Blog Post

New CMS Rules: Updates on Provider-Based Billing, Physician Fee Schedule, and E&M Code Changes

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The Centers for Medicare & Medicaid Services (CMS) finalized key updates to the Medicare Hospital Outpatient Prospective Payment System (OPPS), the Ambulatory Surgical Center Payment System (ASCPS), and the Physician Fee Schedule (PFS) that will be effective January 1, 2019, with additional changes to be implemented in 2021. According to CMS Fact Sheets, primary objectives of the updates include the following:

  • Promoting access to virtual care
  • Improving ease of health information exchange through improved interoperability
  • Updating Quality Payment Program measures to focus on those with meaningful outcomes
  • Updating policies under Medicare’s ACO program to streamline quality measures
  • Updating coding requirements to Evaluation and Management (E&M) codes to reduce administrative burden

Key Updates for 2019

Physician Fee Schedule

  • The requirement to document medical necessity for home visits in lieu of an office visit will be eliminated.
  • For E/M visits, providers will be able to focus their documentation on what has changed since the last visit when relevant information is already documented in the medical record.
  • Providers will not have to reenter information on a patient’s chief complaint and history that has already been entered by a staff member. Instead, providers can indicate that the information has been “reviewed and verified,” according to CMS.
  • The conversion factor that is used to determine payments under Medicare Part B will be adjusted upward slightly for 2019 from 35.99 to 36.05, meaning a slight overall rise in payments to providers who accept Medicare patients.
  • Updated practice expense pricing guidelines have been published. CMS is also finalizing a proposal to phase in the use of these new prices over a four-year period beginning in CY 2019 to ensure a smooth transition.
  • The PFS Relativity Adjustor of 40% for payments to non-excepted off-campus provider-based hospital departments will remain the same.
  • Medicare will pay providers for new communication technology–based services, such as brief check-ins between patients and practitioners, and pay separately for evaluation of remote prerecorded images and/or video. CMS is also expanding the list of Medicare-covered telehealth services.

Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Payment System (ASCPS)

  • Through a two-year phase starting in 2019, a Physician Fee Schedule (PFS)-equivalent payment rate for the clinic visit service will be applied when provided at an off-campus provider-based department that is paid under the OPPS. CMS anticipates this will result in lower copayments for patients and reduced payments for facilities.
  • Key measures from the Hospital Outpatient Quality Reporting Program and the Ambulatory Surgical Center Quality Reporting Program will be removed to focus on more meaningful measures.
  • OPPS payment rates will increase by 1.35%.

Beginning in 2021, CMS will implement additional payment, coding, and other documentation changes. Payment for E/M office/outpatient visits will be simplified, and payment would vary primarily based on attributes that do not require separate, complex documentation. Key updates include the following:

  • CMS will collapse Evaluation and Management (E/M) payment rates 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 the payment rate for visit level 5 in order to better account for the care and needs of complex patients.
  • Practitioners will be permitted to choose to document E/M office/outpatient level 2 through 5 visits using medical decision-making or time instead of applying the current 1995 or 1997 E/M documentation guidelines. Alternatively practitioners could continue using the current framework.
  • Add-on codes will be implemented that describe the additional resources inherent in visits for primary care and particular kinds of nonprocedural specialized medical care, though they would not be restricted by physician specialty. These codes would only be reportable with E/M office/outpatient level 2 through 4 visits, and their use generally would not impose new per visit documentation requirements.
  • A new “extended visit” add-on code will be adopted 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.

According to CMS Administrator Seema Verma, “Today’s rule offers immediate relief from onerous requirements that contribute to burnout in the medical profession and detract from patient care. It also delays even more significant changes to give clinicians the time they need for implementation and provides time for us to continue to work with the medical community on this effort.”