Physician Fee Schedule: CMS Proposes 2018 Payment and Policy Updates

July 14, 2017

The Centers for Medicare & Medicaid Services (CMS) has issued their proposed rule that would update Medicare payment and policies for doctors and other clinicians who treat Medicare patients in CY 2018.

The Physician Fee Schedule is updated annually to include changes to payment policies, payment rates, and quality provisions for services furnished to Medicare beneficiaries. This proposed rule would provide greater potential for payment system modernization and seeks public comment on reducing administrative burdens for providing patient care, including visits, care management, and telehealth services.

The rule takes steps to better align incentives and provide clinicians with a smoother transition to the new Merit-based Incentive Payment System (MIPS) under the Quality Payment Program (QPP). The rule encourages fair competition between hospitals and physician practices by promoting greater payment alignment, and it would improve the payment for office-based behavioral health services that are often the therapy and counseling services used to treat opioid addiction and other substance abuse disorders. In addition, the proposed rule makes additional proposals to implement the CMS Innovation’s Medicare Diabetes Prevention Program expanded model starting in 2018.

Comments are due by September 11, 2017. The Society will review the proposed rule closely and make appropriate comments. Stay tuned to Health Policy Advisor for more information.

Brief Summary of Sections Pertinent to Society Members:

2018 Value Modifier

In order to better align incentives and provide a smoother transition to the new MIPS under the QPP, CMS is proposing the following changes to previously-finalized policies for the 2018 Value Modifier:

  • Reducing the automatic downward payment adjustment for not meeting minimum quality reporting requirements from negative four percent to negative two percent (-2.0 percent) for groups of ten or more clinicians; and from negative two percent to negative one percent (-1.0 percent) for physician and non-physician solo practitioners and groups of two to nine clinicians;
  • Holding 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
  • Aligning the maximum upward adjustment amount to 2 times the adjustment factor for all physician groups and solo practitioners.

The reduction in penalties resulting from the value-modifier is one of Society’s’ top priorities. The Society has met individually and a part of a coalition with the Administration to show the inequity in application of the value-modifier. We have asked for a “zeroing” out of the value-modifier penalty. While we welcome the reduction in penalties, we will continue towards removing penalties as a result of the application of the value-modifier.

Care Management Services

CMS is continuing efforts to improve payment within traditional fee-for-service Medicare for chronic care management and similar care management services to accommodate the changing needs of the Medicare patient population. CMS is proposing to adopt Current Procedural Terminology (CPT) codes for CY 2018 for reporting several care management services currently reported using Medicare G-codes. Also, CMS is seeking public comment on ways they might further reduce burden on reporting practitioners for chronic care management and similar services, for example, through stronger alignment between CMS requirements and CPT guidance for existing and potential new codes.

The Society will hold a webinar on July 19 that covers the latest information on CCM codes. Registration is open here.

Improvement of Payment Rates for Office-based Behavioral Health Services

CMS is proposing an improvement in the way rates are set that will positively impact office-based behavioral health services with a patient. The proposed change would increase payment for these services by better recognizing overhead expenses for office-based face-to-face services with a patient.

Evaluation and Management Comment Solicitation

Most physicians and other practitioners bill patient visits to the PFS under a relatively generic set of codes that distinguish level of complexity, site of care, and in some cases whether or not the patient is new or established. These codes are called Evaluation and Management (E/M) visit codes. Billing practitioners must maintain information in the medical record that documents that they have reported the appropriate level of E/M visit code. CMS maintains guidelines that specify the kind of information that is required to support Medicare payment for each level. There are three key components to selecting the appropriate level:

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

CMS agrees with continued feedback from stakeholders that these guidelines are potentially outdated and need to be revised, especially the history and exam components.

CMS is seeking comment from stakeholders on specific changes they should undertake to update the guidelines, to reduce the associated burden, and to better align E/M coding and documentation with the current practice of medicine. CMS is especially seeking comment on how to focus on initial changes to the guidelines for history and exam, because they believe documentation for these elements may be more significantly outdated.

Medicare Telehealth Services

For CY 2018, CMS is proposing to add several codes to the list of telehealth services, including:

  • 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).

Additionally, in this proposed rule, CMS is proposing to eliminate the required reporting of the telehealth modifier for professional claims in an effort to reduce administrative burden for practitioners. CMS is also seeking comment on ways to further expand access to telehealth services within our current statutory authority.

Physician Quality Reporting System (PQRS)

Under the PQRS, individual eligible professionals and group practices who did not satisfactorily report data on quality measures in 2016 are subject to a downward payment adjustment of 2.0 percent in 2018 to their PFS services. The last reporting period for PQRS was 2016. The final data submission timeframe for reporting 2016 PQRS quality data to avoid the 2018 PQRS downward payment adjustment was January through March 2017. PQRS is being replaced by MIPSunder the QPP. The first MIPS performance period is January through December 2017.

CMS is proposing to change the current PQRS program policy that requires reporting of 9 measures across 3 National Quality Strategy domains to only require reporting of 6 measures for the PQRS. CMS is also proposing similar changes to the clinical reporting requirements under the Medicare Electronic Health Record Incentive Program for eligible professionals.

CMS is proposing these changes based on stakeholder feedback and to better align with the MIPS data submission requirements for the quality performance category. For MIPS, eligible clinicians need only report 6 quality measures for the quality performance category, except those reporting via the Web Interface with no requirement to ensure that the measures span across 3 National Quality Strategy domains.

The Society participated in a coalition that is focused on reducing administrative burden including reduction in PQRS penalties for the 2016 reporting period. The Society will continue to work with this coalition to develop comments in reaction to these proposals.

Patient Relationship Codes

In May 2017, CMS posted the operational list of patient relationship categories that are required under MACRA. In this rule, CMS is proposing the use of Level II HCPCS modifiers on claims to indicate these patient relationship categories. Further, CMS is proposing that the HCPCS modifiers may be voluntarily reported by clinicians beginning January 1, 2018. CMS anticipates that there will be a learning curve with respect to the use of these modifiers, and will work with clinicians to ensure their proper use.

Medicare Shared Savings Program Rules

CMS is proposing several modifications to the rules for accountable care organizations (ACOs) participating in the Medicare Shared Savings Program. These proposed modifications are designed to reduce burden and streamline program operations. The proposals include the following:

  • Revisions to the assignment methodology to reflect the requirement under section 17007 of the 21st Century Cures Act (Pub. L. 114-255, December 13, 2016), that for performance years beginning on or after January 1, 2019, the Secretary determine an appropriate method to assign Medicare FFS beneficiaries to an ACO based on their utilization of services furnished by rural health clinics (RHCs) or federally qualified health centers (FQHCs);
  • The addition of three new chronic care management codes (CCM) and behavioral health integration (BHI) codes to the definition of primary care services used in the ACO assignment methodology; and
  • Reduction of burden for stakeholders submitting an initial Shared Savings Program application and the application for use of the skilled nursing facility (SNF) 3-Day Rule Waiver.