What Physicians Need to Know about the New Medicare Payment Rules

On July 12, the Centers for Medicare & Medicaid Services (CMS) released its proposed Medicare physician payment regulation for 2019 under the headline, “CMS Proposes Historic Changes to Modernize Medicare and Restore the Doctor-Patient Relationship”. A massive 1,473 pages in length, the rule includes proposed updates to the rules governing both the Medicare Physician Fee Schedule and Medicare Access and CHIP Reauthorization Act (MACRA) Quality Payment Program (QPP).

As noted by the CMS headline, many provisions in the rule seek to reduce physician burnout and simplify existing regulatory requirements. However, for physician groups, it can be confusing to assess the impact of these proposals, especially when also trying to make sense of how a 1,500-page government regulation can itself reduce government regulations…

So, in an effort to highlight the need to know impacts and lighten a few summer reading lists, here are my top takeaways from the proposed rule:

• Physicians will receive a 0.13% Medicare fee-for-service (FFS) payment rate increase in 2019. While payment rates for individual Physician Fee Schedule codes may increase or decrease based on a variety of factors, based on previous legislation CMS proposed an across-the-board 0.13% payment rate increase for all codes in 2019. While preferable to a pay cut, this negligible FFS increase will again fail to keep pace with the rising administrative costs of practicing medicine, which in turn will continue to highlight the importance of maximizing value-based reimbursement.
• CMS proposed a fundamental overhaul of the outpatient office visit documentation and payment system. In an effort to reduce excessive documentation requirements, CMS is proposing to allow physicians to choose to document Evaluation & Management (E/M) office visits using time, medical decision-making, or the existing 1995 or 1997 guidelines. Additionally, CMS is proposing to apply a single blended payment rate for new and established patients for outpatient E/M level two through five visits, while only requiring the documentation needed to support a level two visit. As a result, physicians are likely to see reduced documentation requirements, workflow changes, and potentially significant reimbursement increases or decreases depending on specialty.
• CMS proposed new payment for certain types of virtual care services. Included in the rule are proposals to pay separately through new codes for brief (5-10 minute) virtual patient check-ins and the remote evaluation of patient-submitted photos or videos. CMS also proposed to add a code for delivering 30 minutes of “prolonged preventive services” to the list of covered telehealth services. For physicians, while these changes certainly signal CMS’s support for telemedicine, burdensome beneficiary consent and co-pay requirements paired with relatively low reimbursement rates may limit widespread adoption of these codes.
• CMS continues to gradually increase the performance requirements and financial impact of MIPS. In an effort to continue gradually “transitioning” clinicians into the Merit-based Incentive Payment System (MIPS), in 2019 the cost category will account for 15% of the overall MIPS score (up from 10% in 2018), the overall performance threshold will be 30/100 points (up from 15/100 in 2018), and the maximum payment penalty will be -7% (up from -6% in 2018.) While these changes do continue to slowly raise the bar for success in MIPS, high-performing practices will also continue to see limited financial rewards due to the high number of program exemptions and the low performance threshold.

Following the public comment period, CMS is expected to release its final 2019 Medicare physician payment regulation in early November. For NextGen Healthcare clients interested to learn more about these proposals and other critical regulatory changes, please register to attend our annual client user group meeting today: https://ugm.nextgen.com. And for those interested to learn more about CMS’s recent proposal to overhaul its accountable care organization (ACO) program, please register for our September 18 ACO webinar here: https://ng.nextgen.com/aco-webinar-sept18.