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Special edition: 2014 Medicare Physician Fee Schedule

Dermatology to see overall 2 percent cut in payments in 2014
The Centers for Medicare and Medicaid Services (CMS) released the 2014 Medicare Physician Fee Schedule final rule last week. Overall, services provided by the dermatology specialty will see a 2 percent reduction in Medicare payments. However, the impact of the fee schedule will vary significantly according to individual practice patterns and mix of services. In addition, the rule does not reflect the fact that Congress has not yet addressed “fixing” the sustainable growth rate (SGR) formula used to calculate physician payment rates — see related item below. To view a list of the impact the 2014 Medicare Fee Schedule will have on select dermatology codes, visit the 2014 Physician Payment page on www.aad.org. For more information, contact James Scroggs at jscroggs@aad.org.

CMS recalculation of the Medicare Economic Index impacts all specialties
Payment for services that have high practice expense components will go down and services whose values are primarily based on physician work will go up under the 2014 Medicare Physician Fee Schedule as a result of a significant change by CMS to the weighting of practice expense and physician work in the Medicare Economic Index, a fixed-weight price index that is used to update physician payments for inflation. In particular, the recalculation has significantly cut payment for the chemodenervation codes CPT 64650 by 36.96 percent and CPT 64653 by 36.98 percent. The impact of this change is across all specialties and is separate from the American Medical Association’s Relative Value Scale Update Committee’s (AMA RUC) activities. For more information, contact James Scroggs at jscroggs@aad.org.

Reimbursement rates for destruction codes reduced
Two of the destruction of premalignant lesion codes (CPT 17000 and 17004) will see reduced reimbursement rates under the 2014 Medicare Physician Fee schedule. Notably, 17000 will be cut 10.24 percent and 17004 will be cut 13.87 percent. CPT 17003 is still under review; the American Academy of Dermatology Association (AADA) will provide more information about this code as soon as it is available. These cuts were based on revised and narrowed procedure definitions which resulted in decreases in allowed procedure time. While the AADA is concerned about all reductions to these codes and the impact such reductions may have on the specialty’s ability to provide care to patients, the AADA is pleased that most of the AMA RUC’s recommended relative value units and practice expenses for the destruction of premalignant codes were adopted by CMS. Read more about the AMA RUC payment policy process with CMS. For more information, contact James Scroggs at jscroggs@aad.org.

CMS tweaks payment for Mohs micrographic surgery codes, accepts RUC recommendations
Medicare reimbursement for the Mohs micrographic surgery codes (CPT 17311, 17312, 17313, 17314, 17315) will change slightly due to highly technical changes that CMS made to the Medicare Economic Index (see related item above). The impact of this change is across all specialties and is separate from the AMA RUC’s activities. The AMA RUC, via the survey process, confirmed the existing work value of these codes. Under the 2014 Medicare Physician Fee Schedule, payment for CPT 17311 decreases by 1.7 percent, 17312 decreases by 3.7 percent, 17313 increases by 0.7 percent, 17314 decreases by 0.4 percent, and 17315 decreases by .2 percent. In its comments on the proposed rule, the AADA raised concerns that the Carrier Medical Directors identified Mohs codes as potentially misvalued. However, in the final rule, CMS agreed with the AADA and accepted the AMA RUC recommendations. For more information, contact James Scroggs at jscroggs@aad.org.

CMS to reduce payment for phototherapy codes
The 2014 Medicare Physician Fee schedule reduced reimbursement for the photochemotherapy family of codes (CPT 96910, 96912, 96913). These payment reductions of 9.3 percent, 8.78 percent, and 8.76 percent, respectively, are due to highly technical changes that CMS has made to the Medicare Economic Index. This change impacts all physicians and is separate from the AMA RUC activities (see related item above). As these three codes include significant practice expenses, the impact of these changes is substantial, however not as deep as those published in the proposed 2014 Medicare Physician Fee Schedule. In the proposed rule, CMS outlined cuts to photochemotherapy with UV-B (96910) of 48.52 percent, and photochemotherapy with UV-A (96912) of 59.82 percent as part of a plan that would equalize payments between physician offices, hospital outpatient departments, and ambulatory surgery centers for more than 200 procedures. The AADA advocated strongly in opposition of this proposal. In the 2014 Final Rule, CMS delayed finalizing the proposal, but is expected to address this issue in future rulemaking. For more information, contact James Scroggs at jscroggs@aad.org.

Dermatology-related measure added to Physician Quality Reporting System
The 2014 Medicare Physician Fee Schedule final rule includes one new dermatology measure for the Physician Quality Reporting System (PQRS) related to psoriasis, bringing the total number of dermatology measures to 5 for the 2014 reporting year. However, CMS also raised the number of PQRS measures that providers must report on to earn a 2014 incentive from 3 to 9, but lowered the reporting threshold from 80 percent to 50 percent. In order to report on nine measures for PQRS, dermatologists may apply other measures — not specific to dermatology — that are still applicable to their practices. The AADA has developed a list of other measures that dermatologists can report on through the Academy’s Physician Quality Reporting System. Click here to view the list of measures. Read more about changes to PQRS on the 2014 Physician Payment page on www.aad.org. For more information, contact Scott Weinberg at sweinberg@aad.org.

AADA advocacy: Medicare Physician Fee Schedule
In addition to strong and integrated Academy involvement in the RUC process throughout the year, the AADA has actively weighed in with CMS on important provisions of the fee schedule affecting physician payments. Read more about the AADA’s advocacy efforts on the Medicare Physician Fee Schedule on the 2014 fee schedule page on www.aad.org. Going forward, the AADA will continue to analyze the final rule for its impact on dermatology and move forward on multiple fronts to address issues. The AADA will provide further updates in the Dermatology Advocate e-newsletter and on www.aad.org. The AADA will submit its comments to CMS prior to the Jan. 27 deadline, and will be meeting with key CMS officials to discuss its concerns about the Final Fee Schedule. For more information, contact Richard Martin at rmartin@aad.org.

Take action: Urge Congress to reform the Medicare Physician Payment system before Jan. 1
In addition to changes to physician payment rates instituted by CMS through the Physician Fee Schedule, physicians are facing an additional 24 percent across-the-board Medicare rate cut on Jan. 1, 2014, due to the flawed sustainable growth rate (SGR) formula. The Conversion Factor will then be reduced from $34.0230 in 2013 to $27.2006 in 2014. The AADA is working with key legislators to repeal the flawed SGR formula and pave the way for reasonable, comprehensive payment reform that protects Medicare beneficiary access to physician services. To help with this effort, the AADA is calling on all members to log on to the AADA Dermatology Advocacy Network and submit a letter urging Congress to repeal the SGR before Jan. 1, 2014. For more information, contact Shawn Friesen at sfriesen@aad.org.

Editor's note
The next issue of Dermatology Advocate will be distributed on Dec. 13. For more up-to-date information on the Medicare Physician Fee Schedule, visit the 2014 Physician Payment page on www.aad.org.

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