CMS recently issued its proposed changes to the 2019 Medicare Physician Fee Schedule, which include a controversial change to the reimbursement rates for Level 2-5 evaluation and management (E/M) services and some notable changes to the Quality Payment Program.  This post highlights some key aspects of the Proposed Rule that will affect medical practices.

Red stethoscope with a pile of hundred dollar bills.CMS views the Rule as one of “several proposed rules that reflect a broader Administration-wide strategy to create a healthcare system that results in better accessibility, quality, affordability, empowerment and innovation.”  Once finalized after public comment, the changes will be effective for calendar year 2019.

Notable Changes to the Medicare Physician Fee Schedule

Consolidation of Level 2-5 E/M Visits.  Probably the most significant change proposed to the Physician Fee Schedule in 2019, and the most controversial, is the consolidation of the reimbursement rates for Level 2 through 5 E/M visits into one flat base rate for new patients and one flat base rate for established patients.  The consolidated reimbursement rate for Level 4 and 5 visits would be approximately $50-75 less for new patients; and approximately $16-32 less for established patients.  For Level 2 and 3 visits, the consolidated rate would be substantially more.  CMS has also provided for a number of potential modifiers to account for additional time spent, and visits related to certain specialties, such as oncology.

However, the proposed change has drawn significant criticism because a visit for a minor health issue (such as an earache) would be reimbursed at the same base rate as a visit for stage IV cancer.  Further, the American College of Physicians has recently stated that the proposed rate model would result in lesser reimbursement for Level 4 and 5 visits overall, even considering the new modifiers.

Revised Documentation Requirements. In connection with the newly consolidated rates, CMS has proposed to streamline the documentation that physicians must provide for reimbursement for E/M visits.  The purpose of these proposals, and others which CMS says it plans to make in future years, is to allow physicians more flexibility to exercise clinical judgment in documentation.  The documentation changes:

  • Would allow physicians to document E/M visits based on medical decision-making and/or time, regardless of whether counseling or care coordination dominates the visit.
  • Would not require physicians to re-document information from prior visits, only what has changed for the patient (or what pertinent items have not changed) since the last visit.
  • Would be able to review and verify certain basic information entered into the medical record by physician extenders and other ancillary staff, instead of having to re-enter the information every time.

These revised documentation requirements are intended to lead to a lesser administrative burden on physicians, which could lead to fewer audit issues and overpayments.  In that regard, the proposal is seen by some as a trade, by which CMS relieved physicians and their practices of cumbersome documentation requirements in exchange for reduced reimbursement for level 4 and 5 E/M codes.  We expect that CMS will receive substantial commentary on these documentation and rate changes in advance of the Final Rule.

Additional Changes.  Other notable changes are as follows:

  • Medicare would pay for a virtual check-in service for which the physician would check-in with a patient by phone or other device to decide whether an office visit or other service is needed.  CMS believes that this will increase efficiency for practitioners and convenience for beneficiaries.
  • Medicare would pay for a Remote Evaluation service based on recorded video or images, so that a physician could be separately paid for reviewing a patient-transmitted photo or video to assess whether a visit is needed.
  • CMS will implement updated medical supply and equipment prices for purposes of determining the practice expense portion of its reimbursement rates.  The rates for supplies and equipment used in their payment formula had not been updated since 2005.  Based on a study conducted by a contractor, CMS will implement the new rates over a 4-year period beginning in 2019.
  • CMS plans to increase the overall reimbursement rate per RVU by $0.06.

Changes to the Quality Payment Program

Beginning with the 2019 calendar year, physicians and practices will be paid under Medicare Part B based on the standard rate for reimbursement for the service, plus or minus a bonus or penalty calculated on their performance under the Quality Payment Program during the 2017 calendar year.  For more information on the Quality Payment Program, please see our prior blog post here: https://physicianlaw.foxrothschild.com/2016/12/articles/medicare/are-you-ready-for-the-new-medicare-quality-payment-program-part-2-basics-of-the-mips-and-how-to-qualify-in-2017/.

In the face of doubts regarding the future of the Quality Payment Program and the Merit-based Incentive Payment System (MIPS), CMS is making substantial efforts to encourage participation of physicians.   A number of changes are focused specifically on making participation easier for small practices, including applying the existing small practice bonus to the Quality category (instead of overall score) and providing for an additional small practice bonus for meeting certain quality measures.  CMS has also proposed that small practices meeting certain requirements have the ability to opt-in to the MIPS, as opposed to being required to participate.  In addition, CMS continues to remind all practices that it offers free consulting services from its technical assistance network for any physician seeking to meet the MIPS requirements.

Practices should also note that CMS has proposed to require physical therapists, occupational therapists, social workers and clinical psychologists enrolled in Medicare to participate in the MIPS beginning in 2019.

With respect to scoring under the MIPS, CMS proposed to remove certain quality measures which physicians have complained are of low priority in their practice.  CMS also proposed a new scoring system for the EHR Incentive Program category, and proposed to change the title of the category from “Advancing Care Information” to “Promoting Interoperability.”  The change in name reflects CMS’s emphasis on increasing accessibility of health information to patients and their providers.  The new scoring system also matches up with the newly proposed Promoting Interoperability EHR incentive program for hospitals.

Finally, CMS proposed modifying the overall scoring weights for the MIPS during 2019 as follows:

  • Quality (45%)
  • Promoting Interoperability (25%)
  • Improvement Activities (15%)
  • Cost (15%)

…and increasing the bonuses and penalties from +5%/-5% to +7%/-7%.

 

Critics of the MIPS say that efforts to minimize penalties in the hopes of encouraging participation put the entire program at risk, as the MIPS is required by law to be budget-neutral.  When the penalties are reduced, so are the bonuses.  This is probably the biggest threat to the viability of the MIPS long-term.  However, the proposed changes show that CMS is committed to making the MIPS easier to comply with, even though it is still a complicated program.  Stay tuned to Fox Rothschild’s Physician Law Blog for an update on the Final Rule, once issued this Fall.

Under CMS’s new Quality Payment Program, which will adjust Medicare Part B payments starting in 2019 based on data from this year, physicians and other eligible clinicians must qualify for one of two payment “tracks”, either the Merit-Based Incentive System (MIPS) or the Advanced Alternative Payment Model (Advanced APM) track.   A physician who qualifies under the MIPS in 2017 can earn up to a 4% payment adjustment to Medicare Part B payments in 2019.  Physicians who qualify under the Advanced APM track can earn up to a 5% payment adjustment in 2019.  For more information on the Quality Payment Program and the MIPS, please see our prior blog post on the topic here.

Since the Quality Payment Program went into effect on January 1, 2017, it has been unclear whether physicians participating in an Advanced APM in 2017 would be able to meet CMS’ quality and reporting requirements and earn a 5% payment adjustment to their Medicare Part B claims in 2019.

CMS recently provided clarity on this issue by predicting that almost 100% of physicians and other eligible clinicians participating in Advanced APMs in 2017 will qualify for a 5% payment adjustment to their Medicare Part B claims in 2019.  CMS based this prediction on an analysis of Advanced APM claims data submitted from January through August 2016 (before the Quality Payment Program went into effect).

CMS also stated that physicians who participate in an Advanced APM need to meet only one of two criteria to earn the 5% payment adjustment in 2019:  (1) receive 25% of the physician’s Medicare Part B payments through the Advanced APM; or (2) see 20% of the physician’s Medicare patients through the Advanced APM.  [A list of Advanced APMs in which a physician may participate in 2017 can be found at the following link: CMS List of Advanced APMs]

Participating in an Advanced APM can have several benefits (including being exempt from reporting quality data under the MIPS payment track), but also involves taking on some risk.  If you are considering participation in an Advanced APM, please contact an experienced attorney to discuss.

CMS is expected to issue formal determinations regarding the qualification of particular physicians for the Advanced APM track later this year.  Stay tuned to Fox Rothschild’s Physician Law Blog for updates.

You may have heard that a transformation of Medicare’s physician payment program is in the works.  However, you may not know that the structure of the new program, called the “Quality Payment Program”, has been finalized and will begin its first reporting year on January 1, 2017.  Now is the time for you and your practice to get up to speed on the new Quality Payment Program.  This post is the first in a new Blog Series that we will be publishing on Fox Rothschild’s Physician Law Blog to help you and your practice prepare for Medicare’s Quality Payment Program.

In October, the Centers for Medicare and Medicaid Services (CMS) issued a Final Rule setting forth the structure of the Quality Payment Program and the parameters for its first year of operation.  The purpose of the Quality Payment Program is to create one central program that will govern Medicare Part B payments to physicians, while incentivizing physicians to increase quality of care and decrease inefficiencies in the cost of care for Medicare patients.  The Quality Payment Program will consolidate the existing Medicare incentive programs (which include the Electronic Health Records (EHR) Meaningful Use Incentive Program, the Physician Quality Reporting System (PQRS), and the Physician Value-Based Modifier Program), along with a new program incentivizing clinical improvement activities, into a single payment program that will either reward or penalize physicians by adjusting their reimbursement rates under the Medicare Physician Fee Schedule.

In each reporting year under the Program, physicians will be required to qualify for one of two (2) payment tracks:  (1) the Merit-Based Incentive Payment System (MIPS); or (2) the Advanced Alternate Payment Model (Advanced APM) model.  The MIPS is the default payment track, and will be the track used by most physicians over the next five years.  Qualification for the Advanced APM model requires participation in a CMS-approved Advanced APM.  The long-term goal of CMS is for most physicians and practices to participate in Advanced APMs.

While calendar year 2017 will be the first reporting year under the Quality Payment Program, payment adjustments for physician performance in 2017 will not be made until the 2019 calendar year.  This two-year gap between reporting and payment adjustment has been carried over from the existing incentive programs and may eventually be shortened.  However, for now, the gap will allow a smoother transition from Medicare existing incentive programs, which have collected data over the last two years for incentive payments in 2017 and 2018, respectively.  To be clear, incentive payments based on data reported under existing incentive programs in 2015 and 2016 will still be made.

The good news is that CMS has eased the reporting requirements for the first year of the Program.  For example, no physician will be required to begin collecting data in accordance with the Program’s requirements on January 1, 2017.  To receive a neutral or positive adjustment to reimbursements in 2019, physicians will need to report data and perform certain practice activities for a 90-day performance period during the year.

Stay tuned to the Physician Law Blog for upcoming posts on what you and your practice need to know about the Quality Payment Program (QPP).  The next posts in the QPP Blog Series will be:

  1. Basics of the MIPS and How to Qualify in 2017
  2. Basics of Advanced APMs and How to Qualify in 2017
  3. Details of the MIPS Scoring System

In the interim, if you would like to learn more about the QPP, we encourage you to check out the excellent website CMS has developed on the QPP, which can be found at this link:  https://qpp.cms.gov

As always, if you have questions regarding the applicability of the QPP to you and your practice, we advise you to consult with a knowledgeable attorney.