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CMS Issues Transmittal Summarizing CY 2014 MPFS Final Rule Policies and Announcing the Telehealth Originating Site Facility Fee Payment Amount.

Jennifer Kirchner | December 2013

The Centers for Medicare & Medicaid Services (CMS) issued a transmittal summarizing the policies in the calendar year (CY) 2014 Medicare Physician Fee Schedule (MPFS) final rule and announcing the Telehealth Originating Site Facility Fee payment amount. The transmittal updates the Medicare Claims Processing Manual, Publication 100-04, Chapter 12, Section 190.6 and the Medicare Benefit Policy Manual, Publication 100-02, Chapter 15, Section 270.5.

The transmittal summarizes the following policy changes:

  1. The Sustainable Growth Rate (SGR) and MPFS Conversion Factor for CY 2014:  While the President’s budget calls for averting these cuts, the current law provides for a 20.1 percent reduction for 2014 services. 
  2. Medicare Economic Index (MEI): CMS finalized the proposed revisions to the calculation of the MEI, which is the price index used to update physician payments for inflation.   The weights used in the PFS payment calculation will continue to mirror those in the MEI.
  3. Telehealth Services: CMS modified geographic criteria for eligible telehealth originating sites to include health professional shortage areas (HPSAs) located in rural census tracts of urban areas as determined by the Office of Rural Health Policy.
  4. Revisions To The Practice Expense Geographic Adjustment: As required by the Medicare law, CMS adjusts payments under the PFS every three years to reflect the local cost of operating a medical practice as compared to the national average through geographic practice costs indices (GPCIs). CMS is finalizing new GPCIs to be phased in over CY 2014 and CY 2015.  The separate statutory 1.0 work GPCI floor is scheduled to expire on December 31, 2013 and therefore, the finalized GPCIs do not include the 1.0 work GPCI floor.
  5. Misvalued Codes: CMS finalized the values for around 200 codes in this final rule and assigned interim final values for approximately 200 services, including hip and knee replacements, mental health services, and gastro-intestinal endoscopy services. The interim final rates are open for public comment until January 27, 2014.
  6. Application of Therapy Caps to Critical Access Hospitals (CAHs): CMS finalized its proposal to apply therapy caps and related policies to outpatient therapy services furnished by a CAH beginning on January 1, 2014 in order to properly apply the law that established the therapy caps.
  7. Compliance with State Law for Incident To Services: CMS is requiring as a condition of Medicare payment that “incident to” services be furnished in compliance with applicable state law. This provision is effective on March 3, 2014.
  8. Primary Care and Chronic Care Management: Medicare will begin making a separate payment for chronic care management beginning in 2015. 

Additionally, the transmittal provides that the Telehealth Originating Site Facility Fee payment amount for CY 2014 is 80 percent of the lesser of the actual charge, or $24.63.

The CMS transmittal (2840) summarizing policies under the CY 2014 MPFS final rule and announcing the Telehealth Originating Site Facility Fee Payment Amount is available at:

The CY 2014 MPFS final rule is available at:

Centers for Medicare & Medicaid Services.  “Summary of Policies in the CY Medicare Physician Fee Schedule (MPFS) Final Rule and the Telehealth Originating Site Facility Fee Payment Amount.”  Transmittal 2840.  20 Dec. 2013.

Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, Clinical Laboratory Fee Schedule & Other Revisions to Part B for CY 2014; Final Rule, 78 Fed. Reg. 237, 74230, 74823 (Dec. 10, 2013).

About the Author

Jennifer Kirchner is a licensed attorney in Illinois and Wisconsin. Ms. Kirchner has expertise in assessing provider compliance with the Anti-Kickback Statute, Stark Law, the False Claims Act, HIPAA Privacy and Security Rules and clinical research laws and regulations.