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Physician Fee Schedule Final Rule Released

The Centers for Medicare & Medicaid Services (CMS) released a Medicare Physician Fee Schedule (PFS) final rule for calendar year (CY) 2019 that includes updates to the Quality Payment Program (QPP) and documentation and payment changes for evaluation and management (E/M) services.

CMS is delaying until 2021 implementation of a proposal to consolidate payment rates for E/M services. Currently, there are 10 E/M codes and payment amounts for office visits: levels 1 through 5 for new patients and levels 1 through 5 for established patients. CMS had proposed to pay a single blended rate for levels 2 through 5 for new patients and a single payment rate for levels 2 through 5 for established patients. In the final rule, CMS modifies this proposal by consolidating the payment rates for levels 2 through 4, and continuing to pay for level 5 at its own rate.

CMS also finalized policies to simplify documentation requirements for determining which E/M visit codes to use for a patient office visit. The majority of these documentation changes will take effect in 2021, with some minor changes taking effect in 2019.

The rule continues a policy of reduced payments to new off-campus provider-based departments (PBDs) under Section 603 of the Bipartisan Budget Act of 2015 (BBA). For CY 2019, CMS will pay these PBDs at 40 percent of the Medicare Outpatient Prospective Payment System (OPPS) rate.

The PFS final rule also includes these provisions of interest to essential hospitals:

  • Payment update: CMS will adjust the annual physician payment rate by a net 0.11 percent (a statutory update factor of 0.25 percent adjusted downward for budget neutrality purposes);
  • Telehealth services: For CY 2019, CMS finalizes the addition of two telehealth services to the list for which Medicare providers can be reimbursed. In addition, CMS adds several new codes for services provided through communications technology for which Medicare will pay. These services, only provided virtually, are not subject to the usual geographical restrictions applied to Medicare telehealth services;
  • Opioid law: CMS also makes changes required by the recently-passed bipartisan opioid law, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act. Specifically, CMS revises the Medicare regulations to remove geographic restrictions on telehealth services provided to patients with substance use disorder for purposes of treating the substance use disorder or co-occurring mental health disorder. In accordance with the law, CMS also adds a beneficiary’s home as an originating site. These changes are effective July 1, 2019. The law also added a new Medicare benefit category for opioid treatment programs, beginning Jan. 1, 2020; and
  • Medicare Shared Savings Program (MSSP): CMS finalizes changes to the quality measures in the MSSP, including removing eight measures from the quality measure set. CMS also increases focus on outcomes measures, such as patient experience, with the goal of reducing burden and aligning the program with CMS’ Meaningful Measures Initiative. The rule also provides a voluntary six-month extension for existing accountable care organizations with participation agreements that expire Dec. 31.

Quality Payment Program Updates

Under the QPP, eligible clinicians participate in one of two tracks: the default Merit-based Incentive Payment System (MIPS) or Advanced Alternative Payment Models (APMs).

For CY 2019, year three of the program, CMS finalizes changes to existing requirements and provides new policies allowing clinicians to choose how to participate in either the MIPS or Advanced APM tracks, based on their practice size, specialty, location, or patient population.

For MIPS, CMS finalizes several changes, including:

  • expanding the definition of eligible clinicians to include physical therapists, occupational therapists, speech-language pathologists, audiologists, clinical psychologists, and registered dietitians or nutrition professionals;
  • providing the option to use facility-based scoring (for quality and cost measures) that does not require data submission for facility-based clinicians starting in performance year 2019;
  • retaining the five-point bonus in the scoring methodology for clinicians who treat medically complex patients;
  • allowing individual eligible clinicians to submit measures for the quality performance category via multiple collection types;
  • removing 26 MIPS quality measures that are process-based, low-value, or low-priority and adding eight new measures;
  • changing the measures and scoring methodology of the promoting interoperability category (previously known as advancing care information) to align with the Promoting Interoperability Program for hospitals;
  • updating weights for the four performance categories (quality at 45 percent; cost at 15; promoting interoperability at 25; and improvement activities at 15); and
  • adding a third element to the low-volume threshold determination and giving eligible clinicians who meet one or two elements of the low-volume threshold the choice to participate (ie. an opt-in policy).

For Advanced APMs, CMS finalizes:

  • extending the existing 8 percent revenue-based nominal risk standard through performance year 2024;
  • updating the Advanced APM and Other Payer Advanced APM certified electronic health record technology (CEHRT) threshold to require that at least 75 percent of eligible clinicians use CEHRT; and
  • increasing flexibility for the all-payer combination option and Other Payer Advanced APMs for a non-Medicare payer to participate in the QPP, including the use of a multi-year determination process by which a determination of Advanced APM status is effective for the duration of the model agreement period (up to five years).

CMS will host a webinar providing an overview of QPP year three updates on Nov. 15 from noon–1:30 pm ET.

Transparency

In the proposed rule, CMS sought comment on whether to require providers and suppliers engage in consumer-friendly communication of their charges to help patients understand their potential financial liability for services, including out-of-pocket costs. CMS finalizes no related policy and the agency will continue to seek information to help inform future rulemaking.

America’s Essential Hospitals is analyzing the final rule and will send members a detailed Action Update in the coming days.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Maryellen Guinan is a senior policy analyst at America's Essential Hospitals.