utilization, and case mix. The decrease for 2016 is attributable to a 2 percentage point reduction to the OPPS conversion factor.

New Place of Service Codes for Outpatient Departments

The new place of service (POS) codes and HCPCS modifier that were finalized in the 2015 OPPS Final Rule are now required to be used effective January 1, 2016.

CMS developed the new POS codes and the HCPCS modifier in response to the Medicare Payment Advisory Commission's (MedPAC) concerns about the increased payments made to physician offices that become part of hospital outpatient departments and the impact of these increased payments to Medicare beneficiaries and the Medicare program.

The new POS codes for professional services and the new HCPCS modifier for services, procedures and/or surgeries will allow for the collection of data about the frequency and types of services furnished in provider-based departments in off-campus locations.

Effective January 1, there are two new/revised codes to distinguish between on-campus and off-campus hospital outpatient departments. As shown in Figure 5, POS 19 - to designate off-campus providers based outpatient departments and a revised description for POS 22 which has been revised to designate on campus outpatient hospital departments. These POS codes are to be used for professional claims.


Place of Service Code

Place of Service Name

Place of Service Description

POS 19

Off Campus-Outpatient Hospital

A portion of an off-campus hospital provider based department that provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization. (Effective January 1, 2016)

POS 22

On Campus-Outpatient Hospital

A portion of a hospital's main campus that provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization. (Description change effective January 1, 2016)

Figure 5: Place of Service Codes for Professional Claims. Accessed February 2, 2016.

In CMS MLN Matters® Number: MM9231, CMS instructs providers, "that reporting outpatient hospital POS code 19 or 22 is a minimum requirement to trigger the facility payment amount under the Physician Fee Schedule (PFS) when services are provided to a registered outpatient. Therefore, you should use POS code 19 or POS code 22 when you furnish services to a hospital outpatient regardless of where the face-to-face encounter occurs."8

In the CY 2015 final rule CMS developed HCPCS modifier -PO: Services, procedures and/or surgeries provided at off-campus, provider-based outpatient departments. The use of the PO modifier was voluntary in 2015 but reporting this modifier is required beginning January 1, 2016.9

OPPS Physician Administered Drugs

In 2016, most physician administered drugs will continue to be paid at ASP plus 6%. However, as they have done each of the past several years, CMS has increased the packaging threshold at which drugs are bundled. In 2016, drugs amounting to $100 or less per day, by CMS calculation, will be bundled and will not be paid separately. This is up from the $95 per day threshold that was in place in 2015.


Other Legislative Actions

Bipartisan Budget Act of 2015

The Bipartisan Budget Act (BBA 2015) of 2015 was signed into law on November 2, 2015 by President Obama. Among the provisions included in this law are the Medicare site-neutral provision and the extension of the sequester.

Site Neutrality

The "site neutrality" provision addresses concerns that Medicare should not be paying different amounts for the same services based on the location or type of provider. The Medicare Payment Advisory Committee (MedPAC), a nonpartisan legislative branch agency that provides the US Congress with analysis and policy advice on the Medicare program, has been raising concerns about the impact on beneficiary cost-sharing and the impact on the Medicare program when physician offices become hospital outpatient departments and are paid at the higher OPPS rate for the same services previously reimbursed under the Medicare Physician Fee Schedule.10

In their March 2014 Report to the Congress, MedPAC states, "The Congress should direct the Secretary of Health and Human Services to reduce or eliminate differences in payment rates between outpatient departments and physician offices for selected ambulatory payment classifications."11

Under (Section 603) of the BBA, Congress moves towards site-neutral Medicare payments by excluding hospital off-campus outpatient departments from reimbursement under Medicare's more favorable outpatient prospective payment system (OPPS).12

Effective January 1, 2017, Medicare payments for most items and services furnished at an "off-campus" (defined as a physical area located more than 250 yards from the main hospital campus building or a remote location of the hospital) department of a hospital that was not billing as a hospital service prior to November 2, 2015, will be made under the Medicare Physician Fee Schedule (MPFS) or Ambulatory Surgery Centers (ASCs) fee schedule and eliminates their ability to charge a facility fee.

There are a number of questions regarding site neutrality provision that are yet to be answered including the "grandfathered" status of provider-based outpatient departments and how changes to the scope or volume of the services provided may impact their exemption to site neutrality.

Stay tuned for more information as it becomes available.

Sequestration Extended

The budget bill extends the across-the-board sequestration of Medicare payments for an additional year into fiscal year 2025. Under current law, Medicare payments for all items and services will be reduced 2% through 2023, and then 4% for the first six months of 2024.


1 Congress.gov. PUBLIC LAW 114-10-APR. 16, 2015. Accessed January 1, 2016.

2 Centers for Medicare & Medicaid Services. Fact Sheet, Proposed policy, payment, and quality provisions changes to the Medicare Physician Fee Schedule for Calendar Year 2016. Accessed January 1, 2016.

3 CMS Payment Policy Adds Administrative Burden, Doesn't Consider True Cost of Cancer Care. Accessed February 2, 2016.

4 ASCO Urges CMS to Maintain Current Reimbursement Levels for Chemotherapy Administration. Accessed February 2, 2016.

5 U.S. Food and Drug Administration, Information for Consumers (Biosimilars). Accessed February 2, 2016.

6 CAHPS® for Physician Quality Reporting System. Accessed February 2, 2016.

7 Improving Quality Improvement Using Achievable Benchmarks For Physician Feedback. Accessed February 2, 2016.

8 CMS MLN Matters® Number: MM9231 Revised. Accessed February 2, 2016.

9 Off-Campus Provider Based Department "PO" Modifier Frequently Asked Questions. Accessed February 2, 2016.

10 MedPAC Report March 2014, Chapter 3. Accessed February 2, 2016.

11 MedPAC Report to Congress, Appendix A, Commissioners' voting on recommendations. Accessed February 2, 2016.

12 H.R. 1314 Bipartisan Budget Act of 2015. Accessed February 2, 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

Newsletter Archives

Volume 10, Issue 2
Volume 10, Issue 1
Volume 9, Issues 4 & 5
Volume 9, Issue 3
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 2016 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 ©2016 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