Diagnostic Radiology: Proposed 2016 MPFS Released

ADVOCATE Review – Diagnostic Radiology

The Centers for Medicare and Medicaid Services (CMS) recently released the calendar year (CY) 2016 Physician Fee Schedule proposed rule.  The proposed conversion factor is $36.1096, which reflects a budget neutrality adjustment of 0.9999 and the 0.5 percent update factor specified under MACRA.  Comments on the proposed rule are due Sept. 8 and a final rule is expected in early November.

The proposed rule is the first release since the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) repealed the sustainable growth rate (SGR) formula and replaced the statutory formula which had predicted negative updates for over a decade.  The MACRA will lend needed stability for radiology practices.  Although not ideal, the MACRA does allow groups to plan long term without the fear of an annual financial catastrophe caused by the threat of a 28% cut in Medicare payments.  The rule additionally proposes updates to Lung Cancer screening evaluation, Physician Quality Reporting System (PQRS), Physician Value-Based Modifier (VBM) program and potentially misvalued codes.

Lung Cancer Screening

CMS proposed to value the new G codes that will be created for the service at the same level as a non-contrast chest CT. The ACR had proposed and will continue to argue that the value should be higher due to the various registry and quality requirements within the National Coverage Determination.

Physician Quality Reporting System (PQRS)

For 2016 PQRS reporting, CMS is not proposing to make any major changes to reporting via claims or registry.  Therefore, providers reporting via claims would be required to report 9 measures (including one cross-cutting measure), covering at least 3 National Quality Strategy domains, and report each measure for 50% of their Medicare Part B Fee-for-Service patients seen during the reporting period.  Providers reporting via registry would report 1 measures group on 20 patients (more than 50% of which must be Medicare Part B patients).


In addition, 2016 will be the payment year for the 2018 PQRS payment adjustment. After 2018, the PQRS payment adjustment will transition to MIPS, as required by MACRA.

Value Based Payment Modifier (VBPM)

With the VBM program replaced by MIPS beginning in CY 2019, the proposed rule includes several key provisions to provide a smooth transition, including:

  • Using CY 2016 as a performance period for the CY 2018 VBM;
  • Applying the VBM to non-physician groups; and
  • Setting the amount of payment at risk for the CY 2018 VBM to minus 4.0 percent for groups with 10 or more eligible professionals, and to minus 2.0 percent for groups with 2-9 eligible professionals and for solo practitioners.

Potentially Misvalued Codes

The ACA required CMS to identify “misvalued codes” in the MPFS. Subsequent legislation set a 2016 target reduction of 1%. If the net reductions in misvalued codes in 2016 are not equal or greater than 1% of the estimated expenditures under the fee schedule, a reduction equal to the percentage difference between 1% and the estimated net reduction in expenditures resulting from misvalued code reductions must be made to all PFS services. In this proposed rule, CMS is proposing a methodology for the implementation of this provision. Based on that methodology, CMS has identified changes that achieve a 0.25% reduction. Further misvalued code changes may be made if the final rule is to reach the 1% target.

As always, ADVOCATE will keep you up to date on this and all issues impacting radiology as they become available.

Best regards,
Kirk Reinitz, CPA