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Physician Fee Schedule Proposed Rule Released

The Centers for Medicare & Medicaid Services (CMS) released a Medicare Physician Fee Schedule (PFS) proposed rule for calendar year (CY) 2019, including updates to the Quality Payment Program (QPP).

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). Last year, CMS finalized a policy to pay new off-campus PBDs through the PFS at a rate equivalent to 40 percent of the Medicare Outpatient Prospective Payment System (OPPS) rate. For CY 2019, CMS is proposing to continue to pay these PBDs at 40 percent of the OPPS rate.

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

  • Payment update: CMS proposes to adjust the annual physician payment rate by 0.25 percent;
  • Telehealth services: For CY 2019, CMS proposes adding two telehealth services to the list for which Medicare providers can be reimbursed. In addition, CMS is adding several new codes for services provided through communications technology that will be paid for by Medicare. These services, which are only provided virtually, are not subject to the usual geographical restrictions applied to Medicare telehealth services;
  • Evaluation and management (E/M) services: CMS proposes changes to the payment rate for E/M visits, as well as changes to simplify documentation requirements for determining which E/M visit codes to bill for a patient office visit.
  • Medicare Shared Savings Program (MSSP): CMS proposes changes to the quality measures in the MSSP—including reducing the total number of measures and focusing more on outcomes measures, such as patient experience—with the goal of reducing burden and aligning the program with CMS’ Meaningful Measures Initiative.

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 proposes to amend existing requirements and provide 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 proposes several changes, including:

  • expanding the definition of eligible clinicians to include physical therapists, occupational therapist, clinical social workers, and clinical psychologists;
  • providing the option to use facility-based scoring (for quality and cost measures) that does not require data submission for facility-based clinicians;
  • retaining bonus points in the scoring methodology for the care of complex patients;
  • removing process-based quality measures that are low-value or low-priority;
  • changing the measures and scoring methodology of the promoting interoperability (previously known as advancing care information) category to align with the Promoting Interoperability Program for hospitals;
  • updating weights for the four performance categories; 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 proposes:

  • extending the existing 8 percent revenue-based nominal risk standard through performance year 2024; and
  • increasing flexibility for the all-payer combination option and other-payer Advanced APMs for non-Medicare payer to participate in the QPP.

CMS will hold a webinar on the QPP CY 2019 proposals on July 17 at 1 pm ET.


Through a request for information (RFI), CMS seeks comment on whether providers and suppliers should be required to take steps to engage in consumer-friendly communication of their charges to help patients understand their potential financial liability for services, including out-of-pocket costs.

America’s Essential Hospitals is analyzing the proposed rule for comment and will send members a detailed Action Update in the coming days. Comments on the proposed rule are due to CMS by Sept. 10.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

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

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