The Centers for Medicare & Medicaid Services (CMS) released the Medicare Physician Fee Schedule (PFS) Final Rule on Oct. 31, 2014. It addresses changes to the physician fee schedule as well as other important Medicare Part B payment policies. The rule became effective Jan. 1, 2015, and was published in the Nov. 25, 2014, Federal Register.

The 2015 Medicare Conversion Factor

At the conclusion of 2014, the Medicare conversion factor (the amount Medicare pays per relative value unit [RVU]) was set at $35.8228. The 2015 Final Rule is still governed by the Sustainable Growth Rate (SGR) formula, which has mandated continuing annual cuts to physician payments, resulting in year-after-year 11th-hour congressional rescues with short-term fixes. The 2015 Final Rule published a conversion factor of $28.2239, representing a 21.2 percent cut to physician payments. Congress does not seem to have the political will to confront the $130 billion task of eliminating the SGR formula, and to date it has opted for a series of short-term legislative patches. On April 1, 2014, President Barack Obama signed into law the Protecting Access to Medicare Act of 2014. The law provided stabilization of the Medicare conversion factor for services through March 31, 2015, after which the 21.2 percent SGR-mandated cuts will have to be confronted once again (Table 1).

2015 Geographic Practice Cost Index Update

The geographic practice cost index (GPCI) is used by CMS to modify payment based on regional differences relating to cost of living, malpractice, and practice cost/expense. Some states have a permanently fixed work GPCI. They include Alaska at 1.5 and the frontier states (Montana, Nevada, North Dakota, South Dakota, and Wyoming) at 1.0. Other states are subject to a work GPCI that ranges from 0.6–1.2. In past years, Congress passed single-year legislation setting a GPCI work floor of 1.0 that then expired at the end of the year. The existing 1.0 floor on the physician work GPCI was previously extended through Mar. 31, 2015. The 2015 Final Rule published payment rates that include expiration of the GPCI floor, which will significantly impact more rural areas beginning with dates of service Apr. 1, 2015, absent Congressional action.

ED E/M RVUs Enjoy Slight Increases for 2015

Emergency medicine’s RVU values are remaining stable for 2015. As published in the 2015 rule, emergency medicine will experience a 1 percent update to our overall RVU values in 2015. However, accounting for Medicare’s formulaic rounding processes, the realized gains will be closer to half a percent. Essentially, our RVUs are stable, with 99285 seeing a nearly 1 percent increase. This is independent of any looming change to the conversion factor. The RVUs for our major reimbursement drivers, the E/M codes, have only second decimal point adjustments, which are predominantly due to small changes in practice expense (PE) and liability cost. Of note, the work RVUs have not changed for 2015 and remain stable as they have for the past several years (Table 2).