New physician fee schedule includes penalties on 9 quality metrics

Physicians will be paid 0.5% more next year under the physician fee schedule as part of the final rule on Medicare Part B payment policies announced Friday by the Centers for Medicare and Medicaid Services.

In addition to the physician fee schedule, payment rules for 2016 were finalized for End-Stage Renal Disease Prospective Payment System, the Hospital Outpatient Prospective Payment System, and Home Health Prospective Payment System.

"CMS is pleased to implement the first fee schedule since Congress acted to improve patient access by protecting physician payments from annual cuts,” CMS Acting Administrator Andy Slavitt said in a statement. “These rules continue to advance value-based purchasing and promote program integrity, making Medicare better for consumers, providers, and taxpayers.”

The physician fee schedule (PFS) pays for services delivered through office visits, surgical procedures, diagnostic tests, therapy services, and certain preventive services. PFS reimburses physicians and other care providers such as nurse practitioners, physician assistants, physical therapists, radiation therapy centers, and independent diagnostic testing facilities.  

CMS’s final rule also lays out guidelines for metrics that will be linked to physician reimbursement under the new Physician Quality Reporting Schedule (PQRS), which replaces the sustainable growth rate (SGR) formula repealed earlier this year. Physician groups had opposed SGR because it threatened to reduce Medicare reimbursement by 21%.

CMS said physicians in 2016 will be required to report on nine metrics covering three National Quality Strategy domains, with failure to comply resulting in a 2% reduction in payments. Among the metrics are quality-of-service measures, cost and physician malpractice rate.

The American College of Cardiology issued a statement supporting the final rule.

"Clinicians must be able to focus on delivering high-quality patient care rather than navigating burdensome administrative requirements in a new payment landscape,” said ACC President Kim Allan Williams Sr. “Through today's rule the Centers for Medicare and Medicaid Services (CMS) maintains stability by not making drastic changes to existing Medicare quality reporting programs. This stability will help clinicians become more familiar with the current program elements that will continue in 2016 and are likely to transition to the new payment system.”

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