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Physician Fee Schedule Proposed Rule Cuts Outpatient Payments

The Centers for Medicare & Medicaid Services (CMS) has released a Medicare Physician Fee Schedule (PFS) proposed rule for calendar year (CY) 2018 that includes physician payment and quality program changes.

The rule also cuts payments to new off-campus provider-based departments (PBDs) under Section 603 of the Bipartisan Budget Act of 2015 (BBA), which America’s Essential Hospitals opposed in a statement. Last year, CMS finalized a policy to pay new off-campus PBDs through the PFS at a rate equivalent to 50 percent of the Medicare Outpatient Prospective Payment System (OPPS) rate. For CY 2018, CMS is proposing to pay these new PBDs 25 percent of the OPPS rate.

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

  • Payment update — CMS proposes to adjust the annual physician payment rate by 0.31 percent;
  • Telehealth services — For CY 2018, CMS proposes adding five services to the list of telehealth services for which Medicare providers can be reimbursed;
  • Evaluation and management (E/M) services — CMS is seeking comment on updating guidelines for determining and documenting which E/M visit codes to bill for a patient office visit;
  • Medicare Shared Savings Program (MSSP) — CMS proposes numerous changes to the MSSP aimed at reducing burden and streamlining the program. Changes include revising the beneficiary assignment methodology, adding three new chronic care management and behavioral health integration codes, and reducing burden for stakeholders submitting an initial MSSP application;
  • Quality Payment Program (QPP) and Physician Quality Reporting System (PQRS)
    • The last program year for the PQRS was 2016.To avoid the 2018 PQRS downward payment adjustment, 2016 PQRS quality data must have been submitted by the final data submission time frame, January through March 2017. PQRS transitioned to the merit-based incentive payment system (MIPS) under the QPP, and the first MIPS performance period is January through December 2017. CMS recently released a resource document to assist in the transition from PQRS to MIPS; and
    • To align with MIPS data submission requirements, CMS proposes to change the number of required reported measures in the PQRS from nine to six. CMS also proposes similar changes to the number of clinical quality measures physicians report for the Electronic Health Records Incentive Program.

Comments on the proposed rule are due to CMS by Sept. 11.

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


About the Author

Shahid Zaman is a senior policy analyst at America's Essential Hospitals.

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