During last year’s holidays, the Centers for Medicare and Medicaid Services were working hard in order to release the 2014 Medicare physician fee schedule. This critical schedule influences doctors and healthcare facilities around the country and includes one of the most importance announcements regarding the Medicare Conversion Factor for 2014. The new rules also include provisions for physical quality programs. Changes could be in the works for physician groups that have more than 10 eligible doctors on staff.

Patient Care Beyond Office Visits

The changes also include a proposal to support care management that goes beyond routine office interactions and other programs that are designed to increase high quality care and efficiency within Medicare. The care coordination policy is a big accomplishment for CMS and shows the dedication to improving care across the board. For many beneficiaries, the year 2015 will be important for recognizing care outside of the traditional face to face meeting.

The agency is setting up separate payments for those services where a patient is cared for outside of a face to face visit. This is applicable for practices who are set up to provide services in this manner.

Conversion Factor

The conversion factor as decided by CMS is $27.2006, which is a reduction of 20.1% from the current Conversion Factor. Even though this reduction is less than previous estimates, it is still a big cut in physician fee schedule payments if elected officials in Congress opt not to intervene and change the CF. Experts in the field believe that Congress will step in to prevent the 20.1% reduction recommended by CMS. It’s important to note that although it’s critical, the Conversion Factor is only one of a handful of factors that go into the formula determining the final payment that a physician will receive.

Specialty Specific Impacts

For the year 2014, CMS has come out with numbers regarding the impact they anticipate. These are aggregate numbers. The largest percentage decreases by specialty and the largest increases by specialty are included in this report. Most specialties will see some kind of change. The largest decreases will be seen with diagnostic testing facilities, independent labs, pathology, rheumatology, and interventional pain management. The largest increases are in chiropractic, clinical social worker, psychiatry, and clinical psychologists.

  • The overall specialty adjustments might not reflect payment changes in individual procedure payments, but most specialties will see some kind of change.
  • These changes are also independent of any other factors, such as Sustainable Growth Rate or Sequestration.

Medicare Economic Increase

For the calendar year 2014, MEO increases will be an across the board figure of 8%. Since the growth in Medicare Part B spending increased at a rate that was higher than budgeted, the MEI increase has been eliminated.

Sustainable Growth Rate and Payment Update

In the final rule, the SGR pay cut for the year 2014 is 24 percent. This is a major cut, but it is still less than what was anticipated a year ago. CMS is also making two budget neutrality adjustments which result in the net reduction of 20.1 percent in the 2014 Conversion Factory mentioned above.

Lab Fee Schedules

CMS is in the process of finalizing an adjustment to payment rates for test codes related to the Clinical Laboratory Fee Schedule due to changes in technology. At this time, the test code payment rates do not change after the have been set. The exception to this is changes as a result of inflation and other statutory adjustments. With the new review process, CMS will be able to more accurately pay for lab tests that are included on the CLFS.


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