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CMS Releases Final Rule for Medicare Physician Fee Schedule

The updated Medicare Physician Fee Schedule ruling will bring more focus to diabetes prevention and mental health needs.

By Vera Gruessner

Yesterday, the Centers for Medicare & Medicaid Services (CMS) released a final rule that updates a number of reimbursement policies and rates under the Medicare Physician Fee Schedule (PFS), a CMS press release states. The new payment policies will go into effect on January 1, 2017.

Medicare Physician Fee Schedule

The areas in which the new Medicare Physician Fee Schedule updates will affect the healthcare industry include treating patients with mental or behavioral health needs, multiple chronic conditions, or cognitive impairment issues. In particular, the changes to the Medicare Physician Fee Schedule include greater payment accuracy in terms of care management and primary care services.

The Physician Fee Schedule includes paying for services like doctor visits, surgeries, therapies, preventive care, and diagnostic testing. Along with the standard primary care doctor, specialists such as physical therapists, diagnosticians, physician assistants, and nurse practitioners are paid under the Medicare Physician Fee Schedule system.

The type of advances the final ruling will have include new codes for both chronic care and transitional care management in order to bolster reimbursement accuracy. Also, separate payments will be made for Current Procedural Terminology (CPT) codes.

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  • One major aspect of the final ruling on Medicare Physician Fee Schedule includes the development of the Medicare Diabetes Prevention Program expanded model. The first expansion of the Medicare Diabetes Program was first announced in early 2016, according to a CMS fact sheet.

    The program is meant to help prediabetic Medicare beneficiaries become educated on behavioral modifications that could prevent their risk of being diagnosed with Type 2 diabetes. This will be part of a preventive service that won’t include any cost sharing for the Medicare beneficiaries, the fact sheet states.

    The expanded Medicare Diabetes Prevention Program will begin on January 1, 2018 and eligible beneficiaries will be able to receive training from wellness coaches in both community centers and healthcare settings.

    The program lasts a whole year with 16 weekly hour-long training sessions that include diet tips and fitness advice. Beneficiaries currently enrolled in Medicare part B are eligible for the Diabetes Prevention Program.

    Andy Slavitt, CMS Acting Administrator, wrote for The CMS Blog how expensive it is for the Medicare program to cover the costs of diabetes patients with the spend rising to more than $42 billion in 2016.

    “In total, we estimate that Medicare will spend $42 billion more in the single year of 2016 on fee-for-service, non-dual eligible, over age 65 beneficiaries with diabetes than it would spend if those beneficiaries did not have diabetes — $20 billion more for Part A, $17 billion more for Part B, and $5 billion more for Part D,” Slavitt wrote.

    “On a per-beneficiary basis, this disparity is just as clear. In 2016 alone, Medicare will spend an estimated $1,500 more on Part D prescription drugs, $3,100 more for hospital and facility services, and $2,700 more in physician and other clinical services for those with diabetes than those without diabetes. That’s approximately $7,300 or 86 percent more per beneficiary, per year for someone with diabetes. This increased spending reflects only Medicare’s share of costs; diabetic beneficiaries likely experience higher out-of-pocket spending as well,” he stated.

    Implementing the Medicare Diabetes Prevention Program, however, saves a total of $2,650 per prediabetic patient, explained Matt Longjohn, MD, MPH, National Health Officer for YMCA of the USA, in a previous interview.

    “It turns out that YMCA’s Diabetes Prevention Program was shown to prevents new cases of diabetes 58 to 71 percent of the time in people with prediabetes,” said Longjohn.

    “The reason why Medicare is covering this is because the science is clear. It helps people with prediabetes prevent new cases of becoming diabetic. In the most recent studies we did with Medicare, we were able to show with about 8,000 Medicare beneficiaries, for a roughly $500 investment, Medicare could save $2,650 in total cost of care for those individuals within a 15-month period. That’s really the big additional driver that CMS needed to see to start writing rules and cover this program,” Longjohn concluded.


    Dig Deeper:

    How Medicare, Medicaid, and CHIP Guide the Health Payer Industry

    Medicare Diabetes Prevention Program Saves $2,650 per Patient


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