CMS Issues CY 2019 Medicare Physician Fee Schedule Final Rule

November 8, 2018
Policy Snapshot

On November 1, 2018, the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2019 Medicare Physician Fee Schedule (PFS) final rule, which will take effect January 1, 2019. The final rule updates Medicare Part B payment policies, payment rates, and quality provisions for services under the Medicare PFS. This is the same fee schedule used to pay for Medicare Part B therapy services in nursing facilities. The final 2019 PFS conversion factor is $36.0391, a slight increase above the CY 2018 PFS conversion factor of $35.77510.

Here are how the nursing home codes will be affected in 2019:


Total 2019

2019 Payment Rate

Total 2018

2018 Payment Rate

Percentage Change






























































%= (new-old)/old


Key items from the final rule include the following:

Streamlining Evaluation and Management (E&M) Payment and Reducing Clinician Burden Begins in 2021

CMS is finalizing a significant reduction in the current payment variation in office/outpatient E/M visit levels by paying a single rate for E/M office/outpatient visit levels 2, 3, and 4 (one for established and another for new patients) beginning in 2021. However, CMS is not finalizing the inclusion of E/M office/outpatient level 5 visits in the single payment rate, to better account for the care and needs of particularly complex patients

Also, after consideration of public comments, CMS is not finalizing aspects of their proposal that would have reduced payment when E/M office/outpatient visits are furnished on the same day as procedures, established separate podiatric E/M visit codes, or standardized the allocation of PE RVUs for the codes that describe these services. They are finalizing a policy for 2021 to adopt add-on codes that describe the additional resources inherent in visits for primary care and particular kinds of specialized medical care. These codes will only be reportable with E/M office/outpatient level 2 through 4 visits, and their use generally will not impose new per-visit documentation requirements. These codes are neither required nor restricted by physician specialty, though CMS acknowledges that, like many other physicians’ services for which payment is made under the PFS, they are specifically intended to describe services that clinicians practicing in some specialties are more likely to perform than those in other specialties. CMS is also finalizing a policy for 2021 to adopt 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.

For CY 2019 and 2020, CMS will continue the current coding and payment structure for E/M office/outpatient visits; therefore, practitioners should continue to use either the 1995 or 1997 versions of the E/M guidelines to document E/M office/outpatient visits billed to Medicare for 2019 and 2020.

Beginning in 2021, for E/M office/outpatient levels 2 through 5 visits, CMS will allow for flexibility in how visit levels are documented, specifically a choice to use the current framework, MDM or time. For E/M office/outpatient level 2 through 4 visits, beginning in 2021 CMS will also apply a minimum supporting documentation standard associated with level 2 visits when practitioners use the current framework or MDM to document the visit.

CMS intends to engage in further discussions with the public over the next several years topotentially further refine the policies, through future notice and comment rulemaking, for 2021.

Facility-Based Measurement in the Post-Acute Care Setting

CMS initiated the process of facility-based measurement focusing on the inpatient hospital setting, but has noted in the past the policy goal of expanding the concept into other facilities and programs and, in particular, to use the post-acute care (PAC) and the end-stage renal disease (ESRD) settings as the basis for facility-based measurement and scoring. In the proposed rule, CMS summarized a number of issues and topics related to the use of PAC and ESRD facilities and solicited comment on these topics. In the final rule CMS noted that lots of comments were received and will consider them in a future rulemaking.

Finalized New Skilled Nursing Facility Specialty Measure Set

CMS finalized a new quality measure specialty set for Skilled Nursing Facilities (SNF) for the 2019 Performance Period and future years with the exception of the newly proposed composite measure: Falls: Screening, Risk-Assessment, and Plan of Care to Prevent Future Falls. CMS is no longer finalizing the inclusion of the composite falls measure because it must be fully vetted to utilize standardized tools that would appropriately identify the at-risk patient population. However, based on comments, CMS is finalizing the individual measures Q154: Falls: Risk Assessment and Q155: Falls: Plan of Care as additional measures in this measure set. Click here  to view full measure set.

Telehealth Services

CMS continues to limit the subsequent nursing facility care services (CPT codes 99307-99310) furnished through telehealth to once every 30 days. CMS says that since these codes are used to report care for patients with a variety of diagnoses, including psychiatric diagnoses, they do not think it would be appropriate to remove the frequency limitation only for certain diagnoses. They say that the services described by these CPT codes are essentially the same service, regardless of the patient’s diagnosis. CMS also continue to have concerns regarding the potential acuity and complexity of SNF inpatients, and therefore, they did not propose to remove the frequency limitation for subsequent nursing facility care services in CY 2019.

Discontinue Functional Status Reporting Requirements for Outpatient Therapy

The data from the functional reporting system was to be used to aid CMS in recommending changes and reforming of Medicare payment for outpatient therapy services that were subject to the statutory therapy caps. Going forward, the functional status reporting data that would be collected may be even less purposeful because the Bipartisan Budget Act of 2018 repealed the therapy caps while imposing protections to ensure therapy services are furnished when appropriate. As a result, CMS is finalizing their proposal to discontinue the functional status reporting requirements for services furnished on or after January 1, 2019.

Medicare Shared Savings Program Accountable Care Organizations (ACOs)

This final rule also addresses a subset of changes to the Medicare Shared Savings Program for ACOs proposed in August 2018. CMS is finalizing the following policies:

  • A voluntary six-month extension for existing ACOs whose participation agreements expire on December 31, 2018, and the methodology for determining financial and quality performance for this six-month performance year from January 1, 2019, through June 30, 2019.
  • Allowing beneficiaries who voluntarily align to a nurse practitioner, physician assistant, certified nurse specialist, or a physician with a specialty not used in assignment to be prospectively assigned to an ACO if the clinician they align with is participating in an ACO.
  • Revising the definition of primary care services used in beneficiary assignment.
  • Providing relief for ACOs and their clinicians impacted by extreme and uncontrollable circumstances in 2018 and subsequent years.
  • Reducing the Shared Savings Program core quality measure set by eight measures, and promoting interoperability among ACO providers and suppliers by adding a new CEHRT threshold criterion to determine ACOs’ eligibility for program participation and retiring the current Shared Savings Program quality measure on the percentage of eligible clinicians using CEHRT.

 CMS will hold two webinars to review the final rule. The first, Quality Payment Program Year 3 Final Rule Overview Webinar, will be on Thursday, November 15, at 12 PM ET.

The next webinar, Physician Fee Schedule Final Rule: Understanding 3 Key Topics Call, will be on Monday, November 19, from 2 to 3:30 PM ET

The Society will review the final rule and submit comments as needed. Click here to read the comments the Society submitted on the proposed rule.