CMS Publishes Physician Fee Schedule Final Rule

On October 31, 2014, CMS released its final rule for the CY 2015 Physician Fee Schedule (PFS). The rule outlines the Medicare payment adjustment for clinical laboratory services and other policy adjustments. Click here to view.  See pages 67750-67751   and 67993

2015 Part B Clinical Laboratory Fee Schedule (CLFS) Update 

The following is a summary of changes to the Part B CLFS that will take effect in 2015. 

There are two categories of changes to consider:

  1. Regular, recurring increases/decreases

  2. Reductions due to "Sequestration"

Category 1: Regular, recurring increases/decreases

Effective January 1, 2015 

 CPI (increase)


 Productivity Adjustment (decrease)


 ACA (Obamacare) (decrease)


 (5th of 5 consecutive cuts)





                                                Rounded to



Category 2: Sequestration

The 2% sequestration reduction that happened in 2013 and 2014 remains in effect. However, there are no additional reductions for 2015. The net effect is 0%.

In 2015, the cut to the Part B CLFS will be the -0.3% effective on January 1, 2015.

LCD Coverage Process 

The proposed rule included a recommended approach toward adjusting the current LCD determination process, reducing the comment period on coverage proposals, eliminating stakeholder meetings to address proposed coverage decisions and otherwise expediting CMS’s decision-making process.NILA raised concerns with CMS’s proposed approach, expressing a need for a process that allows for greater transparency and stakeholder engagement.  In the final rule, CMS determined, after receipt of numerous comments similar to NILA’s, that they would not implement the proposed reforms to the LCD process at this time and would revisit this issue at a later date through separate notice and comment rule making. 

Misvalued Codes 

The "Protecting Access to Medicare Act of 2014" (PAMA) expanded the categories of services that the HHS Secretary is directed to examine for the purpose of identifying potentially misvalued codes. The nine new categories are as follows: 

  • Codes that account for the majority of spending under the Physician Fee Schedule (PFS).

  • Codes for services that have experienced a substantial change in the hospital length of stay or procedure time.

  • Codes for which there may be a change in the typical site of service since the code was last valued.

  • Codes for which there is significant difference in payment for the same service between different sites of service.

  • Codes for which there may be anomalies in relative values within a family of codes.

  • Codes for services where there may be efficiencies when a service is furnished at the same time as other services.

  • Codes with high intra-service work per unit of time.

  • Codes with high Practice Expense (PE) Relative Value Units RVUs).

  • Codes with high cost supplies.

The final PFS rule includes a listing of codes that CMS has determined are potentially misvalued codes.  Included in this code list are: 55700 (being revised in the rule to G0416) Biopsy of Prostate and 88185 Flowcytometry/tc add-on, which could see reimbursement reductions in 2016 and beyond.   

CMS has finalized its proposal to use a single code, G0416, for all prostate biopsy pathology services, deleting all other G codes for prostate biopsies. The new code is to be used regardless of the number of biopsies submitted. 

Technological Review of CLFS 

The final PFS rule confirms that CMS will not revise the Part B Clinical Laboratory Fee Schedule (CLFS) payment rates based on technological changes. CMS states that it will establish a separate rulemaking process to establish parameters for the collection of private payor rates and new payment assessment process in accordance with PAMA.  

The final rule is expected to be published in the November 13, 2014Federal Register.