The Calendar Year 2014 Medicare Physician Fee Schedule (“PFS”) final rule has been issued. The rule, over 1,000 pages in length, determines physician reimbursement for services provided to Medicare beneficiaries. Let’s take a look at just a few of the changes contained therein.

Payment Rates

Physicians will see a substantial decline in reimbursement – 20.1% – based on a statutory requirement which limits the amount of annual growth in physician payments. This requirement is known as the Sustainable Growth Rate (“SGR”). The President’s budget calls for averting these steep cuts, and since 2003, Congress has enacted legislation to prevent them. Congress is currently trying to create an alternative payment method which would include the permanent repeal of the SGR formula.

Primary Care and Chronic Care Management

CMS has stressed its support for advanced primary care physicians to address the needs of Medicare beneficiaries who have two or more significant chronic conditions. In 2015, Medicare will begin making separate additional payments to physicians for chronic care management services. Care management services include care plan development and implementation, patient and caregiver communication, and medication management. Medicare beneficiaries will be able to choose a physician or another eligible practitioner from a qualified practice to furnish chronic care management over 30-day periods.

Telehealth Services

Regulations describing eligible telehealth originating sites will now include health professional shortage areas (HPSAs) located in rural census tracts of urban areas as determined by the Office of Rural Health Policy. This change will result in more qualifying originating sites, which will improve access to telehealth services in shortage areas.

CMS is also developing a policy to determine geographic eligibility for originating sites on an annual basis in order to avoid mid-year changes to geographic designations, which often result in unexpected disruptions in telethealth services. In addition, CMS is updating the list of eligible Medicare telehealth services to include transitional care management services.

Application of Therapy Caps to Critical Access Hospitals

Prior to the passage of the American Taxpayers Relief Act of 2012, therapy caps were not applied to therapy services furnished in Critical Access Hospitals (“CAH”). The final rule, however, in conjunction with the American Taxpayers Relief Act, does subject CAH to therapy caps (currently set at $1,920 for 2014).

Physician Quality Reporting System (“PQRS”)

Eligible professionals will be able to submit quality measure data for the PQRS through qualified clinical data registries. These quality measures will be aligned across all reporting programs so that a physician need only report a measure once for all programs.

Most changes established by the PFS will take effect on January 1, 2014. CMS, however, will accept comments on the final rule until January 27, 2014