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Medicare Proposes 2015 Payment Rates for Physicians

July 28, 2014

The Centers for Medicare & Medicaid Services (CMS) has issued proposed rules that would update payment rates and policies for Medicare physician and hospital outpatient services for calendar year 2015.  Comments are due by September 2, and the final rule will be released sometime in November.

Overall, Medicare is proposing to increase the payment rates for hospital outpatient services by 2.1% and for ambulatory surgical centers (ASC) by 1.2%. Rates for physician services would be cut deeply under Medicare’s existing payment formula, but Congress will again most likely enact legislation to ensure that the large overall reductions will not go into effect. However, payment for individual Physician Fee Schedule (PFS) services may go up or down depending on the service involved.

Major highlights from the proposals include the following:

  • Value based purchasing for physician services: In 2015, CMS will for the first time adjust payments to larger physician practices on the basis of how well they performed on quality metrics in 2013. Such quality-performance adjustments will apply to smaller practices in future years. Also in 2015, CMS will impose a downward payment adjustment for practices that do not adequately report their performance under the Physician Quality Reporting System (PSRS). Also, CMS is proposing to add 28 new individual quality and cost measures under PQRS, and to remove 73 existing measures.

  • Quality reporting for hospital outpatient departments and ASCs: CMS is proposing to adjust some quality measures in both the hospital outpatient and ASC quality reporting programs, and to make them more consistent between the two sites of care.

  • Codes: CMS proposes to correct 80 payment codes that CMS believes are potentially misvalued.

  • Payment Packaging: CMS continues  its effort to package payment for ancillary services (such as diagnostic tests) into a single payment that covers the primary service and the ancillary services.   CMS also proposes to group more services into a single ambulatory payment classification (APC) by creating what are known as Comprehensive APCs.    For 2015 hospital outpatient payment, it is proposing to add 28 Comprehensive APCs, many of which are high-cost device-dependent services.

  • Shared Savings ACOs: CMS is proposing to change or adjust about one third of the quality measures used for judging performance of ACOs participating in the Medicare Shared Savings program.  It is also proposing to adjust its quality scoring strategy by rewarding year-to-year quality improvement for such ACOS.

Fact sheets on both proposals are available at the CMS website:

Proposed Physician Fee Schedule for Calendar Year 2015

Proposed Payment and Payment Changes Hospital Outpatient Departments 2015

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