Industry News

CMS Issues Medicare Physician Fee Schedule Final Rule

The Centers for Medicare & Medicaid Services (CMS) published the final policy, payment, and quality provisions changes to the Medicare Physician Fee Schedule (PFS) in a Final Rule and Interim Final Rule for calendar year (CY) 2019 (Final Rule) on November 23, 2018.  The Final Rule includes changes to the PFS and other Medicare Part B payment policies and revises certain Medicare Shared Savings Program policies. The Interim Final Rule addresses changes to the Medicare telehealth provisions in the Social Security Act (the Act).  Generally, the Final Rule updates apply to services furnished under the PFS on or after January 1, 2019.  CMS stated that the Final Rule aims to create a health care system that leads to better accessibility, quality, affordability, empowerment, and innovation.

Key provisions of the Final Rule include:

Physician payment update

  • The CY 2019 PFS includes a conversion factor of $36.04, which reflects an update of 0.11%.

E/M payment updates 

  • CMS will continue to use the current coding and payment structure, and practitioners should continue to use the 1995 or 1997 E/M documentation guidelines, for E/M office/outpatient visits in CYs 2019 and 2020.
  • CMS is changing E/M documentation guidelines for CY 2019 and beyond by:
  • Eliminating the requirement to document the medical necessity for a home visit in lieu of an office visit;
  • Eliminating the requirement that practitioners re-record elements of the history and physical exam, if there is evidence that the information has been reviewed and updated. Clarifying that for new and established E/M office/outpatient visits, practitioners need only document that they reviewed and verified information regarding the chief complaint and history that was recorded by ancillary staff or the beneficiary; and
  • Removing requirements for notations in medical records that may be duplicative of resident or other medical team member notations that are already included in medical records for E/M visits furnished by teaching physicians.
  • CMS is finalizing the following policies for CY 2021 and beyond:
  • Payment of a new, single payment rate for new and established patients for office/outpatient E/M visit levels 2 through 4;
  • The option for practitioners to document office/outpatient E/M visits using their preference of medical decision-making, time, or the 1995 or 1997 documentation guidelines for E/M office/outpatient visit levels 2 through 5:
    • CMS will require information to support a level 2 E/M office/outpatient code for history, exam, and/or medical decision making, if the practitioner chooses to use medical decision-making or the current E/M documentation guidelines;
    • CMS will require the practitioner to document the medical necessity of the visit and that they personally spent the required amount of face-to-face time with the beneficiary, if a practitioner chooses to use time-based documentation guidelines;
  • Implementation of a series of add-on codes to reflect the additional resources involved in furnishing primary care and particular kinds of non-procedural specialized medical care. These codes would not be restricted by physician specialty, would only be reportable for E/M office/outpatient visit levels 2 through 4, and would generally not impose new per-visit documentation requirements; and
  • Adoption of a new “extended visit” add-on code. This code would only apply to E/M office/outpatient visit levels 2 through 4, to account for the additional resources applied to patients who require extended time with a practitioner.
  • CMS notes that it will engage with the public to further refine these policies for CY 2021.

Communication technology-based services updates

  • CMS will pay separately for two newly-defined physicians’ services that physicians can use to assess if an office visit is required:
  • Brief communication technology-based services, i.e., face-to-face check-in via telephone or other telecommunications device (HCPCS code G2012); and
  • Remote evaluation of recorded video and/or images submitted by an established patient (HCPCS code G2010).
    • The Final Rule also establishes separate payment for new codes that describes chronic care remote physiologic monitoring and interprofessional internet consultation.

Telehealth service expansion for opioid and other Substance Use Disorder treatment

  • CMS is implementing a provision from the Substance-Use Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act, through an interim final rule with comment period. The provision removes the originating site geographic requirements and adds an individual’s home as a permissible originating site for telehealth services furnished to treat a substance use disorder or a co-occurring mental health disorder.  These requirements will apply to services furnished on or after July 2019.
  • CMS is also soliciting comments regarding services furnished by Opioid Treatment Programs (OTPs), payments for such services, and additional Medicare condidtions for participation.

Practice flexibility for Radiology Assistants

  • CMS will allow certain Radiology Assistants (RAs) to perform diagnostic tests under a direct level of physician supervision, rather than a personal level of physician, when performed in accordance with state law and scope of practice regulations.

Outpatient therapy functional status reporting requirements

  • CMS will no longer require outpatient therapy service providers to include functional status information on claims for therapy services furnished on or after January 1, 2019.
  • The Final Rule will retain the non-payable HCPCS G-codes until CY 2020 to allow for provider and private insurer billing system and policy updates.

Outpatient services furnished by physical therapy and occupational therapy assistants

  • CMS will establish two new therapy modifiers for services that a Physical Therapy Assistant (PTA) or Occupational Therapy Assistant (OTA) furnishes, in whole or in part. The modifiers are “payment” rather than “therapy” modifiers, and CMS will require their use alongside current PT and OT modifiers for claims beginning on January 1, 2020.
  • CMS will apply a de minimis standard for these services, under which the PTA or OTA must furnish more than 10 percent.

Practice expense update

  • CMS is updating the direct practice expense (PE) input prices for supplies and equipment and will transition to using these new prices over a four-year period, beginning in CY 2019.
  • That Final Rule also refines prices for particular items based on comments from the proposed rule.

Non-excepted off-campus provider-based hospital department payment rate updates

  • CMS will maintain the Relativity Adjuster for non-excepted items and services provided by off-campus hospital outpatient provider-based departments (PBDs) at 40 percent of the OPPS rate. The PFS Relativity Adjuster reflects the overall relativity of the applicable payment rate for non-excepted items and services furnished in non-excepted off-campus PBDs under the PFS, compared with the rate under the OPPS.

Medicare telehealth services updates

  • CMS will consider mobile stroke units as originating sites.
  • The agency will not apply originating site or geographic requirements for telehealth services furnished for purposes of diagnosis, evaluation, or treatment of symptoms of acute stroke.
  • Additionally, CMS is adding HCPCS codes G0513 and G0514 for prolonged preventative services to the list of telehealth services for CY 2019.
  • CMS is also implementing telehealth services requirements related to beneficiaries with end-stage renal disease (ESRD) that receive home dialysis, and beneficiaries with acute stroke, effective January 1, 2019. The Final Rule also adds renal dialysis facilities and ESRD beneficiary homes as originating sites.
  • Finally, CMS will not apply the geographic requirements for telehealth services for the monthly ESRD-related clinical assessments where the originating site is a hospital-based or critical access hospital-based renal dialysis center, a renal dialysis facility, or the home of an individual furnished on or after January 1, 2019.

Clinical laboratory fee schedule updates

  • CMS is changing the way Medicare payments are addressed in the definition of an “applicable laboratory”; as such, laboratories that serve Medicare Part C beneficiaries may qualify as applicable laboratories that report data to CMS.
  • The Final Rule also amends the definition of an applicable laboratory to include hospital laboratories that bill for their non-patient laboratory services on the CMS 1450 14X Type of Bill (TOB).

Ambulance fee schedule payment updates

  • The Final Rule revises regulations to conform with the Bipartisan Budget Act of 2018 (BBA) provisions that extend the temporary add-on payments for ground ambulance services through December 31, 2022.
  • CMS also revised applicable regulations to increase payment reduction by 13 percent to 23 percent, for non-emergency basic life support transports for ESRD beneficiaries receiving renal dialysis services. These revisions are in effect for services on or after October 31, 2018, and must be furnished other than on an emergency basis by a service provider or a renal dialysis facility.

Communication technology-based services for rural health clinics and federally qualified health centers

  • CMS will make Rural Health Clinic (RHC) and Federally Qualified Health Centers (FQHC) payments for communication technology-based and remote evaluation services furnished by a RHC or FQHC practitioner when there is no associated billable visit. The services will be payable for medical discussions or remote evaluations of conditions not related to a RHC or FQHC service provided within the previous seven days and when the service does not lead to a RHC or FQHC visit within the next 24 hours or at the soonest available appointment.  CMS will set payment at the average of the PFS national non-facility payment rates for communication technology-based services and remote evaluation services.

Wholesale acquisition cost-based payment for Part B drugs

  • Effective January 1, 2019, CMS will reduce the 6 percent add-on for Wholesale Acquisition Cost (WAC) based Medicare Part B drug payments to 3 percent during the first quarter of sales when Average Sales Price data is unavailable.
  • CMS will also update manual provisions to permit Medicare Administrative Contractors to use an add-on percentage of up to 3 percent when utilizing WAC for new drug pricing, instead of 6 percent. These policies will only apply to WAC-based payment for new Part B drugs.

Medicare Shared Savings Program Accountable Care Organization (ACO) changes

  • CMS is finalizing policies that implement time-sensitive policy changes for currently participating ACOs, ensure continuity in participation, and streamline the ACO core quality measure set.

Appropriate use criteria for advanced diagnostic imaging

  • CMS is revising the significant hardship criteria for the Appropriate Use Criteria (AUC) program. These criteria will now include insufficient internet access, electronic health record (EHR) or clinical decision support mechanism (CDSM) vendor issues, or extreme and uncontrollable circumstances.
  • For ordering professionals experiencing a significant hardship, CMS will allow self-attestation regarding their hardship status.
  • Additionally, CMS is adding independent diagnostic testing facilities (IDTFs) to the definition of an applicable setting under the AUC program to apply the program more consistently in the outpatient setting.
  • Finally, CMS is allowing clinical staff to perform AUC consultations under the direction of the ordering professional.

The Final Rule is available at: