CMS Finalizes 2016 Medicare Payment Rules

WASHINGTON D.C. (October 30, 2015)—The Centers for Medicare & Medicaid Services (CMS) issued final rules this week detailing how the agency will pay for services provided to beneficiaries in Medicare by physicians and other health care professionals in 2016 that reflects the administration’s commitment to quality, value, and patient-centered care. Payment rules for the 2016 calendar year for End-Stage Renal Disease Prospective Payment System, the Hospital Outpatient Prospective Payment System, Home Health Prospective Payment System, and the Physician Fee Schedule were all finalized this week.

“CMS is pleased to implement the first fee schedule since Congress acted to improve patient access by protecting physician payments from annual cuts. These rules continue to advance value-based purchasing and promote program integrity, making Medicare better for consumers, providers, and taxpayers,” said CMS Acting Administrator Andy Slavitt. “We received a large number of comments supporting our proposal to allow physicians to bill for advanced care planning conversations and we are finalizing this rule accordingly.”

Key policies finalized in the 2016 payment rules include:

• Finalizing the Home Health Value-Based Purchasing model. This model, authorized under the Affordable Care Act, is designed to improve health outcomes and value by tying home health payments to quality performance. All Medicare-certified home health agencies that provide services in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee will participate in this model starting January 1, 2016. Compared to the proposed rule, the maximum payment adjustment in the first year of the model was reduced from 5 percent to 3 percent. This was part of the Home Health Prospective Payment System final rule.

• Finalizing updates to the “Two-Midnight” rule. The rule clarifies when inpatient admissions are appropriate for payment under Medicare Part A. This continues CMS’ long-standing emphasis on the importance of a physician’s medical judgment in meeting the needs of Medicare beneficiaries by providing clearer guidelines and a more collaborative approach to education and enforcement. This was part of the Hospital Outpatient Prospective Payment System final rule.

• Finalizing the End-Stage Renal Disease Quality Incentive Program. The End-Stage Renal Disease final rule will apply payment incentives to dialysis facilities to improve the quality of dialysis care. Facilities that do not achieve a minimum total performance score with respect to quality measures, such as anemia management, patient experience, infections, and safety, will receive a reduction in their payment rates.

• Beginning the new physician payment system post the Sustainable Growth Rate (SGR) formula and supporting patient- and family-centered care. This is the first final Physician Fee Schedule final rule since the repeal of the SGR formula by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Through the final rule, CMS is beginning implementation of the new payment system for physicians and other practitioners, the Merit-Based Incentive Payment System, required by the legislation.

• Finalizing provision to empower patients and their families regarding advance care planning. Consistent with recommendations from a wide range of stakeholders and bipartisan members of Congress, CMS is finalizing its proposal that supports patient- and family-centered care for seniors and other Medicare beneficiaries by enabling them to discuss advance care planning with their providers.

Visit cms.gov for more information.