Top 10 Takeaways: 2019 Medicare Physician Fee Schedule

On November 1, 2018, the Centers for Medicare & Medicaid Services (CMS) released the CY 2019 Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Medicare Part B [CMS-1693-F] Final Rule, which includes policy changes related to Medicare physician payment and the Quality Payment Program (QPP). The final rule also implements provisions of the Bipartisan Budget Act of 2018 (BBA) and addresses policies related to the Medicare Shared Savings Program (MSSP), Medicare Part B drugs, Appropriate Use Criteria and the laboratory fee schedule, among other topics. It will be published in the Federal Register on November 23, 2018. Comments solicited on certain provisions of the Final Rule are due on December 31, 2018.

A topline summary of the major provisions follows.

2019 Medicare Physician Fee Schedule Changes

In the 2019 Physician Fee Schedule (PFS) Final Rule, CMS continues to emphasize the themes of providing regulatory and administrative relief for clinicians, modernizing payment policies to promote services such as virtual care, and saving Medicare beneficiaries’ time and money while improving their access to high-quality services. CMS projects that the rule will save clinicians $87 million in reduced administrative costs in 2019 and $843 million over the next decade.

1. 2019 Medicare Physician Conversion Factor Remains Essentially Flat

√ The 2019 Medicare Physician CF is $36.0391.

The 2019 final physician conversion factor (CF) is $36.0391, a slight increase from the 2018 PFS CF of $35.9996. The 2019 anesthesia CF is $22.2730, a slight increase from the 2018 anesthesia CF of $22.1887.

The 0.50 percent update specified by the Medicare Access and CHIP Reauthorization Act (MACRA) was reduced to 0.25 percent as a result of a provision in the BBA of 2018. The CF was then further reduced by a relative value unit (RVU) budget neutrality adjustment (-0.14 percent). In addition, in 2019, Merit-Based Incentive Payment System (MIPS) eligible clinicians’ Medicare fee-for-service (FFS) payments will be affected by their 2017 MIPS performance, which by statute, was scheduled to affect 2019 Medicare payments by +/- 4 percent. Yet, due to budget neutrality adjustments, it is expected that the top positive MIPS 2019 adjustment, with the inclusion of the exceptional performance bonus, will be just below 2 percent.

MIPS is a budget-neutral program. This means that the dollar amounts for positive and negative payment adjustments must balance out. CMS clarified in the final rule that the reduction from the maximum positive adjustments set forth by statute is the result of where the agency has set the MIPS performance threshold. The MIPS performance threshold represents the score that is necessary to receive a neutral to positive payment adjustment for the year. For 2017, clinicians needed three out of 100 points to avoid a negative payment adjustment. The agency stated that if it had set a higher performance threshold, there would have been more dollars available for positive payment adjustments.

Physician payment is based on the application of the dollar CF to work, practice expense (PE) and malpractice RVUs, which are then geographically adjusted. PE RVUs capture the cost of supplies, equipment and clinical personnel wages used to furnish a specific service. CMS finalized a proposal to update input prices for supplies and equipment based upon a large survey conducted by a market research firm under contract to CMS. CMS will phase in these new inputs over a four-year period beginning in 2019. These supply and equipment prices were last systematically developed in 2004–2005. Based on public comments, CMS revised inputs for several items from what was originally proposed based on the contractor’s findings. These changes are summarized in Table 9 of the final rule.

2. Proposed E/M Overhaul Scaled Back and Delayed

√ CMS delays changes to the coding and payment structure for E/M services until 2021, but will implement several documentation policies in 2019.

For 2019, CMS originally proposed sweeping changes to evaluation and management (E/M) payment and documentation requirements, including creation of a single payment for level 2–5 office codes and significantly reduced documentation requirements. In this final rule, CMS delays changes to the coding and payment structure for E/M services until 2021, but implements several documentation policies in 2019.

Because E/M services make up approximately 40 percent of allowed charges under the PFS (office/outpatient E/M services comprise approximately 20 percent of allowed charges), any changes would have a wide-ranging impact across different specialties. For years, there has been significant concern around the complexity and burden of documenting E/M services. While the proposal for reductions in documentation requirements was generally welcomed, CMS faced significant criticism from the provider community on the proposal for a single payment for level 2–5 E/M codes. Letters requesting withdrawal of the proposal signed by a coalition of 170 groups were submitted to both congressional leadership and CMS.

CMS finalized the following policies for 2019:

  • Removed the need to justify providing a home visit instead of an office visit
  • Changed the required documentation of the patient’s history to focus only on the interval history since the previous visit
  • Eliminated the requirement for physicians to re-document information already documented in the patient’s record by practice staff or by the patient

CMS also declined to move forward on a proposal to reduce payment for office visits when performed on the same day as another service. Nor did CMS establish separate coding and payment for podiatric E/M visits.

CMS finalized the following payment and coding policies but delayed implementation until 2021:

  • Reduction in the payment variation for E/M office/outpatient visit levels by paying a single rate for E/M office/outpatient visit levels 2 through 4 for established and new patients while maintaining a higher payment rate for E/M office/outpatient visit level 5
  • Implementation of several changes allowing greater flexibility and reduced burden in documentation, including allowing clinicians to use medical decision-making or time instead of applying the current 1995 or 1997 E/M documentation guidelines
  • Implementation of add-on codes that describe the additional resources inherent in visits for primary care and particular kinds of non-procedural specialized medical care (not specialty-specific; reported with level 2–4 codes; generally would not impose new documentation requirements)
  • Adoption of a new “extended visit” add-on code for use only with E/M office/outpatient level 2 through 4 visits to account for the additional resources required when practitioners need to spend extended time with the patient

CMS posted a chart on E/M payment amounts here.