Policy, payment and quality provisions changes proposed for Medicare Physician Fee Schedule

Published September 7, 2018

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On July 12, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that includes proposals to update payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2019.

The proposed rule is one of several that reflect a broader, Administration-wide strategy to create a healthcare system that results in better accessibility, quality, affordability, empowerment, and innovation.

Background on the Physician Fee Schedule

Payment is made under the PFS for services furnished by physicians and other practitioners in all sites of service. These services include, but are not limited to, visits, surgical procedures, diagnostic tests, therapy services, and specified preventive services.

In addition to physicians, payment is made under the PFS to a variety of practitioners and entities, including nurse practitioners, physician assistants, and physical therapists, as well as radiation therapy centers and independent diagnostic testing facilities.

Payments are based on the relative resources typically used to furnish the service. Relative Value Units (RVUs) are applied to each service for physician work, practice expense, and malpractice. These RVUs become payment rates through the application of a conversion factor. Payment rates are calculated to include an overall payment update specified by statute.


Streamlining Evaluation and Management (E/M) Payment and Reducing Clinician Burden

CMS is proposing a number of coding and payment changes to reduce administrative burden and improve payment accuracy for E/M visits. We propose:

  • to allow practitioners to choose to document office/outpatient E/M visits using medical decision-making or time instead of applying the current 1995 or 1997 E/M documentation guidelines, or alternatively practitioners could continue using the current framework;
  • to expand current options by allowing practitioners to use time as the governing factor in selecting visit level and documenting the E/M visit, regardless of whether counseling or care coordination dominate the visit;
  • to expand current options regarding the documentation of history and exam, to allow practitioners to focus their documentation on what has changed since the last visit or on pertinent items that have not changed, rather than re-documenting information, provided they review and update the previous information; and
  • to allow practitioners to simply review and verify certain information in the medical record that is entered by ancillary staff or the beneficiary, rather than re-entering it.

We are also soliciting comment on how documentation guidelines for medical decision-making might be changed in subsequent years.

To improve payment accuracy and simplify documentation, we propose new, single blended payment rates for new and established patients for office/outpatient E/M level 2 through 5 visits and a series of add-on codes to reflect resources involved in furnishing primary care and non-procedural specialty generally recognized services. As a corollary to this proposal, we propose to apply a minimum documentation standard where Medicare would require information to support a level 2 CPT visit code for history, exam and/or medical decision-making in cases where practitioners choose to use the current framework, or, as proposed, medical decision-making to document E/M level 2 through 5 visits. In cases where practitioners choose to use time to document E/M visits, we propose to require practitioners to document the medical necessity of the visit and show the total amount of time spent by the billing practitioner face-to-face with the patient. Practitioners could choose to document additional information for clinical, legal, operational or other purposes, and we anticipate that for those reasons, they would continue generally to document medical record information consistent with the level of care furnished. However, we would only require documentation to support the medical necessity of the visit and associated with the current level 2 CPT visit code.

To recognize efficiencies that are realized when E/M visits are furnished in conjunction with other procedures, we propose a multiple procedure payment adjustment that would apply in those circumstances. We also propose new coding to recognize podiatry E/M visits that would more specifically identify and value these services. We propose a new prolonged face-to-face E/M code, as well as a technical modification to the practice expense methodology.

We propose to eliminate the requirement to justify the medical necessity of a home visit in lieu of an office visit, and solicit public comment on potentially eliminating a policy that prevents payment for same-day E/M visits by multiple practitioners in the same specialty within a group practice. For E/M visits furnished by teaching physicians, we also propose to eliminate potentially duplicative requirements for notations in medical records that may have previously been included in the medical records by residents or other members of the medical team.

We are soliciting public comment on the implementation timeframe of these proposals, as well as how we might update E/M visit coding and documentation in other care settings in future years. CMS believes these proposals would allow practitioners greater flexibility to exercise clinical judgment in documentation, so they can focus on what is clinically relevant and medically necessary for the beneficiary.

For more information on how these proposed changes might affect you, please contact MCM Healthcare Consulting Partner Cristine Miller, CMPE, CHC, CCS-P via e-mail or phone (502.882.4341).

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