November 21, 2018

The Centers for Medicare and Medicaid Services (CMS) has published the 2019 Physician Fee Schedule (PFS) final rule detailing, among other things, changes to the Quality Payment Program for Year 3 (payment year 2021), changes to documentation requirements for E&M services, new policy regarding site-neutrality payment, reductions in the 340B drug pricing program and expanded payment for telehealth services.

Woven throughout the final policy for 2019 are a number of efforts by CMS to streamline documentation requirements and reduce administrative burden for clinicians in keeping with the agency’s Patients Over Paperwork Initiative.

The conversion factor rose slightly from $35.99 to $36.04, representing a 0.25 percent adjustment as mandated by the Bipartisan Budget Act of 2018 as well as a negative 0.14 percent adjustment in keeping with the law’s budget neutrality requirements.

E&M Restructuring

CMS proposed a major restructuring of payment for E&M services for 2019 that included single blended payment rates for new and established patients for level 2 through 5 office and outpatient visits.  Responding to strong pushback from the medical community, including a letter of opposition from 170 medical associations, including the AMA, CMS agreed to delay implementation of the E&M coding and payment reforms until 2021.

However, CMS Administrator Seema Verma noted that physicians would see some immediate changes in E&M documentation requirements in 2019 that reflect the agency’s stated focus on reducing administrative burden, with additional burden reductions coming in 2021, when broader changes to the E&M framework take effect. In the final rule, CMS said it will continue discussing possible refinements in the policy with stakeholders before those changes are finalized.

Quality Payment Program Changes

According to CMS, many of the changes to the QPP for the 2019 performance year (2021 payment year) aim to reduce administrative burden while strengthening the focus on outcome over process measures.

Changes to the QPP for 2019 include:

• Expanding the low-volume threshold criteria and giving clinicians who meet only one of the three criteria the option not to participate in the QPP’s Merit-Based Incentive Payment System (MIPS).  Eligible clinicians (ECs) who bill $90,000 or less in Medicare charges or who see 200 or fewer Medicare patients or bill 200 or fewer covered professional services may opt out of MIPS.
• The opportunity for clinicians or groups to opt-in to MIPS if they meet one or two of the low-volume threshold criteria.
• The removal of 21 MIPS Clinical Quality measures based on the argument that removing the “extremely topped out” measures would help reduce reporting burden “where there is little room for improvement.”
• The requirement for eligible clinicians or groups to achieve 30 or more total MIPS points to avoid a negative payment adjustment of up to 7 percent in payment year 2021.
• An increase in the weight of the MIPS Cost category to 15 percent and reduction in the weight of the Quality category to 45 percent.
• Allowing facility-based clinicians (those who provide 75 percent or more of their covered services in inpatient hospital, on-campus outpatient hospital or emergency room settings) to use the measure set for the Hospital Value-Based Purchasing Program (VBP) for their Quality and Cost scores.

In addition, for the first time in 2019, Medicare will pay physicians for virtual check-ins with patients, virtual consultations with other physicians, evaluation of remote pre-recorded images and video, and an expanded list of telehealth services.

Site-Neutrality Policy

Payment for many services provided in non-excepted off-campus provider-based departments has been made under the PFS based on a percentage of the Outpatient Prospective Payment System payment rate. CMS finalized policy to keep this payment at the current level of 40 percent of the OPPS rate. The change “encourages fairer competition between hospitals and physician practices by promoting greater payment alignment between outpatient care settings,” CMS said.

340B Reductions

Effective January 1, 2019, payments based on wholesale acquisition costs for Medicare Part B drugs, during the first quarter of sales when the average sales price is unavailable, will be subject to a three percent add-on in place of the current six percent add-on. The policy is designed to “help curb excessive spending, especially for new drugs with high launch prices,” according to the agency.

The complete final rule is available here.

A fact sheet on the final rule is available here.

A fact sheet on the Quality Payment Program is available here.