2020 Medicare Physician Fee Schedule: What You Need to Know

The Centers for Medicare and Medicaid Services (CMS) recently published the final draft of the Medicare Physician Fee Schedule (PFS) for 2020. At the heart of the MPFS is the annual conversion factor update. After legislatively mandated adjustments, the 2020 conversion factor will be $36.09, a slight increase above the 2019 PFS conversion factor of $36.04.

In addition to changing the payment rates for 2020, the Final Rule also mandates changes to several payment policies. We’ve highlighted a few of the biggest changes below.

E/M Changes

One of the biggest changes finalized by CMS is an overhaul of office/outpatient E/M visits, which according to a recent Medicare Learning Network call, account for 20 percent of all PFS dollars. In effect, CMS will undo the 2018 rule, which rolled up levels 2 through 4 for established and new patients into a single rate with similar documentation requirements beginning in 2021. Instead, CMS will adopt the changes in description and documentation guidelines the American Medical Association has made to the CPT codes for office/outpatient E/M visits.

According to the CMS Fact Sheet on the finalized policies, the new CPT guidelines retain 5 levels of coding for established patients and reduce the number of levels to 4 for office/outpatient E/M visits for new patients. The CPT changes also revise the times and medical decision making process for all of the codes, allow clinicians to choose the E/M visit level based on either medical decision making or time, and require performance of history and exam only as medically appropriate. 

As well as, CMS will adopt the AMA RVS Update Committee (RUC)-recommended updated values for the office/outpatient E/M visit codes, which will increase payments for these services. See the chart below for how these changes could broadly affect payments before geographic adjustments:

The 2019 final rule also included two add-on codes for use beginning in 2021 to describe the additional resources inherent in visits for primary care and particular kinds of non-procedural specialized medical care, and another set to indicate an extended visit. However, in the 2020 final rule, CMS consolidated those add-on codes into a single code describing the work associated with visits that are part of ongoing, comprehensive primary care and/or visits that are part of ongoing care related to a patient’s single, serious, or complex chronic condition. That single add-on code will be reflected with a new CPT code (CPT 99xxx) rather than GPRO1, which was adopted in 2019 for use beginning in 2021, and CPT codes 99358 and 99359 (prolonged non-face-to-face). 

CMS currently has no proposals for modifying other E/M code sets, though they are continuing to receive comments on possible updates.

Documentation Guidelines

Building off last year’s rule, CMS continued to modify documentation policies so that physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified nurse-midwives can review and verify (sign and date), rather than re-document, notes made in the medical record by other physicians, residents, nurses, students, or  other members of the medical team.

Care Coordination and Management

In addition to changes to office/outpatient E/M visits, CMS finalized several changes to care coordination and management codes.

First, CMS is increasing payment for Transitional Care Management (TCM), which is a care management service provided to beneficiaries after discharge from an inpatient stay or certain outpatient stays.

Next, CMS is creating a new Medicare-specific code for additional time spent beyond the initial 20 minutes allowed in the current coding for chronic care management (CCM) services. CCM services are those within a calendar month provided to beneficiaries with multiple chronic conditions.

Finally, CMS is creating new coding for Principal Care Management (PCM) services, which would pay clinicians for providing care management for patients with single serious and high risk conditions. According to CMS, this change acknowledges “that clinicians across all specialties manage the care of beneficiaries with chronic conditions.

Coverage for Opioid Use Disorder Treatment

In order to combat the continuing opioid epidemic, CMS has created new coding and payment for a bundled episode of care for management and counseling for opioid use disorder (OUD). The new proposed codes describe a monthly bundle of services for the treatment of OUD that includes overall management, care coordination, individual and group psychotherapy, and substance use counseling. CMS is proposing that the individual psychotherapy, group psychotherapy, and substance use counseling included in these codes could be furnished as Medicare telehealth services using communication technology as clinically appropriate.

Ground Ambulance Data Collection System

The Bipartisan Budget Act (BBA) of 2018 mandates the development of a data collection system to collect cost, revenue, utilization, and other information from ground ambulance providers suppliers. In the 2020 PFS final rule, CMS outlined a data collection format, as well as a sampling methodology that CMS will use to identify ground ambulance organizations for reporting each year through 2024 and not less than every 3 years after 2024. The policy also would reduce payments by 10 percent for ground ambulance organizations that are identified for reporting but fail to sufficiently submit data. A hardship exemption request process also was created to allow certain ground ambulance organizations, who do not report as requested, to avoid the payment reduction.

Quality Payment Program MIPS

Several updates to the MIPS program for the 2020 reporting year (2022 payment year) were finalized according to previously published implementation plans, as well as a new MIPS Value Pathways program to simplify MIPS participation.

Quality and Cost Performance Category Weighting

The proposed rule would have reduced the Quality performance category weight from 45 percent in 2019 down to 40 percent in 2020, with the hope of moving toward 30 percent by 2022. Alternately, the proposed rule would have increased the Cost performance category weight up from 15 percent in 2019 to 20 percent in 2020, to achieve 30 percent by 2022. These changes would have helped achieve mandated equal weighting of the Quality and Cost performance categories, which is required by law beginning with the sixth year of the program (2022 performance year). However, CMS did not approve the proposed changes and instead kept the performance category weighting the same for 2020. 

Performance categories will be weighted as follows for 2020, representing no change from 2019:

• Quality = 45%
• Cost = 15%
• Promoting Interoperability = 25%
• Improvement Activities = 15%

Performance Threshold and Payment Adjustments

Also for the 2020 performance period, the performance threshold will be 45 points, and the exceptional performance threshold would be 85 points, up from 30 and 75 points in 2019. For 2021, the performance threshold will be set at 60 points, and the exceptional performance threshold will remain 85 points. As well, in 2020, the MIPS program will reach the maximum negative payment adjustment of -9 percent, with positive payment adjustments up to a factor of 9 percent, although the budget neutrality mandate could mean an adjustment above or below 9 percent. The payment adjustment percent for 2019 was 7. 

Performance Category Updates

Among the various performance categories, the following updates and changes have been finalized for 2020 and beyond:

• Quality: Remove low-bar, standard of care, process measures, focus on high-priority outcome measures, and add new specialty sets (Speech Language Pathology, Audiology, Clinical Social Work, Chiropractic Medicine, Pulmonology, Nutrition/Dietician, and Endocrinology). Data completeness requirements also would increase to 70 percent for 2020, up from 60 percent in 2019.
• Cost: Add 10 episode-based measures and revise current global measures’ attribution methodologies (TPCC and MSPB Clinician).
• Improvement Activities: New requirement for Improvement Activity credit for groups (at least 50% of MIPS eligible clinicians participate). Also, update measures with the addition of 2 new Improvement Activities, modification of 7 existing Improvement Activities, and removal of 15 existing Improvement Activities.
• Promoting Interoperability: New reweighting standards for hospital-based MIPS eligible clinicians in groups. A group would be identified as hospital-based and eligible for reweighting if more than 75 percent of the NPIs in the group meet the definition of a hospital-based individual MIPS eligible clinician. In previous years, 100 percent had to be hospital-based. Non-patient facing groups (more than 75 percent of the MIPS eligible clinicians in the group are classified as non-patient facing) would automatically have the Promoting Interoperability performance category reweighted.

MIPS Value Pathways

Finally, CMS has approved a new program for MIPS participation called MIPS Value Pathways (MVPs). The program is described as “a conceptual participation framework” that will be in effect for the 2021 performance year. MVPs will help move MIPS “away from siloed activities and measures and … towards an aligned set of measure options more relevant to a clinician’s scope of practice that is meaningful to patient care.”

In effect, the MVP framework will do three things:

• Unite and connect measures and activities across the Quality, Cost, Promoting Interoperability, and Improvement Activities performance categories of MIPS
• Incorporate a set of administrative claims-based quality measures that focus on population health/public health priorities
• Streamline MIPS reporting by limiting the number of required specialty or condition specific measures

“We recognize that this will be a significant shift in the way clinicians may potentially participate in MIPS, therefore we want to work closely with clinicians, patients, specialty societies, third parties and others to establish the MVPs,” CMS said in the final rule. “We want to continue developing the future state of MIPS together with each of you to ensure that we are reducing burden, driving value through meaningful participation, and, most importantly, improving outcomes for patients.”

CMS has created a collection of illustrative diagrams (automatic download from CMS) to help explain the changes that the MVP framework will bring.

For More Information

For more information about the 2020 Medicare Physician Fee Schedule Final Rule and the 2020 Quality Payment Program Final Rule, check out the following resources:

• 2020 Physician Fee Schedule Quality Payment Program Final Rule (CMS 1715-F) (full text)
• 2020 Physician Fee Schedule Quality Payment Program Final Rule Supporting Documents
• CMS’ Finalized Policy, Payment, and Quality Provisions Changes to the Medicare Physician Fee Schedule for Calendar Year 2020 Fact Sheet
• CMS’ 2020 Quality Payment Program Final Rule Overview Fact Sheet (automatic download from CMS)
• Fierce Healthcare’s “CMS finalizes physician fee schedule rule with cuts to physical therapists, psychologists”
• Healthcare Dive’s “Final physician payment rule keeps E/M code changes”

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