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On Dec. 1, 2014, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would revise the Medicare Shared Savings Program (MSSP) regulations relating to accountable care organizations (ACOs). These proposed changes were published in the Dec. 8, 2014 Federal Register and include changes that would provide increased flexibility for physician practices in various specialties to participate in multiple ACOs.

Summary of proposed revisions

The MSSP regulations require an ACO participant (such as a physician practice) to be exclusive to a single ACO if the participant bills Medicare under any of the Healthcare Common Procedure Coding System (HCPCS) codes listed in the MSSP definition of “primary care services.” This includes evaluation and management (E/M) CPT codes commonly billed not only by primary care physicians but also by physicians in various specialties that are not involved in primary care. Consequently, even specialist physicians and their single specialty practice entities can become ensnared in the MSSP physician exclusivity restriction that prevents participation in more than one ACO.

In recognition of this concern, CMS proposes to revise the beneficiary assignment methodology to remove the services of some physician specialties from the services that are considered in determining beneficiary assignment. The proposed rule would revise the beneficiary assignment methodology by:

  1. Excluding services of physician specialists that CMS views as rarely, if ever, providing primary care;
  2. Adding transitional care management and chronic care management services to the list of primary care codes; and
  3. Expanding the consideration of nurse practitioners (NPs), physician assistants (PAs), and certified nurse specialists (CNSs) in the beneficiary assignment process.

The proposal to exclude various physician specialties in the beneficiary assignment process is particularly significant because it would enhance the ability of physician practices within the excluded specialties (see specialties listed in Table B below) to participate in multiple ACOs. Under this proposal, services of the physician specialties listed in Table A below would continue to be subject to the physician exclusivity restriction.

Current beneficiary assignment and physician exclusivity principles

The MSSP exclusivity restriction prevents a physician practice from being a participant in more than one MSSP ACO if the practice bills Medicare under any of the “primary care service” billing codes. Under the current regulations, primary care physicians and specialists alike are generally precluded from participating in multiple ACOs if their services are billed under the codes falling within the MSSP definition of “primary care services,” or if the services of other physicians, NPs, PAs, or CNSs are billed by their practice entity under those codes. Physicians have some flexibility to skirt the exclusivity restriction by contracting with an ACO as a nonparticipant or billing through separate entities, although these approaches require additional structuring and are often overlooked.

The basic physician exclusivity principles are set forth in 42 CFR § 425.306(b), which states that each ACO participant Taxpayer Identification Number (TIN) upon which Medicare beneficiary assignment is dependent must be exclusive to one ACO. Conversely, if beneficiary assignment is not dependent upon a participant’s TIN then that ACO participant’s TIN is not required to be exclusive.

Assignment is a process that CMS uses to identify those beneficiaries who have received a sufficient level of primary care service from physicians (and in some cases PAs, NPs, and CNSs) within an ACO to justify designating the ACO as primarily responsible for the patient’s care and allowing the ACO to share in any savings relating to those beneficiaries. Assignment to an ACO is determined under a two-step (stepwise) process that focuses on whether physicians affiliated with a particular ACO furnish a plurality (based on Medicare-allowed charges) of primary care services for the beneficiary. A beneficiary will be assigned to an ACO under step one if the Medicare-allowed charges for primary care services furnished to the beneficiary by the ACO’s primary care physicians exceed the Medicare allowed charges for primary care services of primary care physicians who are affiliated with any other ACO or are not affiliated with any ACO. If a Medicare beneficiary receives primary care services but does not see a primary care physician, then assignment of that patient will be determined under step two, which is similar to step one except that the plurality determination is based on Medicare-allowed charges for primary care services of physician specialists, NPs, PAs, and CNSs, rather than primary care physicians. CMS observed in the proposed rule that approximately 92 percent of the Medicare beneficiaries who are assigned to an ACO are assigned under step one, with only eight percent assigned under step two.

The current MSSP regulations define “primary care service” as any service within any of the following CPT and other HCPCS codes:

  • 99201 - 99215 (office or outpatient E/M visits)
  • 99304 - 99340 (E/M services in a nursing or similar facility)
  • 99341 - 99350 (E/M services in the home)
  • G0402 (Welcome to Medicare visit)
  • G0438 and G0439 (annual wellness visits)
  • Revenue center codes 0521, 0522, 0524, and 0525 for federally qualified health centers (FQHCs) and rural health centers (RHCs).

Although the “primary care” label would seem to imply that the services under this definition are commonly associated with primary care, these codes are not unique to primary care. In fact, the principal E/M codes within the definition apply to services of a wide variety of primary care and specialist physicians who sometimes furnish E/M services in office, outpatient, home, or nursing facility settings.

Proposed revisions to beneficiary assignment

The proposed rule would continue to utilize the existing two-step assignment approach, with modifications that broaden the beneficiary assignment in several respects (by adding CPT codes and extending the role of NPs, PAs, and CNSs) and narrow the scope in another respect (by excluding various physician specialties from the process).

The assignment process would expand by adding transitional care management and chronic care management services to the primary care service CPT codes and including primary care services furnished by NPs, PAs, and CNSs in step one of the assignment process (rather than only in step two as under the current assignment methodology). CMS expressed concern that due to the lack of specialty codes on NP, PA, and CNS claims the proposed inclusion of NPs, PAs, and CNSs in step one could distort the process by assigning beneficiaries based on specialty care. CMS is therefore seeking comments on the extent to which NPs, PAs, and CNSs provide non-primary care services and whether their primary care services can be distinguished from other services.

CMS recognizes that physicians within some specialties do not typically furnish primary care services even though they may bill for office visits and other E/M services that fall within the codes for primary care services. CMS therefore proposes to modify the assignment methodology to consider only primary care services of physicians who practice within the specialties that CMS views as likely to be associated with primary care and NPs, PAs, and CNSs.

Under this proposed rule, primary care services of physicians would continue to be included under step one of the assignment methodology if the services are furnished by general practice, family practice, internal medicine, or geriatric medicine physicians. As noted above, step one would be expanded to include primary care services of NPs, PAs, and CNSs.

CMS observed in its commentary that physicians with internal medicine subspecialties frequently provide primary care and sometimes function in a primary care role in treating chronic conditions if the beneficiary does not have a primary care physician. CMS therefore proposes that primary care services billed under the following physician specialty codes would continue to be included in step two of the assignment process: 

Table A


Allergy/immunology                  Nephrology            
Cardiology             Infectious disease            
Gastroenterology              Endocrinology             
Neurology              Rheumatology             
Obstetrics/gynecology              Multispecialty clinic or group practice
Hospice and palliative care              Hematology             
Sports medicine              Hematology/oncology             
Physical medicine and rehabilitation              Preventive medicine             
Pulmonary disease              Medical oncology             
Pediatric medicine             Gynecology/oncology             

The proposed rule would narrow beneficiary assignment by excluding the services of physicians within physician specialties that CMS views as rarely, if ever, providing primary care. In particular, CMS proposes to exclude the following physician specialty codes from step two of the beneficiary assignment process:

Table B


General surgery             Psychiatry             Addiction medicine            
Otolaryngology             Geriatric psychiatry             Critical care (intensivists)            
Anesthesiology              Colorectal surgery              Maxillofacial surgery             
Dermatology              Diagnostic radiology             Neuro-psychiatry             
Interventional pain management             Thoracic surgery              Surgical oncology             
Osteopathic manipulative therapy             Urology              Radiation oncology             
Neurosurgery              Nuclear medicine              Emergency medicine             
Ophthalmology              Hand surgery              Interventional radiology             
Orthopedic surgery              Pain management              Unknown physician specialty
Cardiac electrophysiology              Peripheral vascular disease Sleep medicine             
Pathology              Vascular surgery               
Plastic and reconstructive surgery Cardiac surgery               

CMS noted that it also considered a single-step beneficiary assignment methodology under which all primary care services, other than those of physicians within the excluded specialties, would be considered in the assignment process. Although CMS did not propose this approach, it requested comments on whether it would be preferable to its proposed modifications to the two-step approach.

Physician exclusivity

Under the proposed rule, physician exclusivity would continue to be linked to beneficiary assignment. Specifically, an ACO participant that submits claims for primary care services that are used to determine beneficiary assignment would be required to be exclusive to one MSSP ACO, and other ACO participants would not be required to be exclusive to a single ACO.

The proposed revisions to the assignment methodology would allow greater flexibility for physician practices to participate in multiple ACOs if the physician practice bills only for services of physicians within the specialty codes that are excluded from the assignment process (see specialties listed in Table B above). It is important to keep in mind, however, that even under the proposed rule, physician exclusivity would continue to be determined at the participant (e.g., practice entity) level, so that if a physician practice bills under any of the primary care codes for the services of any of its physicians within any of the step one or step two specialty codes (e.g., general practice, family practice, internal medicine, geriatric medicine, or any of the specialties listed in Table A above) or for the services of any NP, PA, or CNS, the physician practice would not be allowed to be a participant in multiple ACOs. In order to serve multiple ACOs, physicians within the included specialties would need to do so through alternative arrangements, such as contracting with ACOs as a nonparticipant or providing services through separate entities.”

* * *

The proposed rule was published in the Federal Register on Dec. 8, 2014. Comments to the proposed rule are due by Feb. 6, 2014.