Monday, November 3, 2014

CMS Rulemaking for CY2015 Released: Outpatient and Physician Settings

On Friday evening, October 31, CMS released its final policies and spreadsheets for CY2015 for both the physician fee schedule (here) and the hospital outpatient service (here).  The full set of PFS files is here and the full set of outpatient data files is here.

The final typeset versions of the rules will appear in the Federal Register in about two weeks.

Outpatient Policy

CMS has bundled a wide range of pathology services undertaken for a patient in the outpatient setting, effective 1/1/2015.

What happened:

In 2013, CMS proposed to bundle all clinical chemistry and pathology tests to any same-day service or procedure (even an office visit).   For 1/1/2014, CMS did bundle clinical laboratory tests.

Returning to the same topic in July 2014, CMS proposed to also bundle a large range of pathology tests; and they have finalized that proposal as-is.   CMS used the rationale that it would bundle ancillary services that have a mean cost of less than $100 per service.  This captured Pathology Level I and Pathology Level II Ambulatory Payment Categories (APCs), as well as Level I Transfusion Laboratory Procedures, as discussed on page 215-216 of the Outpatient Rule and shown in their Table 12.   The impacted CPT codes are:

APC 0342, Level I Pathology (Mean Cost Payment, $56.31)
   80502, 88112, 88162, 88172, 88173, 88199, 88299, 88304, 88305, 88312, 88313, 88325
   88356, 88365, 88375, 88399, 89230, 89240, 89257, 89260, 89261, 89335, 89343, 89398.

APC 0345, Level I Transfusion Lab Procedures (Mean Cost Payment, $78.91)
   86850, 86900, 86901, 86902, 86904, 86905, 86906, 86921
   86930, 86932, 86945, 86950, 86976, 86977, 86978, 86999

APC 0433, Level II Pathology (Mean Cost Payment, $190.55)
0058T, 0357T, 80500, 86078, 86079, 86870, 86886, 88120, 88121, 88125, 88184, 88307
88323, 88331, 88346, 88347, 88355, 88360, 88361, 88367, 88368, 88374, 88377, 89049
89220, 89250, 89251, 89253, 89254, 89255, 89259, 89264, 89268, 89281, 89290, 89291
89337, 89342, 89344, 89346, 89352, 89353, 89354, 89356

($200 is not $100.  Does anyone else think that $190.55 is noticeably more than the nominal general packaging threshold of $100?)
(88342 Vanished!  Or not.   A main source for APC placements is Appendix B [ordered as a CPT list with APC placement] and Appendix C [ordered as an APC list with CPTs that fall in each APC].   88342 is missing from the APC "Appendix C."  88342 has status "E" not used, in Excel Appendix B.   Also in Excel Appendix B, the infamous 2013 G code, G0461, IHC, has status "N," not used.  CMS will probably soon fix this confusion about the annual flip-flops between 88342 versus G0461, and what APC 88342 falls in.  88342 is probably big enough that adding it back to Pathology Level II will tilt the APC price a bit.  PathologyBlawg kindly pointed out a different link, a PDF list, where 88342 is in fact placed in Pathology Level II, here.)
(Flow cytometry bundled x bundled.  Only the primary code for flow cytometry is listed here, 88184, because add-on flow tests (+88185) are now bundled to the primary code for flow - which is itself now bundled to any other event of the day, like an office visit for the blood draw on the leukemic patient.)
(Biopsies during a colonoscopy.  Example: As I understand it, the technical component for six 88305 biopsies undertaken during a colonoscopy would have paid about $50 each to the hospital last year, but will be bundled to the single hospital colonscopy fee this year.)
(Administrators Planned Ahead!  Note that in order to bundle these pathology codes for 1/2015, CMS had to discontinue the "grandfather clause" for outpatient surgical pathology, and then wait a few years for the charges and costs associated with AP services to aggregate in their hospital outpatient charge databases, so there would be data to allow the bundling.)

For those most familiar with independent lab Part B, these bundling concepts are essentially the same as bundling the technical component; the physician interpretation is still independently paid for inpatients and outpatients.

Pathology shows up in another section of the Outpatient rule; both APC 433 for Level II pathology and APC 611 for Level III pathology violate the two-times rule for homogeneity of services put together in an APC (page 313).

Finally, for completeness, recall from 2014 that human molecular tests (such as cystic fibrosis or KRAS) are not bundled, but infectious disease molecular tests are.  For example, an HIV patient in an $92 office visit at a struggling inner city hospital has his required viral titre tests "packaged" to the office visit fee; the hospital must pay for such patients' molecular virology tests out of the small facility fee for the office visit.

Postscript.  ASC versus Hospital Outpatient Facility.   Although there are several complicated ways in which overall ASC pricing policy is now tied to Hospital Outpatient pricing policy, the new AP bundling (packaging) rules apply only in the hospital outpatient setting, not in the ASC setting.  This was elucidated by PathologyBlawg after additional research (Blawg here.)

Physician Fee Schedule Policy

Misvalued Codes - Punt.  CMS proposed a list of nearly 100 potentially misvalued codes in the July proposed rule.  CMS declined to explicitly refer any of the codes to the AMA RUC for revaluation, citing criticisms of its method (final rule, page 105 ff).  For example, it was perfectly capability of identifying the ten highest paid codes of a particular specialty, but then had no way to filter for whether the identified codes were indeed "misvalued."   CMS noted also it would devote most of its revaluation resources to dissembling the long-standing 10-day and 90-day comprehensive or "global" PFS codes (page 112; page 127 ff).   Under this system, a surgeon is prepaid the value of, say, 3.5 office visits, to follow up on a surgical patient within 90 days.   CMS cited OIG reports that the AMA RUC office visits tended to be on the high side (here, among others).   However, it seems likely that once the office visits are unbundled, incentives will be reversed, and physicians would be incented to have more follow up visits than previously under the bundled policy.  Regarding misvalued cods, note that PAMA, the April 2014 Medicare law, gives CMS much more flexibility in revaluing PFS codes, a toolset it hasn't begun using yet.

Timelines for New RUC Valuations and New CPT Codes.  CMS has traditionally gotten RUC values on new PFS codes too late for inclusion in July 1 rulemaking.  CMS therefore just popped these out in the November 1 final rule and used them for pricing in the calendar year, while taking discussion on the correctness of the RVUs the next July.  CMS proposed several ways to take comment before using the new RVUs, such as, most simply, by delaying use of them for a year (page 209ff).  CMS will use a February 10 deadline for inclusion in July 1 rulemaking in the future, and AMA will endeavor to provide as many RUC values as possible by February 10.   CMS may use "G" codes to represent older displaced codes for an additional year rather than using new, replacement CPT codes that did not have valuations by February 10.   Overall, CMS will phase in the proposed changes.   CMS also stated that it hoped that the AMA RUC would provide valuations for new codes by February 10.   This seems impossible for new codes created in January (or the first week of February) from the winter AMA CPT meeting.  It seems difficult enough for those codes created at the October AMA CPT meeting.  This suggests that 1/3 of new codes, those created in January/February, will still have difficulty with valuations.

LCDs for Labs - No Change in Policy.   CMS proposed fairly substantial changes in LCD policy for labs tests beginning 1/1/2015.  Lab test LCDs would no longer be tied to CAC schedules, and could be released simultaneously in multiple MACs and rapidly harmonized.   CMS stated concisely that no changes would be implemented for 1/1/2015, but potential changes could appear in the future (p. 580 ff).

Prostate Biopsies - Lump Sum, Flat Fee.  The technical component of prostate biopsies (N>10) will be paid under G0416 only as a flat fee (p. 122 ff). Neither 88305 nor more granular G codes will be used.  CMS determined that 11-15 biopsies accounted for the vast majority of prostate samples and one comprehensive technical code was enough.  G0416-TC has 13 RVUs, 88305-TC has .94 RVUs, so the payment for 11-15 prostate biopsies is essentially linear with the TC payment for the current 88305.   The professional RVU for 88305 is .33, and for G0416, 1.95, so the professional component for 11+ prostate biopsies is about the same as about 6 units of 88305.