CMS Partially Merges 5-Tier Payment Schedule to Address Care for Complex Patients

An initiative to streamline the way physicians document Medicare billing for patient evaluation and management (E/M) was recently resolved and will take effect in the coming year as part of the calendar year (CY) 2019 Physician Fee Schedule final rule, the Centers for Medicare & Medicaid Services (CMS) has announced.¹However, current coding and payment structure for E/M office and outpatient visits will continue for CY 2019 and CY 2020.

“For CYs 2019 and 2020, we are implementing several documentation policies to provide immediate burden reduction, while other changes to documentation, coding, and payment would be implemented in CY 2021,” CMS said in its statement.

The way it currently stands, physicians bill Medicare for patient E/M visits through a 5-tier system, which some argued can be overly burdensome. CMS proposed to do away with 5 levels in place of a blended payment rate for office and outpatient visits billed from levels 2 through 5; however, that brought major pushback from physicians who contended that this would negatively affect their more complicated patients.

CMS responded to these concerns and eased up on the original proposal. Instead of merging tiers 2 through 5, the final rule will merge the first 4 tiers into 1 and preserve level 5 at its existing payment level of $211 per visit to accommodate patients with more complex needs. CMS said it has not yet determined what the pay level will be for the merged lower tiers, which currently range from $76 to $167 per visit.

“The Community Oncology Alliance [COA] commends the Centers for Medicare & Medicaid Services for clearly hearing important concerns of the oncology community and reflecting those in the final Medicare Physician Fee Schedule,” COA said in approval. “CMS Administrator Seema Verma and staff largely listened and responded to feedback.”

The American Hospital Association (AHA), too, was generally pleased with this change. “We also appreciate that the agency responded to our concerns and mitigated its proposal to consolidate evaluation and management codes for providers,” the organization said.

The coding and payment structure for E/M visits will remain for the time being. CMS expects to implement further changes in CY 2019 and beyond in an initiative to reduce documentation burden for physicians. For example, physicians will be able to choose to focus their documentation just on changes since the last visit for established patient office and outpatient visits.

According to the final rule, modifications will also be made to payment for Part B drugs based on wholesale acquisition cost (WAC) rates. A 3% add-on will replace the current 6% add-on for such payments.

CMS believes this will reduce the current financial incentive for physicians to select the most expensive drugs. However, COA contends that the actual add-on rate will effectively be less than half of 3%, given a sequester cut enacted by CMS in 2013 that lowers drug payments even more.

“CMS’ decision to arbitrarily lower payment for the introduction of new cancer drugs to WAC plus 1.35% is seriously misplaced, because it will only fuel manufacturers to increase their list prices (WAC) of expensive drugs,” COA said.

AHA also expressed its disappointment. “We are [concerned] about reductions in payments for certain new drugs—we believe CMS should instead address the skyrocketing list prices of drugs directly with pharmaceutical manufacturers.”

Further updates were made to increase access to technology-based services. Beginning in 2019, separate payments will be made for 2 newly defined physicians’ services using communication technology: brief communication technology-based service (HCPCS code G2012) and remote evaluation of recorded video and/or images submitted by the patient (G2010).

For example, physicians can separately bill Medicare when a patient checks in via telephone or other telecommunication devices to determine the need for an office visit. CMS believes this will increase efficiency for practitioners and convenience for beneficiaries.

CMS will also finalize policies to pay separately for new coding addressing chronic care remote physiologic monitoring (CPT codes 99453, 99454, and 99457) and interprofessional internet consultation (99446, 99447, 99448, 99449, and 99451).

According to CMS, the CY 2019 final rule reflects an “administration-wide strategy to create a healthcare system that results in better accessibility, quality, affordability, empowerment, and innovation.

Reference:

Final policy, payment, and quality provision changes to the Medicare Physician Fee Schedule for calendar year 2019 [press release]. Baltimore, MD: CMS; November 1, 2018. cms.gov/newsroom/fact-sheets/final-policy-payment-and-quality-provisions-changes-medicare-physician-fee-schedule-calendar-year. Accessed November 16, 2018.