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On December 1, 2016, Parker Hannifin Corporation and CLARCOR Inc. announced that the companies have entered into a definitive agreement under which Parker will acquire CLARCOR for approximately $4.3 billion in cash, including the assumption of net debt. The transaction has been unanimously approved by the board of directors of each company. Upon closing of the transaction, expected to be completed by or during the first quarter of Parker’s fiscal year 2018, CLARCOR will be combined with Parker’s Filtration Group to form a leading and diverse global filtration business. Bass, Berry & Sims has served CLARCOR as primary corporate and securities counsel for 10 years and served as lead counsel on this transaction. Read more here.

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The 2015 Medicare Physician Fee Schedule’s Expansion of Telehealth and Care Coordination Codes: CMS’ Continuing Implementation of Post-Reform Access to Care

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December 18, 2014

The Centers for Medicare & Medicaid Services ("CMS") finalized its 2015 reimbursement policies affecting physicians in releasing the 2015 Final Medicare Physician Fee Schedule on October 31, 2014 (the "Final Rule").1 Continuing with the recent theme of expanding access to care in the post-reform era, the Final Rule adds new telehealth codes and a care coordination code, as discussed in more detail below.

In addition to substantive changes to existing payment rules discussed below, CMS modified a transparency initiative that will result in revised billing codes appearing in each year's proposed rule, instead of the final rule.2 CMS indicated that it will implement a transition period next year and that full implementation of the revised transparency initiative will occur in the 2016 proposed rule, in an effort to eliminate the need for interim billing codes (also known as "G-codes").

CMS Expands Telehealth Codes to Encompass Seven New Services

Medicare currently reimburses providers for a limited number of Part B services when these services are provided through telecommunications. These services include therapy, consultations, counseling, and pharmacologic management.3 As part of its regular rulemaking process, CMS considers the addition of new telehealth codes annually based on requests submitted to CMS in the previous calendar year. Based on the requests received in 2014,4 the Final Rule's expansion of telehealth will now allow Medicare providers to be reimbursed pursuant to seven new telehealth codes, including codes for psychotherapy, psychoanalysis, annual wellness visits, and prolonged office visits.5

Services performed under the new telehealth codes, as with those performed under existing telehealth codes, must meet certain conditions in order to be reimbursed by Medicare.6  Among these conditions is a requirement that the service be furnished via an interactive telecommunications system,7 which excludes services that would typically be provided via store-and-forward or other asynchronous methodologies. In addition to meeting the telehealth-specific conditions of payment, telehealth providers must also comply with conditions generally imposed on all Medicare providers, such as compliance with the effective communication requirements for persons with disabilities.8

CMS declined to add telehealth codes for some requested services, including echocardiology, psychological testing, and dermatology codes.9 CMS argued that echocardiology codes were unnecessary because the physician interpretation of an echocardiogram does not require the patient's physical presence,10 as is the case with certain diagnostic radiology codes. Similarly, CMS declined to add new codes for psychological testing because "[such] services involve testing by computer, can be furnished remotely without the patient being present, and are payable in the same way as other physicians' services."11 For these two services, as well as certain diagnostic radiology codes and others not addressed in this alert, practitioners located away from the patient may already be reimbursed, and therefore no telehealth code is required.

CMS did not add new dermatology telehealth codes because the request to expand telehealth coverage for dermatology did not include specific codes.12 Since this decision was made based on a technicality - in order for CMS to evaluate whether services should be added to Medicare telehealth services, individual codes must be included in a request for inclusion13 - the issue may arise again in the future.

CMS continues to solicit public requests to add services to the list of Medicare telehealth services. To be considered during physician fee schedule rulemaking for CY 2016, these requests must be received by December 31, 2014.

CMS Introduces New Care Coordination Code

For years, as America's population has aged and chronic health concerns have increased, the provider community has implored CMS to create chronic care management codes, arguing that existing E/M codes do not adequately reflect the scope and intensity of the providers' resources that are required to properly care for their patients who suffer from multiple chronic conditions.

In response, in the 2014 Medicare Physician Fee Schedule Final Rule (the "2014 MPFS Rule"), CMS established separate payments and standards for non-face-to-face chronic care management services for Medicare beneficiaries who have two or more significant chronic conditions.14 Continuing the progress, the Final Rule creates a new Chronic Care Management ("CCM") code and finalizes a payment rate of $42.60, which will be billable once per month per patient. CPT code 99490 will be used instead of the G-Code that was proposed in the 2015 Medicare Physician Fee Schedule Proposed Rule (the "Proposed Rule").15

The Final Rule also revises standards imposed by the 2014 MPFS Rule. Notably, the Final Rule indicates that CCM services provided by clinical staff incident to the services of another practitioner can be furnished under general, rather than direct, supervision. Further, the clinical staff member need not be a direct employee of the practitioner or practice in order to provide the services incident to another practitioner's services.16 The 2014 MPFS had required the standards by which clinical staff members provide CCM services incident to another practitioner's services to more closely track the general incident-to rules, including that the clinical staff member had to be a direct employee of the supervising practitioner or her practice, and the supervising practitioner had to provide direct supervision. As a word of caution, CMS specifically notes this change applies only to CCM services, and not all services provided incident-to another practitioner's services.

The Final Rule also adds to the standards imposed by the 2014 MPFS Rule covering electronic care plan requirements and the utilization of electronic health record ("EHR") technology. Specifically, the Final Rule requires that CCM services must be furnished with the use of an electronic health record (or other health IT or health information exchange platform) that includes an electronic care plan that is accessible to all providers within the practice, including those who are furnishing care outside of normal business hours. The electronic care plan must also be available to be shared electronically with care team members outside of the practice. While the Final Rule does not require practitioners to use a specific electronic technology to meet the requirement for 24/7 access to the care plan or its transmission, the technology used must be some form of electronic technology other than facsimile.17

Conclusion

By creating new telehealth and care coordination codes, CMS has expanded options and opportunities for practitioners to provide care to Medicare beneficiaries. Through this expansion, CMS is acknowledging and facilitating a gradual transition to new models of care. The provider community has welcomed the addition of new codes, while continuing to press CMS to further expand access and compensate physicians for the role they play in providing access to patients and value to the Medicare program.

Primary care providers have been particularly active in these advocacy efforts, and are looking forward to operating under the expansion. "[The creation of the new CCM code] represents a unique opportunity for our members to finally get paid for services that many of them already have been providing without payment," said Kent Moore, the American Academy of Family Practice's senior strategist for physician payment. "These codes are aimed at compensating family physicians not just for what they're doing, but for the value they bring to their patients."18

Although this expansion allows room for provider growth and innovation, expect to see the provider community continue to advocate for additional telehealth codes, care coordination incentives, and an expansion of new models of care. Reform advocates are expected to push for continued expansion as CMS begins developing the 2016 Medicare Physician Fee Schedule in early 2015.


1 79 Fed. Reg. 67,547 (Nov. 13, 2014).
2 Id.
3 42 C.F.R. § 410.78(f).
4 79 Fed. Reg. at 67,599.
5 Id.
6 Id.
7 42 C.F.R. § 410.78(b).
8 79 Fed. Reg. at 67,598.
9 Id. at 67,600.
10 Id.
11 Id.
12 Id. at 67,601.
13 Id.
14 78 Fed. Reg. 74,414 74,428 (Dec. 10, 2013).
15 Id. at 67719.
16 Id. at 67720,67721.
17 Id. at 67723.
18 Bill for Chronic Care Services with Confidence; available at http://www.aafp.org/news/inside-aafp/20141212fpm-ccmcode.html


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