Several significant changes with the Centers for Medicare & Medicaid Services took effect in 2014 that will indpendent clinics and physician medical billing services in 2014. The recent congressional action on the budget agreement that signed into law the SGR (Medicare Sustainable Growth Rate) reform. This new law prevents a scheduled payment reduction for physicians and other practitioners who treat Medicare patients from taking effect on January 1, 2014, as was scheduled, and provides for a 0.5 percent increase for services through March 31, 2014. In addition, an updated 2014 conversion factor was released.

On November 27, 2013, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates the payment policies and payment rates for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2014.

The policy affects the calculation of payment rates. The final rule also identifies possibly misvalued codes, adds procedures, applying therapy caps, requires the compliance with state law as a condition of payment, revisions to physician value-based payment modifier, physician quality reporting system, and Medicare shared savings program among other changes.

CMS projects a steep across-the-board reduction in payment rates, based on the Sustainable Growth Rate (SGR) formula. The conversion factor would be reduced by 20.1% for services in 2014 if it goes into effect. The CY 2014 conversion factor is $27.2006, which is a smaller reduction than the 24.4 percent that was projected in March 2013. The smaller amount is due in part to a 4.72 percent adjustment to the conversion factor to offset the decrease in Medicare physician payments that would otherwise have occurred. CMS projects that total payments under the fee schedule in 2014 will be $87 billion. AMDA estimates the conversion factor to be 35.6656 which could result in a slight increase for some areas if Congress were to avert the SGR cuts.

Some of the pertinent language of the law which inmpacts physician medical billing services is included below:

“On December 26, 2013, President Obama signed into law the Pathway for SGR Reform Act of 2013. This new law prevents a scheduled payment reduction for physicians and other practitioners who treat Medicare patients from taking effect on January 1, 2014. The new law provides for a 0.5 percent update for such services through March 31, 2014…The new law extends several provisions of the Middle Class Tax Relief and Job Creation Act of 2012 (Job Creation Act) as well as provisions of the Affordable Care Act. Specifically, the following Medicare fee-for-service policies have been extended. We also have included Medicare billing and claims processing information associated with the new legislation. Please note that these provisions do not reflect all of the Medicare provisions in the new law, and more information about other provisions will be forthcoming.
Section 1101 – Medicare Physician Payment Update – As indicated above, the new law provides for a 0.5 percent update for claims with dates of service on or after January 1, 2014, through March 31, 2014. CMS is currently revising the 2014 Medicare Physician Fee Schedule (MPFS) to reflect the new law’s requirements as well as technical corrections identified since publication of the final rule in November. For your information, the 2014 conversion factor is $35.8228.
Section 1102 – Extension of Medicare Physician Work Geographic Adjustment Floor – The existing 1.0 floor on the physician work geographic practice cost index is extended through March 31, 2014. As with the physician payment update, this extension will be reflected in the revised 2014 MPFS.
Section 1103 – Extension Related to Payments for Medicare Outpatient Therapy Services – Section 1103 extends the exceptions process for outpatient therapy caps through March 31, 2014. Providers of outpatient therapy services are required to submit the KX modifier on their therapy claims, when an exception to the cap is requested for medically necessary services furnished through March 31, 2014. In addition, the new law extends the application of the cap and threshold to therapy services furnished in a hospital outpatient department (OPD)…
The therapy caps are determined for a beneficiary on a calendar year basis, so all beneficiaries began a new cap for outpatient therapy services received on January 1, 2014. For physical therapy and speech language pathology services combined, the 2014 limit for a beneficiary on incurred expenses is $1,920. There is a separate cap for occupational therapy services which is $1,920 for 2014. Deductible and coinsurance amounts applied to therapy services count toward the amount accrued before a cap is reached, and also apply for services above the cap where the KX modifier is used.
Section 1103 also extends the mandate that Medicare perform manual medical review of therapy services furnished January 1, 2014 through March 31, 2014, for which an exception was requested when the beneficiary has reached a dollar aggregate threshold amount of $3,700 for therapy services, including OPD therapy services, for a year. There are two separate $3,700 aggregate annual thresholds: (1) physical therapy and speech-language pathology services, and (2) occupational therapy services…”

If you would like more information on 2014 Medicare changes that will impact physician medical billing services visit the Medicare and Medicaid or websites.

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