What You Need to Know about Proposed Changes to Medicare Fee Schedules

The Centers for Medicare and Medicaid Services (CMS) wants to give most Medicare providers a modest pay increase for 2018, though not all providers will see the benefits.

Winners and Losers

For instance, though the proposed rule for the Hospital Outpatient Prospective Payment System (OPPS) allows for a fee schedule increase of 1.75% for outpatient facilities and 1.9% for ambulatory surgery centers, it also calls for a steep reduction in the current payment rates for certain items and services furnished by certain off-campus hospital outpatient provider-based departments.

The Bipartisan Budget Act of 2015 required these items and services to be paid under the Medicare Physician Fee Schedule (PFS) rather than the OPPS beginning January 1, 2017. The rate change now being considered would reduce payment by 50 percent, moving the PFS payment rates for these services from 50 percent of the OPPS payment rate to 25 percent of the OPPS rate. According to CMS, this change “will encourage fairer competition between hospitals and physician practices by promoting greater payment alignment.”

Then there is the PFS conversion rate. For 2018, the overall proposed update to payments under the PFS is .31 percent. This updated conversion factor reflects the .50 percent update established under MACRA, and reduced by .19 percent under the Achieving a Better Life Experience (ABLE) Act of 2014’s misvalued code target recapture amount. By applying these adjustments, plus the budget neutrality adjustment for changes in RVUs, to the 2017 PFS conversion factor of $35.89, the proposed 2018 PFS conversion factor is $35.99.

However, for anesthesiologists, the calculation for the 2018 anesthesia conversion factor—$22.0353—actually results in a slight decrease from the 2017 rate of $22.0454.

Added Covered Services

In addition to setting 2018 fees, the CMS proposals also address which services can be performed and reimbursed.

For instance, in the Proposed Rule for the Ambulatory Surgical Center Payment System, CMS will now cover knee and hip replacements at ambulatory surgery centers. Also, in the proposed PFS, CMS is expanding the list of allowed telehealth services for 2018, including the following:

HCPCS code G0296 (visit to determine low dose computed tomography (LDCT) eligibility);
CPT code 90785 (Interactive Complexity);
CPT codes 96160 and 96161 (Health Risk Assessment);
HCPCS code G0506 (Care Planning for Chronic Care Management); and
CPT codes 90839 and 90840 (Psychotherapy for Crisis).

Documentation Guidelines

CMS also is planning for the future by rethinking documentation guidelines for billing all E/M codes in the 2018 PFS proposed rule.

Currently, physicians must choose either the 1995 or 1997 guidelines which specify how much information must be documented to support the level of service in each of three categories:

History of Present Illness (HPI or History);
Physical Examination (Exam); and
Medical Decision Making (MDM).

Agreeing with stakeholders, CMS has acknowledged that “there may be unnecessary burden with these guidelines and that they are potentially outdated, … especially … for the requirements for the history and the physical exam.” As well, CMS said the guidelines do not reflect the significant changes in technology over recent years, including electronic health record (EHR) use, “which presents challenges for data and program integrity and potential upcoding given the frequently automated selection of code level.”

CMS is floating a range of possible changes to the history and physical exam guidelines, to “both reduce clinical burden and improve documentation in a way that would be more effective in clinical workflows and care coordination.” Specifically, they are seeking comments on the following options:

whether to remove documentation requirements for the history and physical exam for all E/M visits at all levels and instead allow MDM and/or time to serve as the key determinant, since “medical decision-making and time are the more significant factors in distinguishing visit levels,” and “the need for extended histories and exams is being replaced by population based screening and intervention, at least for some specialties.”
whether to simply require documentation that is “generally consistent with complexity of MDM” and no longer include “detailed specifications for what must be performed and documented for the history and physical exam.”
whether CMS should leave it largely to the discretion of individual practitioners to what degree they should perform and document the history and physical exam.
how such reforms may differentially affect physicians and practitioners of different specialties, including primary care clinicians, and how to account for such effects.

While CMS currently is considering changes only to history and exam documentation guidelines, they also are receiving comments about future updates to MDM guidelines that would “foster appropriate documentation for patient care commensurate with the level of patient complexity, while avoiding burdensome documentation requirements and/or inappropriate upcoding.”

Updates to Quality Reporting

Finally, CMS is proposing two other changes to quality reporting programs that may offer needed relief for some physicians, as well as making changes to measures in the ASC Quality Reporting program to “provide patients with more valuable ASC performance data and address the clinical areas that are critical to providers.”

While the PQRS and Value Modifier programs have been replaced with the MACRA Quality Payment Program’s Merit-based Incentive Payment System (MIPS), physicians may still experience the impact of the PQRS/Value Modifier penalties in 2018, based on the 2016 reporting year. The data for that final reporting year had to be submitted by March 2017, so physicians can no longer adjust their submissions. However, CMS is proposing to modify the performance guidelines to better align the past programs with the new MIPS guidelines.

Specifically, CMS is proposing to change the current PQRS program policy that requires reporting 9 measures across 3 National Quality Strategy domains to require only 6 measures.

Likewise, for the Value Modifier, CMS is proposing the following changes:

Reduce the automatic downward payment adjustment for not meeting minimum quality reporting requirements from -4 percent to -2 percent for groups of ten or more clinicians; and from -2 percent to negative -1 percent for physician and non-physician solo practitioners and groups of two to nine clinicians;
Hold harmless all physician groups and solo practitioners who met minimum quality reporting requirements from downward payment adjustments for performance under quality-tiering for the last year of the program; and
Align maximum upward adjustment amounts to 2 times the adjustment factor for all physician groups and solo practitioners.

For the ASC Quality Reporting Program, CMS hopes to add the following three new measures for the 2021 and 2022 payment determinations and subsequent years:

ASC-16: Toxic Anterior Segment Syndrome (TASS) measure (beginning with the CY 2021 payment determination).
ASC-17: Hospital Visits after Orthopedic Ambulatory Surgical Center Procedures (beginning with the CY 2022 payment determination).
ASC-18: Hospital Visits after Urology Ambulatory Surgical Center Procedures (beginning with the CY 2022 payment determination).

CMS also is proposing to remove three measures for the CY 2019 payment determination and subsequent years. The three measures proposed for removal are:

ASC-5: Prophylactic Intravenous (IV) Antibiotic Timing.
ASC-6: Safe Surgery Checklist Use.
ASC-7: ASC Facility Volume Data on Selected Procedures.

Submit Your Comments

For more information about the proposed rules, review the following from CMS:

Comments on the above or other issues contained in the rule must be submitted no later than 5 p.m. on September 11, 2017. To submit your comments, visit the Federal Register website for the PFS or OPPS/ASCPS or review the submission guidelines located at the beginning of each proposed rule.