Key decisions from CMS regarding PHYSICIAN reimbursement in 2015

On 10/31/14, Medicare released the CY2015 Physician Fee Schedule (PFS) final rule on its website (  This final rule has not yet been published in the Federal Register.  Key decisions include:

2015 Conversion Factor (CF) (page 534):

  • Physician Fee Schedule  CF, January 1, 2015 – March 31, 2015 = $35.8013
  • Physician Fee Schedule  CF,  April 1, 2015 – December 31, 2015 = $28.2239
  • Average Anesthesia CF, January 1, 2015- March 31, 2015 = $22.550
  • Average Anesthesia CF, April 1, 2015 – December 31, 2015 = $17.7913
  • Let’s hope the 2015 Republican Congress will intervene before the April 1st reduction!

Potentially Misvalued Services (page 94) include:

  • Codes & families of codes for which there has been the fastest growth.
  • Codes & families of codes that have experienced substantial changes in Practice Expenses (PEs).
  • Codes that are recently established for new technologies or services.
  • Multiple codes frequently billed in conjunction with furnishing a single service.
  • Codes with low relative values, particularly those often billed multiple times for a single treatment.
  • Codes which have not been subject to review since the implementation of the RBRVS.
  • For CY2015, CMS has added nine additional categories, which are:
    • Codes that account for the majority of spending under the PFS.
    • Codes for services that have experienced a substantial change in the hospital length of stay or procedure time.
    • Codes for which there may be a change in the typical site of service since the code was last valued.
    • Codes for which there is a significant difference in payment for the same service between different sites of service.
    • Codes for which there may be anomalies in relative values within a family of codes.
    • Codes for services where there may be efficiencies when a service is furnished at the same time as other services.
    • Codes with high intra-service work per unit of time.
    • Codes with high PE RVUs.
    • Codes with high cost supplies.

Since CY2009, CMS has reviewed over 1,250 potentially misvalued codes to refine work RVUs and direct PE inputs.  Annual review of potentially misvalued codes may include review of:

  • Documentation in the peer reviewed medical literature or other reliable data that show there have been changes in physician work due to one or more of the following:  technique; knowledge and technology; patient population; site-of-service; length of hospital stay; and work time.
  • An anomalous relationship between the code being proposed for review and other codes.
  • Evidence that technology has changed physician work, that is, diffusion of technology.
  • Analysis of other data on time and effort measures, such as operating room logs.
  • Evidence that incorrect assumptions were made in the previous valuation of the service, such as a misleading vignette, survey, or flawed crosswalk assumptions in a previous evaluation.
  • Prices for certain high cost supplies or other direct PE inputs that are used to determine PE RVUs are inaccurate and do not reflect current information.
  • Analyses of work time, work RVU, or direct PE inputs using other data sources (for example, VA NSQIP, STS National Database, and the PQRS databases).
  • National surveys of work time and intensity from professional and management societies and organizations, such as hospital associations.

CMS proposed 68 codes, listed in Table 11, as potentially misvalued codes under the newly established statutory category, “codes that account for the majority of spending under the physician fee schedule.”

Concerns with the 10- and 90-Day Global Packages (page 129)

CMS supports bundled payments as a mechanism to incentivize high-quality, efficient care. Although on the surface, the PFS global codes appear to function as bundled payments similar to those Medicare uses to make single payments for multiple services to hospitals under the inpatient and outpatient prospective payment systems, the practical reality is that these global codes function significantly differently than other bundled payments. First, the global surgical codes were established several decades ago when surgical follow-up care was far more homogenous than today.

Proposed Transformation of 10- and 90-day Global Packages into 0-day Global Packages (page 139).  We propose to make this transition for current 10-day global codes in CY 2017 and for the current 90-day global codes in CY 2018, pending the availability of data on which to base updated values for the global codes.  We believe that transforming all 10- & 90-day global codes to 0-day global codes would:

  • Increase the accuracy of PFS payment by setting payment rates for individual services based more closely upon the typical resources used in furnishing the procedures.
  • Avoid potentially duplicative or unwarranted payments when a beneficiary receives post-operative care from a different practitioner during the global period.
  • Eliminate disparities between the payment for E/M services in global periods and those furnished individually.
  • Maintain the same-day packaging of pre- and post-operative physicians’ services in the 0-day global.
  • Facilitate availability of more accurate data for new payment models and quality research.

Medicare Telehealth Services (page 186)

Several conditions must be met in order for Medicare payments to be made for telehealth services under the PFS.  Specifically, the service must be on the list of Medicare telehealth services and meet all of the following additional requirements for coverage:

  • The service must be furnished via an interactive telecommunications system.
  • The practitioner furnishing the service must meet the telehealth requirements.
  • The service must be furnished to an eligible telehealth individual.
  • The individual receiving the services must be in an eligible originating site.
  • When all of these conditions are met, Medicare pays an originating site fee to the originating site and provides separate payment to the distant site practitioner furnishing the service.

Valuing New, Revised and Potentially Misvalued Codes (page 202)

Establishing valuations for newly created and revised CPT codes is a routine part of maintaining the PFS. Since inception of the PFS, it has also been a priority to revalue services regularly to assure that the payment rates reflect the changing trends in the practice of medicine and current prices for inputs used in the PE calculations.

Accordingly, we are delaying the adoption of two new codes sets (radiation therapy and lower gastrointestinal endoscopies) until CY 2016 as requested by affected stakeholders so that those most affected by these significant changes have the opportunity to comment on our proposals for valuing these codes sets before they are implemented.

Beginning with rulemaking for CY 2017, we will propose values for the vast majority of new, revised, and potentially misvalued codes and consider public comments before establishing final values for the codes; use G-codes as necessary in order to facilitate continued payment for certain services for which we do not receive RUC recommendations in time to propose values; and adopt interim final values in the case of wholly new services for which there are no predecessor codes or values and for which we do not receive RUC recommendations in time to propose values. Highlighted procedures:

  • Hip and Knee Replacement (CPT Codes 27130, 27446 and 27447) (page 258).
  • Percutaneous Vertebroplasty and Augmentation (CPT Codes 22510, 22511, 22512, 22513, 22514 and 22515) (page 351).

Physician Payment, Efficiency, and Quality Improvements – more than 500 pages on various Physician Quality Reporting requirements (653).

For further information about a specific specialty or procedure, please call KBA at (203) 271-3366.

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