By Betsy Priest, Coding Manager


Two new codes are available to help capture a patient’s advanced care planning.  These can be used in any setting, regardless of the specialty.

99497: Advance care planning including the explanation and discussion of advance directives such as standard forms (with completion of such forms, when performed), by the physician or other qualified health care professional; first 30 minutes, face-to-face with the patient, family member(s), and/or surrogate.

99498: Advance care planning including the explanation and discussion of advance directives such as standard forms (with completion of such forms, when performed), by the physician or other qualified health care professional; each additional 30 minutes (List separately in addition to code for primary procedure)

These codes will be used to capture the time you spend in addition to what is already being done with the patient.  If you have a regular visit with the patient, code that visit with a modifier 25 and then the above codes. If you are only seeing the patient for Advanced Care Planning, you would only use these codes.

These are time based codes.  99497 is for the first 30 minutes of Face to Face time with the patient and the 99498 is for each additional 30 minutes. This is only face to face time with the patient.

The documentation needs to clearly state the total time, that it was face to face, and what was discussed.  (The providers do not need to re-write parts of their note if this information is elsewhere. We need to be able to clearly see what was discussed and that it was advanced care planning).

Reimbursement amounts have not been determined yet. CMS states that in 2016, they will reimburse these services, but no payment amount has been established. This was open for discussion through December 31, 2015 and no final decision regarding the reimbursement amount has been published as of yet.

These services can be performed by physicians as well as mid-levels

If you would like more information about how we can tailor our services to meet your needs, please contact Betsy Priest, Coding Manager at 716.348.3904 or


By Becky Amann, Compliance Manager

Practicefirst sent out an Urgent Notice to our clients on April 17th    regarding the New York State Surprise Bill Law. The following is a recap of that notification:


New legislation has been passed by New York State, commonly known as the Emergency Services and Surprise Bill Law.  This new law went into effect on March 31, 2015.

Under the terms of this new law, patients can dispute out-of-network (OON) charges if they did not have, or were not given, the opportunity to avoid OON charges. The law applies to physicians, hospitals, insurance carriers and other facilities.

Below is a brief summary of the new law and how it may affect your practice.

Health Care Professional and Physician Disclosure Requirements:

When scheduling appointments, the following information is required to be disclosed to patients or prospective patients:

  • The names of health insurance plans with which you participate and the names of hospitals with which you are affiliated.
    • These can be provided in writing or through a website before a patient receives non-emergency services and verbally when the appointment is scheduled.
  • Notify patients that the estimated charge for a non-emergency service is available upon request if the physician does not participate with the patient’s health plan (must include disclaimer that actual charges could be higher due to unforeseen medical circumstances).

When referring or coordinating care with another provider, all health care professionals must:

  • Referrals (Coordinating Care): Disclose to patients and prospective patients the names and contact information of the providers for whom they are referring the patient to.
  • Concerning scheduled hospital admissions or scheduled outpatient hospital services:  Disclose to patients and the hospital, the names and contact information of physicians who are scheduled to treat a patient for non-emergency services during a scheduled hospital admission or outpatient hospital services.

Under this new law, patients have been given the right to dispute a “surprise” bill when it has been processed out-of-network. The patient disputes the bill by completing a Surprise Medical Bill Assignment of Benefits Form.  A copy of this form is attached. If the patient completes and forwards the Assignment of Benefits form to a provider, they cannot hold the patient responsible for the surprise bill in excess of the their  in-network copay, co-insurance or deductible. The patient’s health plan is required to pay you the billed amount or attempt to negotiate reimbursement with you. If negotiations between the health plan and you fail, either party can submit a dispute to an Independent Dispute Resolution (IDR) entity.

Per the Department of Financial Service’s website, some examples of a surprise bill are:

  • Services rendered by a non-participating physician at a participating hospital or ambulatory surgical center when: a participating physician was unavailable, or a non-participating physician renders services without the patient’s knowledge, or unforeseen medical services arise at the time the health care services are rendered.
  • Services referred by a participating physician to a non-participating provider without the explicit written consent of the patient acknowledging that the services would be out-of-network and result in cost not covered by the patient’s health plan.
  • Consultation services provided by a specialist who does not participate with the insured’s health plan when the following occurs:
    • a patient is admitted to a participating hospital following emergency services
    • a patient is admitted to a participating hospital for a scheduled hospital admission

AND a participating physician is unavailable or a non-participating physician renders services without the insured’s knowledge or unforeseen medical services arise at the time the health care services are rendered.

Conversely, some examples of bills that are not surprise bills include, but are not limited to:

  • An insured’s contract does not require the insured to obtain a referral before obtaining services. A participating physician provides the insured with a list of local laboratories and recommends that the insured make an appointment to have blood work done.
  • An insured requests a referral or authorization to a non-participating provider, the referral or authorization is denied by the health plan, and the insured subsequently obtains the services of the non-participating provider.

Emergency Services

  • The Affordable Care Act requires a health plan to reimburse out-of-network emergency services based on certain criteria.
  • A non-participating physician may dispute the amount that the health plan pays you for emergency services through the Independent Dispute Resolution (IDR) process.
  • The dispute resolution process does not apply to health care services, including emergency services, when physician fees are subject to Worker’s Comp, No Fault, Medicare fee schedules or Medicaid fee-for-service.
  • This new regulation requires insurance carriers to hold harmless the insured for charges in excess of the in-network deductible, co-payments or co-insurance for out-of-network emergency services.

Further information about this new law can be found on the New York State Department of Financial Service’s website at Please refer to the Out-of-Network Law Guidance.

This is a complex law, interpreting how this law affects your practice can be tricky.  We do not provide legal advice, but will attempt to answer any questions you m


By Emilie J DiChristina, MBA for Practicefirst

In every practice, regardless of size, operational costs are increasing, capital expenditures (such as those for an EMR) are increasing, human resource costs are increasing, supply costs are increasing, utility costs are increasing, and the providers do not have the time to look for the best deals or negotiate with payers to offset these costs.

What to do? What to do?

One of the ways medical providers (including hospitals and physicians), and many other organizations such as schools, small businesses and not-for-profits are dealing with these challenges are through the development of a MSO – Management Services Organization.

While MSOs are often hospital driven, locally we are seeing a push  to develop MSO which bring together similar specialties, or specialties which will be supportive through a referral base and/or one-stop-shop model. The providers who join the MSO have some degree of financial buy-in either as part of the overall MSO umbrella, or through the purchasing of certain “menu” items such as billing, human resources, payroll, IT, purchasing, etc.

While very large practice may have their own Practice Administrator, their own in-house IT support, compliance personnel, Meaningful Use specialists and HR generalists, most practices do not have the size and scope to offer all those services internally, leaving practices at real risk, Likewise, even the largest practice does not have to bargaining power to achieve hospital sized discounts when purchasing, or negotiate higher rates from third-party payers.

Physician practices are suffering from rising costs and decreasing revenues, and individual practitioners are suffering from a decreased quality of life, particularly if they are trying to be the provider and “chief cook and bottle washer” for the practice.  Increased numbers of physicians are seeking out alliances in droves, looking for help and benefit without giving up their autonomy to practice as they see fit.

So whether seeking to work with other providers of the same specialty, or with a wider range of provider types, the goal is to become more collaborative and more integrated while avoiding any potential regulatory risks (price fixing, anti-trust, inurement, fraud and abuse) and the MSO is generally thought to be the most flexible option. MSOs bring together providers into beneficial alliances without requiring the provider to give up their autonomy.

The way a MSO is set-up (simply described) is to have a management team and an executive director run a business if which the customers (providers buying into the MSO) help define the services which will be provided, the most cost effective way to provide those services, and then to collect fees for those services from the client providers and insure that the services meet the needs of the clients.

For example the MSO usually offers a purchasing department. For a fee, providers who wish to use this centralized purchasing department will receive greater purchasing power when buying the everyday practice items including paper and pens, exam table paper, otoscope tips, and will also have greater power in negotiating for the high ticket items such as capital equipment. The goal is to standardize where possible, negotiate with the greater volume and decrease cost to the client practices.

The whole purpose of an MSO is to offer a specific menu of services made available to practices and structured in a cooperative fashion.  What we are seeing in WNY are MSOs which involve physician equity positions with a stated goal of assistance and guidance without interference.  The physicians are involved in an advisory policy-making capacity, to prioritize efforts and to pick services which will have universal appeal, are apolitical, and offer immediate payback.

The menu of services of an MSO frequently include overall management and consultative practice services, billing and collection, purchasing, equipment and personnel pooling, risk management and human resources/r


By Sarah Howarth, Billing Manager


On May 1 2014, Independent Health began issuing new ID cards with new ID numbers to members.  Please ask Independent Health patients for a copy of their new ID card, update your systems with their new ID number and notify Practicefirst of the change.


National Government Services will be conducting service-specific prepayment reviews targeting E&M services.  The primary focus of the reviews will be to identify common errors, develop educational efforts and prevent improper payments.  These prepayment audits will review documentation to determine if it supports the service billed.  If you receive correspondence from National Government Services requesting documentation, please notify Practicefirst immediately.

The Centers for Medicare & Medicaid Services (CMS) has identified issues relating to the processing of claims for new patient visits billed by the same physician or physician group within the past three years.  CMS has determined that the edits implemented in October 2013, generated incorrect overpayments and denials for some claims.  CMS will be issuing refunds on any offset or recouped payments and interest in the next 90 days.


Effective June 16, 2014, Univera Healthcare, Univera Community Health, Excellus and Monroe Plan will require a taxonomy code on all claim submissions.  Claims submitted without taxonomy will be returned.  Practicefirst has implemented the necessary changes to include taxonomy codes on claim submission.


We are nearing the halfway mark of the 2014 PQRS reporting period.  To avoid the 2016 payment adjustment, individual providers must report a minimum of 3 measures for at least 50% of eligible Medicare fee for service patients throughout the reporting period.  Providers interested in obtaining the 2014 PQRS payment incentive must report on 9 measures for at least 50% of Medicare fee for service patients throughout the reporting period. The reporting period begins January 1st and ends December 31, 2014.  Providers interested in avoiding the payment adjustment and/or obtaining the payment incentive, must begin reporting immediately.

Additional assistance in determining appropriate measures and claims reporting is available.  Please contact Practicefirst for more information.


Silent PPO is the term used to describe when a non-contracted payer or plan administrator applies a contracted payer’s fee schedule to services rendered by a provider, without the provider’s prior knowledge or consent.

The most common scenario is when a contracted network leases, for a fee, it’s contracted rates to a non-contracted network or administrator.

Tips to mitigating the impact of Silent PPO’s:

  • Review payer contracts.  Watch for “all payers” clause or similar verbiage which could be an indication that the payer leases its network.
  • If this language is present, contact the payer to request an updated contract network affiliated payer list.  Payers typically update these lists no less than every 90 days.
  • Know your contract term date(s).
  • Consider contracting directly with non-contracted payers, as justified by patient volume & fee schedule analysis.
  • Please notify Practicefirst prior to contracting with any network.

Note that there are times where practices decide to deliberately contract with a network. Carriers such as Multiplan have hundreds of payers that rent their network.  By participating with large, national networks such as this, please be sure your office staff is trained in recognizing the various logo’s etc. that give patients access to your practice, although you don’t directly contract with their insurance carrier.  For example, a patient presents with an Aetna insurance card, which you are not contracted with.  However, you are contracted with Multiplan.  If the card has a Multiplan logo on it, that patient can be treated as they’d be considered “in network” due to your contract with the network, Multiplan.

For Billing questions, please contact Sarah Howarth at 716-348-3923 or sarahh@pracfir


By Emilie J DiChristina, MBA for PracticeFirst 

It will come as no surprise to anyone reading this that financial and time stressors are continuing to plague physicians and health care providers who are either in single provider of small practice settings.

Prior to the start of the ACA implementation it was predicted that the ACA would be the final straw for many physicians. Further, it was predicted that combining with the retirement of physicians, there would be a shortage of people entering the profession of medicine, a heavier reliance on mid-level or non-physician providers, and of course…an onslaught of newly insured.

Guess what, everything predicted is being proven correct to some extent, and with declining enrollments and a change from the “carrot & stick” approach to quality to a “STICK & really, really tiny carrot” approach – non-retiring physicians are scrambling for a way to survive.

So providers are facing choices. Which are you planning to choose? Are you:

  • Retiring or going into research?
  • Hiring large numbers of mid-levels to increase productivity (read # of patients seen per hour)?
  • Trying to become a PCMH?
  • Joining an ACO?
  • Selling your practice to a hospital?
  • Entering into some form of a Physician-Hospital arrangement (PHO)?
  • Considering joining a Management Services Organization (MSO)?

While the financial and life-style issues causing providers to adopt new ways of practicing are the same, some of the decisions by private practice physicians planning a change are in large part predicated on the age and/or specialty of the physician.

Younger physicians, fresh out of teaching environment take more readily to actual employment by a hospital or larger practice. Why? The primary reason is that they are not accustomed to autonomy fresh out of school, so they do not have an expectation of autonomy. Add to that set shifts, steady income (with or without bonuses) not reduced by the overhead of a private practice, and shared coverage and the “quality of life seems ideal. In many areas of the country, physicians working for hospitals even have union protection.

The physicians who are in the “middle age” of their practices are more likely to look for a PHO or MSO model to join in order to achieve efficiencies, economies of scale, and often, to insure there is a referral system established. This often seems to be a good model for specialty groups as well (e.g. radiologists, GYNs). An important decision point for this age group seems to be the ability to maintain full or partial autonomy, despite formalized linkages. The PHO or MSO model also requires governance and participation or buy-in from the providers who make up the entity, and the physicians in this age group understand the responsibility and the benefit of participation, even if it takes time away from the family.

The younger “middle aged” physicians are also those who feel most comfortable with establishing their practice as a PCMH, adding mid-levels and sharing space with specialists or support services to provide the “home” model for their patients.

The older, established physicians are indeed contemplating different models of practice as well. They however are looking to sell completely to a hospital or another provider, and step away from practicing entirely, or work part-time. They don’t want to work in an environment where that have no autonomy, they don’t want to worker harder as they should be facing an easier time of life, they are not as tech savvy and the EMR/Meaningful Use and ACA requirements are NOT what they got into medicine for…

So, where are you in the scheme of things? What moves have you made? What moves are you contemplating? Is someone making you feel like the choices they are offering is the best thing since sliced bread?

Well we can’t help you with making those decisions but over the next few months we will try to help you understand the pros and cons of the major practice models and linkages you may be considering.

Until then, if you have specific questions you wish answered, feel free to email them to us at


By Sarah Howarth, Billing Manager


Charge slips / Encounters that cannot be submitted to the insurance carrier due to pertinent billing information that is lacking are returned to your office on a weekly basis, as a Chart Return. For PF’s non-PBS Medcode Corp. clients, examples of lacking information can pertain to missing CPT codes, diagnosis codes, modifiers, dates of service, etc. For PF’s PBS Medcode Corp. clients, examples of lacking information can pertain to size of laceration, final diagnosis missing, chart pages missing, etc.

At the end of each month, you will receive a summary of all outstanding Chart Returns. These claims have not been paid or submitted to the insurance carrier. Please keep in mind that any Chart Returns that you have recently addressed may not have been reviewed by our staff yet and subsequently still appear on the month-end Chart Return summary.  

If you do not have an understanding of why the Charge slip / Encounter has been returned to you, please contact us.


Beginning January 1, 2014, you may begin to see some Univera Healthcare member identification cards bearing the TPA (Third Party Administrator) logo.  Referral and preauthorization requirements for this line of business will be indicated on the back of the ID card.  Please provide Practicefirst with copies of the new insurance cards to ensure claim processing runs smoothly for your practice. 



If you are participating in the Medicare EHR Incentive Program, you must attest to demonstrating meaningful use of the data collected in 2013 by February 28, 2014. 

2014 is the last year to begin participation in the EHR Incentive Program. The first year of participation requires reporting for a continuous 90-day period.  Reporting for following years involves meeting the requirements for the entire calendar year.


January 1, 2014 will mark a new reporting period for the Medicare Physician Quality Reporting System. To avoid a payment reduction of 1.5% in 2016, providers must fulfill the reporting requirements for PQRS.  Providers must report on 3 measures or 1-2 measures for at least 50% of Medicare Part B patients seen in 2014. Additional information regarding the requirements for 2014 will be posted on the CMS website by December 31, 2013. 


One of the provisions included in the CY 2014 Physician Fee schedule final rule includes a separate payment for chronic care management services which will begin in 2015.

Primary Care and Chronic Care Management: As part of CMS’s ongoing efforts to appropriately value primary care services, Medicare will begin making a separate payment for chronic care management services beginning in 2015. In last year’s final rule, CMS established separate payment for transitional care management services for a beneficiary making the transition from a facility to the community setting. In this final rule, CMS further emphasized their support for advanced primary care through their establishment of policies to facilitate separate payment for non-face-to-face chronic care management services for Medicare beneficiaries who have multiple (two or more), significant chronic conditions.

Chronic care management services include the development, revision, and implementation of a plan of care; communication with the patient, caregivers, and other treating health professionals and medication management. Medicare beneficiaries with multiple chronic conditions who wish to receive these services can choose a physician or other eligible practitioner from a qualified practice to furnish these services over 30-day periods.

To review the final policy fact sheet, please access:


CMS has issued the following guidance for the Health Insurance Marketplace:

It is the beginning of the New Year and you’ll be verifying your patient’s insurance status when they show up in your office. With the beginning of the Health Insurance Marketplace, also known as Health Insurance Exchange, over a million people will have a new insurance plan. In many cases, this will be the first time they have had insurance in years.   Many of these people will have signed up for their plan within the past few days. They may not have received their card yet or they may be unaware of the need to carry their insurance information. You may find your office needing to verify their coverage.

 How do you verify their coverage?

If the marketplace in your state is run by the Federal government, it is best to call their plan’s customer service line, a list of all plans and their customer service numbers can be found at:

 A fact sheet can be utilized for using the data base which is located:

If you can’t find the number, call the Marketplace Call Center (1-800-318-2596).

If your state has its own health insurance exchange, contact your state. To find the website for your state exchange, select the name of your state in the box at the left hand side of the health care website at:

How else can you help your patient?

Remind your patients to keep all of their paperwork and receipts from all of their doctor’s appointments and from the pharmacy as well. They may need them for their insurer. Remind them they should carry their card at all times. If they don’t have a card, they can contact their plan to get a card.

 If the patient is uninsured, they have until March 31st to sign up for non-employer based coverage. They can go to to sign up for a plan and apply for financial assistance. The vast majority of uninsured will qualify for financial assistance to reduce their costs. You can also download copies of various fact sheets or educational material for your patients at:

Posted in Affordable Care Act, Health Care Reform, Meeting Quality Indications, PPACA, Practice Based News, Practicefirst's Billing Updates | Tagged , , , , , , | Leave a reply


By Emilie DiChristina for PracticeFirst

In our last issue of our practice newsletter we discussed the financial risks associated with the Affordable Care Act related to the extraordinarily long grace periods for non-payment of premiums. Refer back to our PracticeFirst Blog to review.

By now, we hope that you have advised all of your front end staff of the importance of getting financial agreements signed at the start of 2014, regardless of the type of insurance or length of time an individual has been your patient, AND we hope that you have amended your financial agreement to include “failure to pay premiums resulting in loss of coverage”.

So…now on to a yearly reminder which can also adversely affect your practice’s finances – this of course is the fact that at the start of the year many people start with high-deductibles and co-insurances which may  essentially mean that the patient should in fact be paying the entire cost of a visit up-front.

What has your practice done in preparation for this yearly event of increased risk? Are patient’s advised at the time appointments are scheduled that they will be responsible for their deductible or co-insurance? Have you a payment plan established for your office and your patients? Have you updated your fee schedule for self-pay patients? Do you have a credit-card on file policy?

Remember that this is a yearly rite of passage for practices which has been getting more difficult and places practices at more financial risk each year because co-insurances and deductibles are rising each year!

The impact on the patient of increasing health plan deductibles and co-pays is bad, but for your practice it can be financially devastating because collecting these (essentially self-pay) amounts is difficult to say the least.

This cost-shifting to patients has been increasing each year, but is also expected to be a major concern under the ACA because the law requires people to have insurance while allowing plans such as the “Bronze” or catastrophic plan. These plans have a high deductible and a lower premium. So, just as employers see the benefit in having their employees enrolled with a high deductible plan (although they often offered an HSA to balance the effect on the employee), the ACA allows these “Bronze” plans to allow people to meet the mandate but at lower cost.

It all shapes up to another risk to your practice, unless you have a strong front end staff, a dedicated collections program and a practice administrator who understand the issues related to balancing customer service with effective revenue management.

So what do you need to do?

  • Ask us for help, if you need it!
  • Remember that ANY owed amount should be collected at the time of the service (or that signed agreements to pay and payment plans are in place at the time of the service).
  • Remember that deductibles, unlike co-pays, are often harder to collect as the office may not know what the deductible is – UNLESS, the front end staff verify insurance and patient responsibility BEFORE the visit! This requires your front end staff to understand the value and risk of performing or failing to perform the verification.
  • Make sure that insurance verification is done for EVERY visit because as we noted, under the ACA, patients may change insurance coverage frequently or not have paid their premium and be under the last 60 days of the grace period (which means service at your own risk!).

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By Emillie J DiChristina, MBA for PracticeFirst

Whether you are a fan of the Affordable Care Act or take some other view, we at PracticeFirst want to make sure you are prepared for some of the potential financial risk arising from all of the newly insured patients your practice may encounter.

Most providers are worried about reimbursement rates being offered by insurers participating in the exchanges, as well as the greater number of people being covered by Medicaid and the potential for decreased Medicare rates.

With all this on your mind, it may have been easy to miss the potential financial risk caused by “the premium grace period” which is significantly different under the ACA for any person covered under a tax-subsidized health insurance.

For those people who are low-income, yet who do not qualify for Medicaid, they will be covered under tax-subsidized health insurance. In writing the ACA, there was an expectation that these lower income people may not have the money to pay their premiums without the tax subsidy, and even more likely that they will need to wait for the tax subsidy to be able to afford the premium at all.

So where is the risk?

Currently, when we confirm insurance on our patients prior to providing service we know the date when their insurance lapsed for any reason. Statutorily, private insurers offer a grace period of 10 days for premium payment to insure continued coverage so occasionally we will request the patient sign an agreement to pay, or more likely request a cash payment at the time of service – refunding if the patient offers proof of continued coverage.

Therefore currently, even if you did not request cash up-front, good front office technique reduces your risk of bad debt for services rendered to a potential 10-day grace period,

Unfortunately for healthcare providers, the ACA comes with s proverbial “rub” resulting in much greater bad debt risk when you care for anyone who receives a tax-subsidy for their health insurance. Actually, it comes with two “rubs” leaving you at greater risk.

The first issue placing you at risk is the fact that while you will be able to confirm your patient has insurance, even insurance purchased through the exchange, you are likely to not know if they receive a tax-subsidy to help pay for the insurance,

The second issue placing your practice at financial risk is the real kicker. As part of the ACA, people who qualify for tax-subsidies to purchase health insurance through online marketplaces, or exchanges, are allowed a three-month grace period if they don’t pay their premiums.

Furthermore, a federal rule allows health plans to suspend claims for services that delinquent enrollees receive during the second and third months of the grace period. That means that health-care providers will have to absorb the costs for services provided to people who didn’t pay their premiums and you will have no way of knowing if their premiums have been paid, or where there are in their grace period.

While both the American Hospital Association and the Association of American Medical Colleges have sent letters requesting the government to force health insurers to pay for delinquent enrollee’s claims during the entire three-month grace period there has been no movement toward enacting the proposed changes. This leaves providers in a potentially bad place as they have a high potential for accruing bad debt on services provided between 31 and 90 days of the allowed grace period.  

The American Hospital Association was quoted as saying, “Whatever the cost of the grace period, it went from 100 percent liability for the health plans to only a third of the liability,” the association said in a statement. “For providers, it went from zero liability (other than deductibles and cost-sharing) to two-thirds of the liability for all the services.”

So what can you do to decrease this liability, short of refusing to participate in the insurances on the exchanges? The most significant action you can take is to strengthen your front end practices and agreements to pay.

You will have to assume that anyone participating in the exchanges may be tax-subsidized (consider it “universal precautions” for your bottom line) and amend your financial agreement forms to include language in which the patient agrees to pay for any services rendered to them should their insurance coverage lapse for any reason including non-payment of premiums.

You should also look at your fee schedule for self-pay patients (which may be what someone becomes if they have received services and have not paid their premiums). We all know that self-pay often translates into no-pay, so it may be worth considering setting your self-pay fees at the level which you would have received from your average payer potentially increasing your likelihood of receiving payment from patients whose insurance has lapse


For Immediate Release:               Thursday, November 1, 2012

Contact:                                          CMS Office of Public Affairs 202-690-6145



On November 1, 2012, the Centers for Medicare & Medicaid Services (CMS) issued a final rule to implement a provision of the Affordable Care Act that provides increased payments to certain primary care physicians for specified Medicaid primary care services.  Under this provision, certain physicians who provide eligible primary care services will be paid the Medicare rates in effect in calendar years (CY) 2013 and 2014 instead of their usual state-established Medicaid rates, which may be lower than federally established Medicare rates.  The payment increase applies to primary care services delivered by a physician with a specialty designation of family medicine, general internal medicine, or pediatric medicine or related subspecialists.  States will receive 100 percent federal financial participation (FFP) for the difference between the Medicaid state plan payment amount as of July 1, 2009, and the applicable Medicare rate.

The rule provides information about how CMS and states will work together to make the increased payments operational.  The rule includes information about the identification of eligible providers and services and how to meet the statutory requirements when making these payments for services provided through managed care. The rule also provides important information on how this policy applies to the Vaccines for Children (VFC) program, which has its own statutory requirements for billing and payment, and updates the administration fees that may be billed under VFC based on medical inflation rates.

Qualifying Providers

Through the Affordable Care Act, primary care services eligible for the higher Medicaid payment must be delivered by a physician who specializes in family medicine, general internal medicine, or pediatric medicine. This rule specifies that certain physician subspecialists (for example, pediatric cardiologists) who are board certified in those specialties or provide primary care within the overall scope of those categories also qualify for the enhanced payment. The rule also clarifies that the higher payment will be made for primary care services rendered by practitioners—including, for example, nurse practitioners—working under the personal supervision of any qualifying physician.

Implementing the Increased Payments in Fee for Service and Managed Care

The rule provides multiple options for states to allow for flexible implementation in fee-for-service and managed care settings. The rule permits states to either “lock” rates at the level of the Medicare physician fee schedule in effect at the beginning of 2013 and 2014 or modify the rates in alignment with all updates by Medicare.  For operational ease, it does not require states to make site of service adjustments, permitting them instead to make payments at the Medicare rate applicable to the office setting.  It also permits states to either pay in accordance with all Medicare locality adjustments within the state or to develop a rate for each code based on the mean Medicare rate over all counties in the state to be paid on a statewide basis.  The regulation provides that all of the requirements related to the increased payments apply to services reimbursed by Medicaid managed care plans.  States must incorporate the increased payment into contracts with such entities.

Interaction with the Vaccines for Children Program

The rule provides for payment of vaccine administration fees under the VFC program at the lesser of the VFC regional maximum administration fee (the VFC “ceiling”) or the Medicare rates in 2013 and 2014.  This is consistent with VFC program rules which limit payments to the VFC ceiling, which is the state’s regional maximum amount, and to one payment per vaccine administered.  Because the VFC ceiling rates were issued on an interim basis in 1994 and have never been updated, the rule also updates these rates using the Medicare Economic Index, which is a measure of medical practice cost inflation.

The rule can be found at


For Immediate Release:               Thursday, November 1, 2012

Contact:                                          CMS Office of Public Affairs 202-690-6145



The Centers for Medicare & Medicaid Services (CMS) issued a final rule with comment period on November 1, 2012 for Medicare’s payments for physician fees for 2013.  It includes a new policy to pay a patient’s physician or practitioner to coordinate the patient’s care in the 30 days following a hospital or skilled nursing facility stay.  Recognizing the work of community physicians and practitioners in treating a patient following discharge from a hospital or nursing facility will ensure better continuity of care for these patients and help reduce patient readmissions.   The changes in care coordination payment and other changes in the rule are expected to increase payment to family practitioners by seven percent—and other primary care practitioners between three and five percent—if Congress averts the statutorily required reduction in Medicare’s physician fee schedule.

The final rule with comment period also includes a statutorily required 26.5 percent across-the-board reduction to Medicare payment rates for more than 1 million physicians and non-physician practitioners under the Balanced Budget Act of 1997’s Sustainable Growth Rate (SGR) methodology.  However, Congress has overridden the required reduction every year since 2003.  The Administration is committed to fixing the SGR update methodology and ensuring these payment cuts do not take effect.  Predictable, fiscally-responsible physician payments are essential for Medicare to sustain quality and lower health care costs over the long-term.

In addition, the final rule with comment period continues the careful implementation of the physician value-based payment modifier by phasing in application of the modifier and enabling physicians in larger groups to choose how to participate.  The value modifier provides differential Medicare payments to physicians based on comparison of the quality of care furnished to beneficiaries and the cost of care.  The statute allows CMS to phase in the value modifier over three years from 2015 to 2017.  For the 2015, the final rule applies the value modifier to groups of physicians with 100 or more eligible professionals, a change from the proposed rule, which would have set the group size at 25 or above. This change was adopted to gain experience with the methodology and approach before expanding to smaller groups.

The final rule also provides an option for these groups of physicians to choose how the value modifier is calculated based on whether they participate in the Physician Quality Reporting System (PQRS).

For physicians and groups of physicians who elect to participate in 2015, common sense incentives will improve the care that beneficiaries receive; physicians with higher quality and lower costs will be paid more, and those with lower quality and higher costs will be paid less. The performance period for the application of the value modifier in CY 2015 was previously established as CY 2013 in the CY 2012 MPFS final rule.

The final rule continues efforts by CMS to align quality reporting across programs to reduce burden and complexity. The rule makes changes to the PQRS and the Electronic Prescribing (eRx) Incentive Program, the two quality reporting programs applicable to the MPFS, and updates the Medicare Electronic Health Records (EHR) Incentive Pilot Program.  These changes will simplify reporting and align the various programs’ quality reporting approaches so they support the National Quality Strategy.

The final rule also lays out next steps to enhance the Physician Compare website, including posting names of practitioners who, as part of the Million Hearts campaign, successfully report measures to prevent heart disease.  These are recommended measures under PQRS as well.

Among other changes, the final rule also expands access to services that can be provided by non-physicians practitioners.  The rule allows Certified Registered Nurse Anesthetists (CRNAs) to be paid by Medicare for providing all services that they are permitted to furnish under state law.  This change will allow Medicare to pay CRNAs for services to the full extent of their state scope of practice.  The rule also allows Medicare to pay for portable x-rays ordered by nurse practitioners, physician assistants and other non-physician practitioners.

Finally, the rule explains how Medicare will pay for molecular pathology services—the next innovation of clinical laboratory tests that will foster the development of personalized medicine. These tests will be paid under the Clinical Laboratory Fee Schedule with 2013 payment set by the gap filling method.   The final rule also requires a face-to-face encounter as a condition of payment for certain durable medical equipment (DME) items for orders written on or after July 1, 2013.

The final rule with comment period can be viewed at:

The rule will be published on November 16, 2012.  It will take effect January 1, 2013 with a comment period that closes on December 31, 2012