2016 Medicare Rule Key Provisions

On Oct. 30, 2015, CMS released CMS-1631-FC, the CY 2016 Medicare Physician Fee Schedule (PFS) Final Rule. The rule will be published in the Federal Register on Nov. 16, 2015.

AGA, ACG and ASGE have developed this summary of key provisions in the final rule to help GI practices prepare for the payment and policy changes that take effect Jan. 1, 2016.

Major Provisions in the CY 2016 Medicare Physician Fee Schedule Final Rule

Payment Policy

Quality Improvement

Payment Policy

Physician Payment Update

Last year, Congress established a 1 percent target for adjustments to misvalued codes for 2016, and required that payments under the fee schedule must be reduced by the difference between the target for the year and the estimated net reduction in expenditures. In calendar year (CY) 2016, the net reduction in expenditures resulting from adjustments to relative values of misvalued codes is 0.23 percent. As a result, the CY 2016 PFS conversion factor (CF) is $35.8279, which reflects the budget neutrality adjustment of -0.02 percent, the 0.5 percent update factor specified under the Medicare Access and CHIP Reauthorization Act (MACRA) and the -0.77 percent target recapture. The GI societies called upon CMS in their comments to exempt from the target recapture those codes receiving reductions in this final rule; however, CMS responded that its interpretation of the law is such that it cannot achieve a target recapture amount in a selective manner. 

The 2016 average impact on total allowed charges for gastroenterology is as follows:

Specialty Allowed Charges (mil) Impact of Work RVU Changes Impact of PE RVU Changes Impact of MP RVU Changes Combined Impact
Gastroenterology $1,843 -2% -1% -1% -4%

Misvalued Code Changes for Lower GI Endoscopy Services

CMS finalized cuts to the colonoscopy family of codes that are inappropriately deep and, at their highest, slash payment for some colonoscopy procedures by more than 17 percent. The cuts proposed in July were as high as 20 percent, and AGA, ACG and ASGE and thousands of our member gastroenterologists advocated strongly against these cuts. The cuts in the final rule were not based on the data submitted; ultimately, our recommendations were disregarded. We intend to shine a light on this fact to Congress and the public.

CMS said it reconsidered the differences between the RUC-recommended value for colonoscopy and its proposed relative value units (RVUs) and agreed with the stakeholders that urged CMS to accept the AMA/Specialty Society Relative-Value Update Committee (RUC) recommended values. The RUC recommended value for colonoscopy code was also flawed, setting the value of colonoscopy equal to that of bronchoscopy and hysteroscopy procedures instead of relying on robust survey data from hundreds of physicians. 

CMS rejected our request to delay finalizing values for the lower GI codes until codes that are used to report moderate sedation are separately valued and CMS determines a methodology for removing the value of moderate sedation from the endoscopy codes and all others that include moderate sedation. Instead, CMS will review and consider recommendations from the medical community about the work RVUs associated with moderate sedation and will address the valuation of moderation sedation separately.

Our societies are also disappointed and deeply concerned that the physician work values finalized by the agency for ileoscopy, pouchoscopy, colonoscopy through stoma and flexible sigmoidoscopy are not data-driven and that the methodology used to determine physician work and intensity for these services is severely flawed. 

Phase-In of Significant RVU Reductions

By statute, if total RVUs for a service, except for new or revised codes, are decreased by an estimated 20 percent or more, the adjustments shall be phased-in over a two-year period. CMS is finalizing the proposal to phase in these reductions by reducing the value for a service by 19 percent, the maximum allowed amount, in the first year, and to phase in of the percent remainder of the reduction in the second year. CMS believes that this approach avoids differential treatment among related codes that would occur due to the 20 percent phase-in cutoff. Because CMS finalized that it will not apply the phase-in to codes that are part of a code family with significant coding revisions, none of the following lower GI endoscopy codes that experienced cuts of 20 percent or greater are eligible for the phase in. The GI societies opposed this proposal in their comments to CMS. 

CPT Mod Short Descriptor 2015 Facility Total RVU 2016 Final Facility Total RVU 2015 Facility Payment (CF $35.7547) 2016 Final Facility Payment (CF $35.8279) Final % Change 2015 to 2016
44385   Endoscopy of bowel pouch 3.10 2.24 $110.84 $80.25 -27.6%
45340   Sig w/ balloon dilation 3.33 2.44 $119.06 $87.42 -26.6%
44386   Endoscopy bowel pouch/ biopsy 3.66 2.77 $130.86 $99.24 -24.2%
45342   Sigmoidoscopy w/us guide bx 6.77 5.15 $242.06 $184.51 -23.8%
45334   Sigmoidoscopy for bleeding 4.68 3.61 $167.33 $129.34 -22.7%
45335   Sigmoidoscopy w/submuc inj 2.65 2.10 $94.75 $75.24 -20.6%
91200 TC Liver elastography 0.60 0.43 $21.45 $15.41 -28.2
91200   Liver elastography 1.01 0.80 $36.11 $28.66 -20.6

Valuing Services That Include Moderate Sedation as an Inherent Part of Furnishing the Procedure

The CPT manual includes more than 400 diagnostic and therapeutic procedures, listed in Appendix G, for which the CPT Editorial Committee has determined that moderate sedation is an inherent part of furnishing the procedure. For these diagnostic and therapeutic procedures, only the procedure code is reported by the practitioner who conducts the procedure, without separate billing by the same practitioner for moderate sedation services, and, in developing RVUs for these services, includes the resource costs associated with moderate sedation in the valuation. In the CY 2015 PFS proposed rule, CMS noted that practice patterns for endoscopic procedures were changing, with anesthesia increasingly being separately reported for these procedures. Due to the changing nature of medical practice, CMS indicated that it was considering establishing a uniform approach to valuation for all Appendix G services. The GI societies submitted comments to CMS on this issue along with many other stakeholders. 

In the 2016 PFS final rule, CMS indicated that it will value moderate sedation service through future notice and comment rulemaking. CMS will consider input from the medical community on this issue through evaluation of CPT coding changes and associated RUC recommendations, as well as feedback received through public comments.

Potentially Misvalued Services Under the Physician Fee Schedule

CMS finalized 103 codes as potentially misvalued under the High Expenditure by Specialty Screen, including CPT code 91110([Gastrointestinal tract imaging, intraluminal (e.g., capsule endoscopy), esophagus through ileum, with interpretation and report], and is seeking recommended values for these codes from the RUC and other interested stakeholders. The GI societies are surveying code 91110 and related code 91111 [Gastrointestinal tract imaging, intraluminal (e.g., capsule endoscopy), esophagus with interpretation and report], and will present recommendations to the RUC in January 2016. It is expected that the proposed value for 91110 and 91111 will be released in the summer of 2016 when CMS issues the 2017 PFS proposed rule. 

Incomplete Colonoscopy Clarification

CMS finalized its proposal to establish new values for incomplete colonoscopies reported with the 53 modifier at one-half the value of the inputs for the corresponding codes reported without the 53 modifier, in response to the new definition of an incomplete colonoscopy that now also includes colonoscopies in which the colonoscope is advanced past the splenic flexure, but not to the cecum. At present, CMS crosswalks the RVUs for the incomplete colonoscopy from the values of the corresponding sigmoidoscopy. Given that the new CPT instructions will reduce the number of reported complete colonoscopies and increase the number of colonoscopies that proceeded further toward completion reported with the -53 modifier, CMS believes CPT code 45378 reported with the -53 modifier will now describe a more resource-intensive group of services than were previously reported. CMS will consider whether further changes to valuation or the coding structure are necessary in future rulemaking.

Technical Correction: Waiver of Deductible for Anesthesia Services Furnished on the Same Date as a Planned Screening Colorectal Cancer Test

In the 2016 PFS final rule, CMS is making changes to ensure that both surgical or anesthesia services furnished in connection with, as a result of and in the same clinical encounter as a colorectal cancer screening test will be exempt from the deductible requirement when furnished on the same date as a planned colorectal cancer screening test. CMS will amend regulation to add “and beginning January 1, 2015, for an anesthesia service,” following the first use of the phrase “a surgical service” and to add “or anesthesia” following the word “surgical” each time it is used in the second sentence of §410.160(b)(8).

Refinement Panel

After receiving numerous appeals, including from the GI societies, to maintain the refinement panel process as an additional avenue of reconsideration of the agency’s RVU decisions, CMS decided not to eliminate the refinement panel process at this time. Instead, CMS will retain the ability to convene refinement panels for codes with interim final values under circumstances in which additional input provided by the panel is likely to add value as a supplement to notice and comment rulemaking. CMS will make the determination of whether to convene a refinement panel on an annual basis, based on review of comments received on interim final values. CY 2016 is the final year for which CMS anticipates establishing interim final values for existing services.

Incident-To Proposals: Billing Physicians as the Supervising Physician

In general, incident-to services must be furnished under the direct supervision of a practitioner and current regulations state that “[t]he [practitioner] supervising the auxiliary personnel need not be the same [practitioner] upon whose professional service the incident to service is based.” Thus, existing CMS policy provides for a simplified billing process that recognizes the valuable role of non-physician personnel in providing care as part of services billed by the practitioner who generally oversees the patient.  

In the proposed rule, CMS indicated that this language could be interpreted as permitting a practitioner to bill for incident-to services or supplies that the billing practitioner did not directly supervise. However, in the final rule, CMS clarified that its proposal to amend the current incident to regulations to state explicitly that only the physician or other practitioner who directly supervises the auxiliary personnel who provide the incident to services may bill Medicare for the incident to services was not intended to require that the supervising physician or other practitioner must be the same individual as the physician or other practitioner who orders or refers the beneficiary for the services or who initiates treatment. Rather, CMS intended to clarify that under circumstances in which the supervising practitioner is not the same as the referring, ordering or treating practitioner, only the supervising practitioner may bill Medicare for the incident-to service

Appropriate Use Criteria for Advanced Imaging Services

There are many clinical situations in which gastroenterologists order advanced diagnostic imaging services and, therefore, will need to comply with the requirements of the Medicare Appropriate Use Criteria (AUC) Program or risk disruption of current referral patterns. 

Because CMS is unable to meet its statutory deadlines for specifying clinical decision support mechanisms by which ordering professionals will be required to consult AUC, CMS will not require ordering professionals to fulfill the AUC consultation requirements by the Jan. 1, 2017, date set in law. Instead, CMS will adopt policies regarding claims-based reporting requirements in the CY 2017 and CY 2018 rulemaking cycles. Additionally, CMS is modifying the proposed definition of provider-led entity (PLE) to finalize a definition that focuses on the practitioners and providers that comprise an organization. The definition includes national professional medical specialty societies whose members are actively engaged in delivering care in the community. The definition of a PLE is important, because AUC are defined as criteria only developed or endorsed by national professional medical specialty societies or other PLEs. 

Payment for Biosimilar Biological Products Under Section 1847A

The proposed fee schedule rule for CY 2016 stated that CMS planned to use a single average sales price (ASP) calculation for all biosimilar products grouped within a specific HCPCS code. This policy, which is used for other common multiple source drugs, has potential consequences for the biosimilar market that are not present in traditional generic drugs. After taking the many comments received into consideration, CMS finalized its proposal to amend the regulation to make clear that the payment amount for a biosimilar biological product is based on the ASP of all National Drug Codes (DNCs) assigned to the biosimilar biological products included within the same billing and payment code. CMS also finalized the effective date as Jan. 1, 2016.

Private Contracting/Opt-Out

Prior to MACRA, physicians and practitioners who wished to renew their opt-out were required to file new valid affidavits with their Medicare Administrative Contractors (MACs) every two years. Section 106(a) of MACRA indicates that valid opt-out affidavits filed on or after June 16, 2015, automatically renew every two years. Therefore, physicians and practitioners who filed valid opt-out affidavits on or after June 16, 2015, are not required to file renewal affidavits. If physicians and practitioners who filed affidavits effective on or after June 16, 2015, do not want their opt-out to automatically renew at the end of a two-year opt-out period, they may cancel the renewal by notifying all MACs with which they filed an affidavit in writing at least 30 days prior to the start of the new two-year opt-out period.

CMS finalized the provisions in the final rule effective Jan. 1, 2016, except for the definition of "ownership or investment interest," which has an effective date of Jan. 1, 2017. 

Quality Improvement

Physician Quality Reporting System

For 2016 PQRS reporting, CMS is not making any major changes to reporting via claims or registry. Therefore, providers reporting via claims will be required to report nine measures, covering at least three National Quality Strategy domains, and report each measure for 50 percent of their Medicare Part B Fee-for-Service patients seen during the reporting period. Providers reporting via registry will report on measures groups on 20 patients (more than 50 percent of which must be Medicare Part B patients).  

CMS finalized requirements for the 2018 PQRS payment adjustment consistent with the requirements for the 2017 PQRS payment adjustment. CMS established the same criteria for satisfactory reporting as for the 2017 PQRS payment adjustment, which generally require the reporting of nine measures covering three National Quality Strategy domains. If an individual eligible provider or group practice does not satisfactorily report or satisfactorily participate in PQRS for 2016, a 2 percent negative payment adjustment will apply to covered professional services furnished by that individual eligible provider or group practice during 2018.

CMS made changes to the PQRS measure set to add measures where gaps exist and eliminate measures that are topped out (i.e., high levels of performance with little variation and, therefore, little room for further improvement), duplicative or are being replaced with a more robust measure. There will be 281 measures in the PQRS measure set and 18 measures in the Group Practice Reporting Option (GPRO) Web Interface for 2016. Also, as recently authorized under MACRA, CMS is adding a reporting option that will allow group practices to report quality measure data using a Qualified Clinical Data Registry (QCDR).

Please note that the 2018 PQRS payment adjustment is the last adjustment that will be issued under PQRS. Starting in 2019, adjustments to payment for quality reporting and other factors will be made under the Merit-Based Incentive Payment System (MIPS), as required by MACRA. CMS sought comment related to other MACRA provisions in the CY 2016 PFS proposed rule and in a previously published Request for Information.

CMS is finalizing the following GI measures for age appropriate screening colonoscopy and photodocumentation of cecal intubation.

Excerpts from Table 30: New Individual Quality Measures and Those Included in Measure Groups

NA/439 NA/425
CMS E-Measure ID
NQS Domain
Efficiency and cost reduction Effective clinical care
Measure Title and Description (Includes Numerator, Denominator, Exclusion Criteria, and Exceptions Information)
Age Appropriate Screening Colonoscopy: The percentage of patient greater than 85 years of age who recieved a screening colonscopy from Jan. 1 to Dec. 31. Photodocumentation of Cecal Intubation: The rate of screening and surveillance colonoscopies which photodocumentation of landmarks of cecal intubation is performed to establish a complete examination.
2015 MAP Recommendations and NPRM Rationale

Encourage Continued Development

Although this measure is not NQF-endorsed, we are exercising our exception authority under section (1848(f)(2)(C)(ii) of the Acto to propose this measure because a feasible and practical measure has not been endorsed by the NQF that has been submitted to the measures application partnership. This measure fills a clinical concept gap in the PQRS, as it addresses the overuse of colonoscopy which further addresses efficiency and cost aspects of health care.

Encourage Continued Development

Although this measure is not NQF-endorsed, we are exercising our exception authority under section 1848(k)(2)(C)(ii) of the Act to propose this measure because a feasible and practical measure has not been endorsed by the NQF that has been submitted to the measures application partnership. This measure fills a clinical gap in the program, as photodocumentation of cecal intubation allows a complete assessment of the cecum area that can aid in the prevention of colon cancer. Additionally, this measure would be applicable for gastroenterology specialists to report.

Measure Steward
Certified Survey Vendor (CSV)
Electronic Health
GPRO Web Interface
Measure Groups

At this time, CMS is not finalizing the Frequency of Inadequate Bowel Preparation measure for reporting in 2016 PQRS.

Physician Compare

The 2016 PFS final rule continues the phased approach to public reporting on Physician Compare. CMS will continue to make all 2016 individual eligible professionals and group practice PQRS measures available for public reporting. All Consumer Assessment of Healthcare Providers and Systems (CAHPS) for PQRS measures for groups of two or more eligible professionals who meet the specified sample size requirements and collect data via a CMS-specified certified CAHPS vendor are available for public reporting. In addition, all Accountable Care Organization (ACO) measures, including CAHPS for ACOs, are available for public reporting. CMS is also finalizing the following proposals:

  • Include certifying board, and specifically add American Board of Optometry  Board Certification and American Osteopathic Association  Board Certification.
  • Include an indicator on profile pages for individual eligible professionals  who satisfactorily report the new PQRS Cardiovascular Prevention measures group in support of the Million Hearts initiative.
  • Continue making individual-level QCDR measures available for public reporting, and, new to 2016, to publicly report group-level QCDR measures.
  • Publicly report an item (or measure)-level benchmark derived using the Achievable Benchmark of Care (ABC™) methodology (more on this item below).
  • Include in the downloadable database the value modifier tiers for cost and quality, noting if the group practice or eligible professional is high, low or neutral on cost and quality; a notation of the payment adjustment received based on the cost and quality tiers; and an indication if the individual eligible professional or group practice was eligible to, but did not, report quality measures to CMS.
  • Publicly report in the downloadable database utilization data for individual eligible professionals.

CMS is not finalizing the proposal to include a visual indicator on profile pages for group practices and individual EPs who receive an upward adjustment for the value modifier.

Consistent with existing policies, all data must meet the public reporting standards — measures must be statistically accurate, valid, reliable and comparable, and must resonate with consumers. For individual and group-level measures, CMS will publicly report all measures submitted, reviewed, and deemed valid and reliable in the Physician Compare downloadable file. However, not all measures will be included on the Physician Compare profile pages.

Physician Compare Benchmark

CMS is finalizing its proposal to publicly report an item-level benchmark for group practice and individual eligible professional PQRS measures using the ABC methodology. The benchmark will be stratified by reporting mechanism to ensure comparability and reduce the interpretation burden for consumers.

Benchmarks are important to ensuring that the quality data published on Physician Compare are accurately understood. A benchmark allows consumers to more easily evaluate the published information by providing a point of comparison between groups and between individuals. On Physician Compare, the benchmark will be displayed as a five-star rating. CMS will conduct analysis and stakeholder outreach around the star attribution methodology prior to public reporting in 2017.

Medicare EHR Incentive Program

CMS is revising the definition of certified EHR technology in accordance with criterion finalized by the Office of the National Coordinator for Health Information Technology and CMS’ form and manner requirements for electronic submission of clinical quality measures (CQMs).

Physician Value-Based Payment Modifier

The Value-Based Payment Modifier (VM) provides for differential payments under the PFS to physicians, groups of physicians and other eligible professionals based on the quality and cost of care they furnish to beneficiaries enrolled in the traditional Medicare fee-for-service (FFS) program.

Under the VM, performance on quality and cost measures can translate into increased payment for physicians and other eligible professionals who provide high quality, efficient care and decreased payment for low-performing physicians and other eligible professionals who underperform. The VM will expire at the end of CY 2018, as a new comprehensive program, required by MACRA, called the MIPS, begins in CY 2019. The final policies established in this rule are intended to help provide a smooth transition from the VM. Application of the VM will continue to be tied to participation in PQRS and CY 2016 will serve as the performance period for the CY 2018 VM.

CMS has finalized the following key program policies:

  • The VM will apply to non-physician eligible professionals who are physician assistants (PAs), nurse practitioners (NPs), clinical nurse specialists (CNSs) and certified registered nurse anesthetists (CRNAs) (and not to other non-physician eligible professional types) in groups and to PAs, NPs, CNSs and CRNAs who are solo practitioners, in the CY 2018 payment adjustment period.
  • CMS will continue its quality-tiering methodology for all groups and solo practitioners who meet the criteria to avoid the downward adjustment under the PQRS (i.e., Category 1). Groups of all sizes and solo practitioners would be subject to upward, neutral or downward adjustments derived under the quality-tiering methodology. Groups that consist solely of non-physician eligible professionals and solo practitioners who are PAs, NPs, CNSs and CRNAs will be held harmless from downward adjustments under the quality-tiering methodology in CY 2018.
  • Category 1 will consist of groups that meet criteria to avoid the PQRS penalty for CY 2018 as group practice participation in the PQRS GPRO, as well as groups that have at least 50 percent of their eligible professionals meet the criteria to avoid the PQRS penalty as individuals. Importantly, CMS will consider whether the 50 percent threshold has been met regardless of whether the group registers for a PQRS GPRO. Therefore, if a group registers for the GPRO, but fails to meet PQRS criteria as a group, there is another opportunity for quality data reported by individuals eligible professionals to be taken into account for purposes of applying the VM. 

CY 2018 VM for Physicians, PAs, NPs, CNSs and CRNAs, in Groups of Physicians with 10 or More Eligible Professionals

Cost/Quality Low Quality Average Quality High Quality
Low Cost +0.0% +2.0x* +4.0x*
Average Cost -2% +0% +2.0*
High Cost -4% -2% +0%

* Groups eligible for an additional +1.0x if reporting PQRS quality measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores. x represents the upward payment adjustment factor. 

CY 2018 VM for Physicians, PAs, NPs, CNSs and CRNAs, in Groups of Physicians with 2-9 EPs and Physician Solo Practitioners

Cost/Quality Low Quality Average Quality High Quality
Low Cost +0% +1.0x* +2.0x*
Average Cost -1% +0% +1.0x*
High Cost -2% -1% +0%

*    Groups eligible for an additional +1.0x if reporting PQRS quality measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores. x represents the upward payment adjustment factor. 

  • For CY 2018, CMS will apply a negative -4 percent VM to physicians, PAs, NPs, NCSs and CRNAs in groups with 10 or more eligible professionals who do not successfully submit quality data under PQRS and, therefore, fall in Category 2. The negative adjustment is -2 percent for groups with two to nine eligible professionals and physician solo practitioners. 
  • In CY2018, all PAs, NPs, CNSs and CRNAs who bill under a group’s TIN will be subject to the same VM adjustment that will apply to the physicians who bill under that TIN.
  • CMS will waive application of the VM for groups and solo practitioners, as identified by their Taxpayer Identification Number (TIN), if at least one eligible professional who billed for PFS items and services under the TIN during the applicable performance period for the value modifier participated in the Pioneer ACO Model, Comprehensive Primary Care Initiative (CPCI), or other similar Innovation Center model beginning with the CY 2017 payment adjustment period.
  • Beginning with the CY 2017 payment adjustment period, CMS will increase the minimum episode size for the Medicare Spending per Beneficiary measure used to calculate the VM cost component from 20 to 125 episodes for all groups and solo practitioners. Also, for the CY 2017 payment adjustment, CMS will not use the All-Cause Hospital Readmissions measure when calculating the VM quality component for solo practitioners and groups with two to nine eligible professionals.

More Information

Additional information on the final rule will be posted on our websites. In the meantime, questions should be directed to:

  • Joshua Keepes, director of regulatory affairs, AGA, at 240-482-3223 or jkeepes@gastro.org.
  • Brad Conway, vice president of public policy, ACG, at 301-263-9000 or bconway@gi.org.
  • Lakitia Mayo, director of health policy and quality,  ASGE,   at 630-570-5641 or lmayo@asge.org .

Created Nov. 10, 2015