CMS: Chronic Care Management, SGR Main Issues for Physician Pay in 2014

CMS has a released final rule for Medicare's physician fee schedule, starting Jan. 1, and physicians are expected to see a 20.1 percent reduction to their Medicare payments.

Under current law, physicians and other providers will face the pay cut based on the sustainable growth rate. The SGR is the formula used to adjust Medicare physician payment rates.

This past March, and also in the proposed rule, CMS said physician payments would have to be slashed 24.4 percent to make up for previous overrides of the SGR. The revised reduction of 20.1 percent is due to physician pay adjustments CMS calculated for this year. Members of Congress are currently working on both temporary and permanent fixes to the SGR. Every year since 2003, Congress has overridden the SGR so physicians would not have to endure sizable cuts to their Medicare pay.

The American Medical Association has made vigorous calls to repeal the SGR, describing it as a flawed formula. "The clock is ticking. At stake are innovations that would make Medicare more cost effective for current and future generations of seniors," Ardis Dee Hoven, MD, president of the AMA, said in a statement. "These innovations are not possible if physicians are worried about drastic cuts to Medicare rates that have remained almost flat since 2001, while the cost of caring for patients has gone up by 25 percent…repealing the SGR this year will give Medicare a firm and stable foundation so physicians can pursue delivery innovations that help improve care and reduce costs."

Another major provision of Medicare's 2014 physician fee schedule final rule is the emphasis on primary care services. In the proposed rule, CMS said it would create separate payments for physicians who manage and coordinate care for Medicare patients with chronic health conditions. Under the final rule, which mirrors the proposed rule, Medicare would pay primary care physicians for "non-face-to-face complex chronic care management services for Medicare beneficiaries who have multiple, significant chronic conditions," or two or more conditions. This would go into effect in 2015. CMS said it hopes this policy would improve the management and decrease the costs of chronic diseases.

"Healthcare is changing, and part of delivery system reform is recognizing this and making sure payment systems account for these changes," CMS Principal Deputy Administrator Jonathan Blum said in a news release. "We believe that successful efforts to improve chronic care management for these patients could improve the quality of care while simultaneously decreasing costs, through reductions in hospitalizations, use of post-acute care services and emergency department visits."

In addition, CMS confirmed it will expand payments for physicians who use telehealth services. Specifically, CMS will include sites designated as health professional shortage areas. CMS also finalized several changes to physician quality reporting initiatives associated with Medicare payments. For example, CMS added 57 new individual measures and two measure groups under the Physician Quality Reporting System. Now, the PQRS will have 287 individual measures and 25 measure groups in 2014.

Overall, CMS expects Medicare payments to physicians will total $87 billion in 2014. CMS will publish the rule on Dec. 10. To view the 1,369-page final rule on Medicare physician fee schedule payments for 2014, click here. To view a factsheet on the final rule, click here.

More Articles on Physician Payment and Medicare:
The Least Surprising Impact of the Affordable Care Act: Lower Pay For Physicians
AMA to Congress: Repeal Medicare SGR by End of Year
CBO: Bill Repealing Medicare SGR Would Cost $175B

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