Washington Report – July 2018

(Covers activity between 6/1/18 and 6/30/18)

CMS Releases 2019 Medicare Physician Fee Schedule Proposed Rule

  • The proposed rule includes small increase to the PFS Conversion
  • CMS proposes significant changes to E/M coding, documentation and
  • GR Committee will submit Comments to CMS on this proposed

On July 12th, the Centers for Medicare and Medicaid Services released the 2019 Medicare Physician Fee Schedule proposed rule (PFS). This annual regulation proposes changes to Medicare Part B reimbursements for services covered under this and other outpatient payment methodologies.

The HBMA Government Relations Committee is completing its analysis of the 1,400 page document and intends to provide comments to CMS by the September 10th submission deadline. HBMA Members are encouraged to provide feedback to the GR Committee on what topics HBMA should comment on and suggestions for what position HBMA should take on those topics. Members can email feedback to gr@hbma.org. CMS will review the comments it receives and issue a final version of this rule which is expected to be released in November.

The proposed 2019 PFS conversion factor (CF) is $36.05, a slight increase above the 2018 PFS conversion factor of $35.99.

To determine payment rates for Medicare services, CMS assigns Relative Value Units (RVU) based on time, overhead and malpractice costs for each service. CMS then multiplies the service’s RVUs by the CF to determine its reimbursement. Changes to RVUs must be budget neutral meaning any increases to a service’s RVUs must be offset by RVU reductions to other services.

The 2019 PFS proposed rule summarizes the estimated net effect of RVU changes for every medical specialty. According to this summary, there is more volatility in RVU changes  compared to recent years. However, CMS estimates that no specialty will experience a net increase or decrease greater than five percent, up or down, in 2019. Most specialties will see a net adjustment within two percent, up or down. The full list of the estimated changes in RVUs by specialty can be viewed in Table 94 of the proposed rule.

Perhaps the most significant policy change CMS is proposing involves the Evaluation and Management (E/M) billing requirements. One of these proposed changes is to allow providers to base E/M coding determinations on either medical decision-making or time in addition to the current E/M coding guidelines from 1995 and 1997.

CMS is also proposing to pay a single rate for E/M visit levels 2 through 5. CMS believes this will reduce burden on providers by curtailing the amount of work it takes to document what is sometimes a subjective determination for what is the correct visit level and preventing the need for subsequent audits.

If the standardized E/M reimbursement was in place in 2018, E/M levels 2 through 5 would be paid at $135 for new patients and $93 for established patients.

CMS is also proposing to pay separately for two newly defined physician services furnished using communication technology. These codes are intended to reimburse clinicians for communicating with a patient electronically to determine if an in-person visit is necessary. Additionally, CMS is proposing to add HCPCS codes G0513 and G0514 (Prolonged preventive service(s)) to the list of covered telehealth services.

After Congress required CMS to begin requiring the furnishing professional to document that the ordering professional consulted applicable Appropriate Use Criteria (AUC) using a qualified Clinical Decision Support Mechanism (CDSM), CMS has delayed the implementation for several years.

The 2018 PFS final rule pushed the start date back to January 1, 2020, with a voluntary reporting period beginning July, 2018. The 2018 PFS final rule also made 2020 a testing and education year meaning that CMS will not deny claims that fail to document AUC/CDSM consultation in 2020. The 2019 PFS proposed rule reaffirms this timeline. CMS will not begin to deny claims for failure to document AUC consultation until January 1, 2021.

Congress required that AUC/CDSM consultation be documented on the claim form but gave CMS authority for implementing the documentation requirements. In the proposed rule, CMS is clarifying that it will require AUC consultation to be reported on all claims for an applicable imaging service as opposed to just practitioner claims.

Further, CMS has been debating whether to require this information be documented on the claim form using G-codes and modifiers or using a unique consultation identifier (UCI). In the 2018 PFS final rule, CMS did not make a determination but stated that it was leaning towards UCI over G-codes. However, CMS has changed its mind and is now proposing to use G-codes and modifiers for reporting AUC/CDSM consultation.

Although this policy is limited in scope to advanced imaging services, many stakeholders believe that CMS could expand AUC consultation requirements to other services in the future.

CMS also is proposing changes to how it implements a site-neutral payment adjustment to certain hospital off-campus facilities. Congress required CMS to discontinue allowing newly established off-campus PBDs to be reimbursed under the Hospital Outpatient Prospective Payment System (OPPS). This is because they believed that many health systems were taking advantage of the generally higher reimbursement rates under the OPPS by acquiring physician practices that billed under the PFS and converting them to off-campus PBDs.

The law mandates that these off-campus HOPDs should be reimbursed for services using the PFS rates. However, because off-campus PBDs must bill Medicare under the OPPS (they are prohibited from billing on the PFS), CMS must create a mechanism to convert the OPPS payment to an amount roughly equivalent to what Medicare would have paid if the HOPD were able to bill using the PFS.

To convert the OPPS rate to the PFS rate, CMS developed a “relativity adjuster” to adjust the OPPS rate down to the applicable PFS rate. CMS set the relativity adjuster at 50 percent of the OPPS rate for 2017 and 40 percent of the OPPS rate in 2018. CMS is proposing to maintain the 40 percent relativity adjuster in 2019.

CMS will host a listening session on the proposed rule on August 22nd that will cover three key topics from the proposed rule:

  • Streamlining Evaluation and Management (E/M) payment and reducing clinician
  • Advancing virtual
  • Continuing to improve the Quality Payment Program to reduce clinician burden, focus on outcomes, and promote

Administration Proposes Major Changes to Evaluation and Management Coding

  • CMS is proposing to pay a standard reimbursement rate for E/M levels 2 through
  • CMS is also proposing many changes to the documentation requirements for E/M
  • CMS would also apply a 50 percent MPPR reduction for certain E/M

Perhaps the most significant proposal in the 2019 Medicare Physician Fee Schedule (PFS) proposed rule is the Administration’s plan to change the documentation requirements and payment structure for Evaluation and Management (E/M) codes performed in office or outpatient settings. Specifically, the proposal would simplify the documentation requirements and consolidate the five E/M codes into two levels with an add-on payment for certain specialties.

The Centers for Medicare and Medicaid Services (CMS) intends for these proposed changes to take effect on January 1, 2019, but is also considering delaying implementation until January 1, 2020, to allow industry time to prepare for compliance.

In the 2018 PFS proposed rule, CMS sought public recommendations for how it could update the 1995 and 1997 E/M coding guidelines that are used to justify and document the appropriate E/M code for a visit. CMS ultimately did not adopt any changes to the E/M coding guidelines or billing requirements in the final rule, instead stating that it would spend the year studying the various recommendations from stakeholders about revisiting the coding guidelines.

CMS’ proposal in the 2019 PFS was rather unexpected in that CMS had not discussed proposing such drastic changes in previous regulations. It was especially surprising to read that CMS is proposing to pay a single rate for E/M visit levels 2 through 5.

CMS believes this will reduce burden on providers by curtailing the amount of work it takes to document what is sometimes a subjective determination for what is the correct visit level and preventing the need for subsequent audits. CMS also believes this will eliminate the “increasingly outdated distinction between the kinds of visits that are reflected in the current CPT code levels.”

CMS modeled this proposal based on the 2018 Medicare PFS Conversion Factor. If the proposed E/M reimbursement methodology was in place in 2018, E/M levels 2 through 5 would be paid at $135 for new patients and $93 for established patients.

TABLE 19: Preliminary Comparison of Payment Rates for Office Visits New Patients

CPT Code CY 2018 Non-Facility Payment Rate CY 2018 Non-facility Payment Rate under the proposed Methodology
99201 $45 $44
99202 $76 $135
99203 $110
99204 $167
99205 $211

TABLE 20: Preliminary Comparison of Payment Rates for Office Visits Established Patients

CPT Code CY 2018 Non-Facility Payment Rate Proposed Non-facility Payment Rate
99211 $22 $24
99212 $45 $93
99213 $74
99214 $109
99215 $148

The proposed 2019 PFS Conversion Factor (CF) update is only a slight change ($0.06) from the finalized 2018 CF. Therefore, assuming the proposed 2019 CF is finalized, the rates outlined in the 2018 model should be an accurate indication of what the actual rates will be under the proposal.

The proposed rate for E/M levels 2 through 5 would be a higher payment than the current E/M level 2 and 3 payments but lower than the current E/M level 4 and 5 payments. Recognizing that some specialties that treat a higher proportion of E/M levels 4 and 5 would be adversely affected by this change, CMS is proposing to create a new HCPCS code that will add on $14 to the proposed E/M consolidated rate. Only select specialties are eligible for this add on payment.

The proposed code for this add on payment is GCG0X (Visit complexity inherent to evaluation and management associated with endocrinology, rheumatology, hematology/oncology, urology, neurology, obstetrics/gynecology, allergy/immunology, otolaryngology, cardiology, or interventional pain management-centered care (Add-on code, list separately in addition to an evaluation and management visit)).

CMS is also proposing a $5 add-on payments for complex primary care visits and a $67 add-on payment for a 30 minute prolonged visit.

Under the proposal, providers would still be required to use the current CPT codes on claims despite the new payment rates.

CMS is also proposing to apply a Multiple Procedures Payment Reduction (MPPR) for E/M services performed with procedures with global periods. Specifically, CMS is proposing to reduce payment by 50 percent for the least expensive procedure or visit that the same physician (or a physician in the same group practice) furnishes on the same day as a separately identifiable E/M visit, currently identified on the claim by an appended modifier -25.

In addition to changing the payments for E/M services, CMS is also proposing to make the documentation requirements easier for providers to follow. CMS believes that many of these revisions would correct outdated documentation policies and that by simplifying the requirements CMS will reduce administrative burdens on providers.

For example, CMS pays in-home visits at a higher rate than office visits. Current guidelines require the provider to document the medical necessity of the home visit in lieu of an office or outpatient visit to justify the higher payment. For home visits, CMS is proposing to remove the requirement that providers document the medical necessity of furnishing an E/M visit in the home rather than in the office in the medical record. The proposal gives providers the discretion to determine what is best for the patient without being subject to approval from CMS.

CMS is also proposing several significant changes to the E/M documentation requirements. For example, CMS is proposing to allow providers to base E/M coding determinations on either medical decision-making (MDM) or time in addition to the current E/M coding guidelines from 1995 and 1997.

Time can already be used as a justification for visits where counseling and/or coordination of care accounts for more than 50 percent of the face-to-face physician/patient encounter. CMS is proposing to broaden the definition to allow time as a justification for any visit.

CMS acknowledges stakeholder feedback that the MDM guidelines need to be updated to make it a more useful justification. CMS is therefore soliciting comments on potential changes to the current MDM guidelines to make this a more useful justification.

For visits that fall within the new payment rate for level 2 through 5 E/M visits, CMS is proposing to establish a minimum documentation standard whereby providers will only be required to meet the documentation requirements currently associated with a level 2 E/M visit for claims that use the current E/M guidelines or the newly proposed MDM justification.

Even though CMS would only require the necessary documentation to support a level 2 visit, CMS expects that providers will continue to document information for the appropriate level of care furnished for clinical, legal, operational or other purposes.

A different documentation standard would apply for claims that use time, as proposed, to determine the E/M visit level. CMS would require providers to document the medical necessity of the visit and show the total amount of time spent by the billing practitioner face-to-face with the patient.

In response to stakeholder feedback that it is redundant to require documentation of information in the billing practitioner’s note that is already present in the medical record, particularly with regard to history and exam for established patients, CMS is proposing to only require providers to document what has changed since the last visit. The proposal would also require documentation of pertinent items that have not changed since the last visit.

CMS is proposing to relax the requirement for a teaching physician to personally document their participation in an E/M procedure in the medical record for visit performed by a provider under their supervision. CMS is proposing to change the requirements so that the medical record must only document that the teaching physician was present at the time the service was furnished. The teaching physician does not have to be the one to document this information.

CMS is also considering (but not proposing) eliminating its prohibition on billing same-day E/M visits by providers of the same specialty within a group. Currently, CMS will not pay two E/M office visits billed by a provider (or provider of the same specialty from the same group practice) for the same beneficiary on the same day unless the provider documents that the visits were for unrelated problems which could not be provided during the same encounter.

CMS believes that eliminating this policy would reflect the changing practice of medicine while reducing administrative burden. CMS is soliciting comments on eliminating this prohibition but again, is not officially proposing changes in the 2019 PFS proposed rule.

Comments to CMS on the 2019 PFS proposed rule are due by September 10th. The HBMA Government Relations Committee intends to submit comments to CMS on its proposed changes to the E/M payment, coding and documentation requirements.

CMS Proposes 2019 MIPS Reporting Year Requirements

  • CMS is proposing to increase the MIPS performance threshold from 15 to 30
  • CMS is also proposing to add a “number of services provided” basis for the low-volume provider threshold.
  • However CMS is also proposing to include an opt-in mechanism for some ECs who receive the low-volume provider

The 2019 Medicare Physician Fee Schedule (PFS) proposed rule also included CMS’ proposed updates to the Medicare Quality Payment Program (QPP) for 2019. The QPP includes the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (Advanced APM).

The HBMA Government Relations Committee intends to provide comments to CMS on the proposed QPP changes by the September 10th submission deadline. HBMA Members are encouraged to provide feedback to the GR Committee on what topics HBMA should comment on and suggestions for what position HBMA should take on those topics. Members can email feedback to gr@hbma.org. CMS will review the comments it receives and issue a final version of this rule which is expected to be released in November.

The proposed rule adds Physical Therapists, Occupational Therapists, Clinical Social Workers and Clinical Psychologists to the list of MIPS eligible clinicians (ECs) for the 2019 reporting year. The current EC list includes Physicians, Physician assistants, Nurse practitioners, Clinical nurse specialist and Certified Registered Nurse Anesthetists.

For the 2019 MIPS reporting year, CMS is proposing to increase the MIPS performance threshold from 15 to 30 points. Eligible clinicians (EC) must meet the performance threshold to avoid up-to a seven percent negative payment adjustment in 2021. ECs can earn up-to a seven percent payment positive payment adjustment based on their performance. ECs who earn a MIPS Composite Performance Score (CPS) of 80 points will be eligible for additional bonuses from a separate pool of bonus money.

ECs who fall below the low-volume provider threshold are exempt from MIPS reporting and payment adjustments. For 2018, ECs who had $90,000 or less in Medicare Part B revenue or who treated 200 or fewer Medicare beneficiaries were exempt from MIPS.

For 2019, CMS is proposing to maintain the 2018 threshold requirements of dollar amount ($90,000) and number of beneficiaries (200) but is adding another basis for MIPS exemption – providing 200 or fewer Medicare covered services.

Falling below any of these three parts of the threshold definition would exempt an EC from MIPS reporting in 2019.

However, CMS is proposing to allow ECs who fall below one or two of the three options to voluntarily opt-into MIPS. This opt-in mechanism is in response to the comments of many stakeholders, including HBMA, advocating for an opt-in mechanism.

CMS is proposing to change the name of the Advancing Care Information category to the Promoting Interoperability (PI) category.

CMS is also proposing to reduce the weight of the Quality category from 50 percent to 45 percent and increase the weight of the Resource Use category from 10 to 15 percent. The Promoting Interoperability and Clinical Practice Improvement Activities categories would maintain their weight of 25 percent and 15 percent respectively.

For 2019 reporting, ECs would have the flexibility to use multiple reporting mechanisms to report data within each MIPS reporting category.

CMS is proposing to retain a bonus for small practices. However, rather than apply this bonus to an EC’s overall CPS, the bonus would be applied to the Quality category. As part of this bonus, small practices would receive three points for quality measures that do not meet the data completeness requirements.

In passing the Bipartisan Budget Act of 2018, Congress delayed CMS’ finalized policy from the 2018 QPP final rule that would allow improvement to factor into the Cost performance category until the 2022 reporting year.

MIPS ECs who furnish 75 percent or more of their covered services in emergency departments or as hospital inpatient services are allowed to report under a, “facility-based” set of quality measures.

CMS is proposing to add 10 new quality measures to the MIPS Quality Performance category for the 2019 reporting year. CMS is also proposing modifications to existing measures. The new and modified measures are described in detail in Appendix 1 of the proposed rule. CMS is adding eight new episode-based measures to the Cost category.

CMS is proposing to add six new improvement activities to the Clinical Practice Improvement Activity (CPIA) MIPS performance category for 2019. CMS is also proposing to modify five existing activities and remove one existing activity. The new, modified and deleted activities are described in detail in Appendix 2 of the proposed rule.

For the PI category, CMS will require ECs to use 2015 CEHRT for the 2019 reporting year. ECs were allowed to use either 2014 or 2015 CEHRT or a combination of the two in 2018.

CMS is also changing the PI measure structure. For years one and two of MIPS, ECs had to report on a base set of measures but also had a second set of measures to choose from. There were more available points than the total number of points needed for full credit for this category. This “extra credit” did not translate into higher overall MIPS score or allow for ECs to earn more than the maximum allowed points for the category.

CMS is proposing to eliminate the base measure plus non-base measure system so that it resembles the quality reporting category in that there will be one list of performance-based PI measures.

CMS Soliciting Public Feedback on Price Transparency and EHR Interoperability

  • Similar to the 2019 IPPS proposed rule, CMS is soliciting public input on how it could require providers to list their prices on a public
  • CMS is also interested in ideas on how it could leverage Medicare participation requirements to improve EHR

The 2019 Medicare Physician Fee Schedule (PFS) proposed rule, while open to comment on all policy proposals, specifically requested public input on two unrelated, though equally important, health policy topics: EHR interoperability and price transparency.

The Centers for Medicare and Medicaid Services (CMS) is not proposing anything specific with regard to these policies. However, the RFIs on these topics indicate that the Administration is particularly interested in these topics. The RFIs could be foreshadowing future policy proposals on these issues.

With regard to interoperability, CMS is interested in hearing from stakeholders on how CMS can leverage its health and safety standards that are required for participation in Medicare and Medicaid to further advance EHR adoption and interoperability. These health and safety standards include the Conditions of Participation (CoPs), Conditions for Coverage (CfCs), and Requirements for Participation (RfPs) for Long-Term Care (LTC) Facilities).

The 2019 IPPS proposed rule also included a request for comments on how to improve price transparency. The 2019 PFS also includes an RFI on price transparency with regard to PFS services.

Specifically, CMS is seeking information from the public regarding barriers preventing providers and suppliers from informing patients of their out-of-pocket costs; what changes are needed to support greater transparency around patient obligations for their out of pocket costs; what can be done to better inform patients of these obligations; and what role providers of health care services and suppliers should play in this initiative.

Central to the information CMS is seeking in the RFIs is the role of every party in the healthcare system (providers, payers, vendors, patients etc.) for the two topics. For example, should it be the provider’s responsibility that their EHR is interoperable or should it be the vendor’s? Or, would consumers seeking price transparency be best served seeing a provider’s list price or the price negotiated by their insurance plan?

This RFI is similar to the RFI CMS issued in the 2019 Hospital Inpatient Prospective Payment System (IPPS) proposed rule that asked for stakeholder feedback on making interoperability a hospital Condition of Participation. This month, CMS issued the 2019 IPPS final rule that requires hospitals to post their prices online and update the prices at least once per year. This suggests that CMS could require physician offices to post their prices as well.

The HBMA Government Relations Committee intends to reply to these RFIs in HBMA’s comments to CMS on the 2019 PFS proposed rule.

CMS Extends Deadline for Requesting Appeal of 2017 MIPS Performance Score

  • CMS posted the MIPS performance scores and payment adjustments for the 2017 reporting year/2019 payment
  • ECs can request an opportunity to appeal their score and corresponding payment adjustment until October 1st.

A few weeks ago, the Centers for Medicare and Medicaid Services (CMS) released the final performance scores and payment adjustments for the Merit-based Incentive Payment System (MIPS) 2017 reporting year/2019 payment year. MIPS-eligible clinicians (EC) are able to view

this performance feedback through Quality Payment Program (QPP) website using their EIDM account credentials.

ECs (along with their designated support staff or authorized third-party intermediary) who believe CMS made an error in calculating their MIPS score and/or payment adjustments have an opportunity to appeal their score by filing a Targeted Review Request with CMS through the QPP website. If granted, Targeted Review decisions are final and not eligible for further appeal.

The deadline for submitting a Targeted Review Request is now October 1, 2018, at 8:00 p.m. eastern time.

According to CMS, examples of circumstances in which ECs may wish to request a targeted review include:

  • Errors or data quality issues on the measures and activities you
  • Eligibility issues (e.g., you fall below the low-volume threshold and should not have received a payment adjustment).
  • Being erroneously excluded from the APM participation list and not being scored under APM scoring
  • Not being automatically reweighted even though you qualify for automatic reweighting due to the 2017 extreme and uncontrollable circumstances

Additionally, CMS says that it will generally require additional documentation to support the request. If an EC’s targeted review request is approved, CMS will update the EC’s final score and associated payment adjustment (if applicable) “as soon as technically feasible.” CMS will determine the amount of the payment adjustments after the conclusion of the targeted review submission period so that it can factor in the budget neutrality considerations of MIPS scoring.

CMS has published additional resources to help ECs understand their performance scores/payment adjustments and the Targeted Review Request Process including a:

  • Targeted Review of the 2019 Merit-based Incentive Payment System Payment Adjustment Fact Sheet
  • Targeted Review of 2019 MIPS Payment Adjustment User Guide.

CMS is also directing ECs with questions to email qpp@cms.hhs.gov or call 1-866-288-8292.

House of Representatives Passes Package of Healthcare Bills

  • The House of Representatives passed a package of healthcare bills that address a diverse set of
  • Most of the bills focus on improving access to HSAs and increasing what HSAs can be used

On July 25th, the House of Representatives passed two bills that packaged a number of legislative proposals considered and passed by the House Ways and Means (W&M) Committee earlier in the month. The bills, H.R. 6199, the Restoring Access to Medication and Modernizing Health Savings Accounts Act and H.R. 6311, the Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act were passed with bipartisan support.

Both bills are intended to make changes to the requirements for health savings accounts (HSA) that consumers can use to save tax-advantaged money which can only be spent on healthcare. HSAs are usually linked to high-deductible health plans (HDHP). Giving patients a large out-of- pocket spending obligation is intended to lower healthcare prices by promoting competition and price transparency.

HSAs also allow patients to save money to spend specifically for healthcare services they receive as opposed to paying high monthly premiums regardless if the patient receives much (or any) care during the course of a given plan year.

H.R. 6199 expands the types of services that consumers would be allowed to use their HSAs to purchase including over-the-counter drugs and healthcare products as well as gym memberships and other fitness programs that support health and wellness.

Among other things, H.R. 6311 increases the maximum annual HSA contribution limit to $6,750 for 2019. It also expands the availability of catastrophic “copper plans” so that anyone is allowed to purchase a copper plan through a health insurance exchange established by the Affordable Care Act (ACA). The bill also allows consumers to link an HSA to a bronze or copper plan sold on an ACA exchange. Lastly, the bill increases the allowed carryover for flexible (flex) savings accounts which function similarly to HSAs but limit the amount of money that can be carried over from year to year.

The House of Representatives also passed H.R.184, the Protect Medical Innovation Act, which permanently repeals the ACA’s medical device tax. This 2.3 percent tax on device manufacturers was used to help offset the cost of the ACA. The medical device industry has been strongly advocating for its repeal ever since it was passed as part of the ACA.

Another bill that passed the House this month seeks to make federal agencies more accountable on the recommendations made by Government Accountability Office (GAO) reports. The GAO is the federal “watchdog” agency that conducts analysis and studies of various federal programs. GAO reports usually include recommendations to federal agencies based on the report’s findings but these recommendations are non-binding.

This bill would require federal agencies to issue their own reports on how they are implementing recommendations made by the GAO. Although this bill applies to all federal agencies, regular readers of the Washington Report will note that the GAO publishes many reports on Medicare, Medicaid and other HHS programs.

These bills are all awaiting further action by the Senate. It is unclear if the Senate will take up these bills for consideration.

CMS Proposes Expanding Site Neutral Payments for Hospital Outpatient Services

  • CMS applies a relativity adjuster to certain OPPS services for facilities created after November 2, 2015. CMS is proposing to maintain the 40 percent relativity
  • CMS is also proposing to apply the relativity adjuster when a grandfathered facility expands the services it offers to a new clinical
  • CMS is also proposing to apply the relativity adjuster to HCPCS code

In the 2019 Medicare Hospital Outpatient Prospective Payment System (OPPS) proposed rule issued earlier this month, the Centers for Medicare and Medicaid Services (CMS) proposed to expand its site neutral payment policy for certain services performed in certain hospital outpatient departments.

In the Bipartisan Budget Act of 2015 (BBA), Congress required CMS to implement a site-neutral payment policy for off-campus provider based (PBD) departments that opened after November 2, 2015. Congress, at the recommendation of many influential groups such as the Medicare Payment Advisory Commission (MedPAC), believed that many health systems were taking advantage of the generally higher reimbursement rates under the OPPS by acquiring physician practices that billed under the PFS and converting them to off-campus PBDs.

Congress and CMS do not believe it is appropriate for the Medicare program to pay more for these services in one setting versus another. Furthermore, the out-of-pocket costs to the beneficiary are significantly higher when receiving care in one setting versus another.

Off-campus PBDs that were owned or constructed by the hospital before November 2, 2015, were grandfathered meaning they could continue to bill Medicare using the OPPS. However, any “new” off-campus PBD would be subject to a relativity adjuster that reduced its OPPS payments so that its reimbursement is roughly equal to the PFS rate for that service. The 2019 PFS proposed rule would maintain the current relativity adjuster of 40 percent. This means CMS will reimburse new off-campus PBDs at 40 percent of the OPPS rate.

Since this policy was created, CMS has had to make several clarifications to how it applies its site neutral payment policy for off-campus PBDs. The 2019 OPPS seeks to further clarify how this site neutral payment policy applies to off-campus PBDs when they expand the services they offer.

Specifically, CMS is proposing that the exception from this policy for grandfathered off-campus PBDs would only apply for services provided within the “clinical families” the PBD offered during a baseline period of November 1, 2014 – November 2, 2015. This eliminates a potential loophole that would allow grandfathered off-campus PBDs from expanding the clinical families it offers as a way around the site-neutral policy for “new” facilities.

There are 19 clinical families. They are listed in Table 32 of the proposed rule. Under the proposal, for grandfathered facilities that expand the services it offers to new clinical families, the relativity adjuster would apply for those expanded services.

CMS is also proposing to eliminate another loophole by expanding the site-neutral payment policy to “clinic visits” performed by off-campus PBDs. The site-neutral policy previously did not apply to these services which CMS notes were most commonly billed using HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient) with modifier “PO.” This code is paid under APC 5012 (Clinic Visits and Related Services). Under the proposal, CMS would apply the relativity adjuster to this code when billed by off-campus PBDs that are not grandfathered.

PFS Includes Demonstration for Medicare Advantage MIPS Exemption

  • CMS will exempt some ECs from MIPS reporting if they participate in certain MA plans that mirror Medicare
  • CMS is considering if those MA plans should qualify as Advanced APMs in future

As part of the 2019 Medicare Physician Fee Schedule (PFS) proposed rule, the Centers for Medicare and Medicaid Services (CMS) announced a demonstration program that would allow providers to receive an exemption from the Merit-based Incentive Payment System (MIPS) if they sufficiently participate in risk-bearing Medicare Advantage (MA) plans.

The Quality Payment Program (QPP) contains two participation tracks. Most providers participate in MIPS but CMS is trying to push more providers towards the second track, Advanced Alternative Payment Models (Advanced APM).

In simplest terms, an APM can be described as a non-fee-for-service payment system that holds providers accountable for quality while also requiring providers to accept financial risk. While CMS is testing many APMs in the Medicare program, only a handful qualify as an Advanced APM.

Under the QPP, eligible clinicians (EC) who meet a revenue or patient count participation threshold in Advanced APMs can earn a five percent lump sum bonus payment in addition to any financial gains or losses from participating in the model. ECs who qualify as an Advanced APM participant are also exempt from MIPS reporting and payment adjustments.

Many in the provider community have criticized the small list of Advanced APMs to choose from. In creating the QPP, Congress required the first few years of Advanced APMs to be exclusively Medicare models but allows CMS to expand the list to “all-payer” iterations after a few years. This has not deterred many commercial payers from undertaking their own initiatives to design value-based payment models.

Recognizing that there may be some commercial models that are similar to the Medicare models, some stakeholders have proposed that CMS should consider some Medicare Advantage (MA) plans as APMs as a way to broaden the list.

In the 2019 PFS proposed rule, CMS is proposing a new demonstration, the Medicare Advantage Qualifying Payment Arrangement Incentive (MAQI), to test whether certain MA plans would deliver similar quality and financial results, in addition to similar participation rates, as the current list of Advanced APMs and MIPS before agreeing to add MA plans as Advanced APMs.

Under the MAQI demonstration, CMS would apply a similar participation threshold for the MAQI participation as it does for Advanced APM participation. Qualified MA plans would also have to meet similar criteria as Advanced APMs with regard to risk, quality measures and use of technology. To be eligible for participation in the MAQI demonstration, ECs cannot be qualified as Advanced APM participants and they cannot be otherwise exempt from MIPS such as through the low-volume provider exemption.

ECs interested in participating in the MAQI demonstration must apply to participate via: https://app1.innovation.cms.gov/MAQIAPP. The application period closes on September 6, 2018.

Despite Proposed MIPS Changes, Stakeholders Say More Improvements are Needed

  • The House Energy and Commerce Committee’s Health Subcommittee convened a hearing on MIPS implementation from the provider
  • The hearing witnesses opposed scrapping MIPS but advocated for a number of or
  • The GAO issued a report that shows many small and rural practices continue to face challenges with MIPS

In implementing the Merit-based Incentive Payment System, (MIPS), the Centers for Medicare and Medicaid Services (CMS) faces a great challenge in balancing the interests of eligible clinicians ECs who want to be exempt from MIPS reporting because they feel it is too difficult with those who invest many resources in succeeding in the program.

Those who participate in MIPS rely on the negative payment adjustments for other ECs to fund their bonuses. The more ECs who are exempt, the fewer ECs there are to receive a negative adjustment. This means there is little money available to fund the bonuses for ECs who invest in participation. Often, the potential positive payment adjustments they can earn is far less than the cost of the investment in compliance.

The 2019 Medicare Physician Fee Schedule (PFS) proposed rule (which also includes CMS’ proposed updates to MIPS for 2019) seeks to balance these interests in new ways.

In one example of how CMS is attempting to balance these interests, CMS proposed to expand the low-volume provider threshold that exempts ECs from MIPS reporting but adding the ability for some ECs who fall below the threshold to voluntarily opt-into MIPS. CMS also proposes to maintain a bonus for small practices, who are often the ECs who find MIPS challenging, but would shift the bonus from being applied to an EC’s overall MIPS score to being applied to their Quality category score.

The proposed rule would implement many of the new flexibilities Congress granted CMS in the Bipartisan Budget Act (BBA) of 2018.

These flexibilities were passed in response to many stakeholder concerns that the 2019 MIPS reporting year would be more challenging for participating ECs. Most notably, Congress allowed CMS greater authority to set the performance threshold for determining negative payment adjustments. CMS also proposed other steps to make it easier for ECs to participate such as expanding the reporting options so that ECs can report data using multiple reporting mechanisms within a reporting category.

These flexibilities should benefit every EC participating in MIPS. However, a number of stakeholders believe that more improvements are still needed.

The Government Accountability Office (GAO) issued a report that describes how challenges continue to exist for many small (15 or fewer providers) and rural practices. According to the report, these practices have less financial resources to invest in costly EHR products that are essential for MIPS participation as well as less resources to invest in additional staff to manage MIPS participation. The GAO has highlighted these issues in the past.

The House Energy and Commerce Committee’s Health Subcommittee held a hearing on July 26th that sought the provider community’s perspective on MIPS implementation. The witnesses at the hearing were not in favor of eliminating MIPS but expressed their desire to see some needed improvements.

Specifically, the witnesses wanted CMS to change the low-volume provider threshold so that fewer ECs are exempt from MIPS reporting. Otherwise, there will not be enough ECs who earn a negative payment adjustment to fund a meaningful positive payment adjustment.

Congress requires the MIPS payment adjustments to be budget neutral meaning the negative adjustments fund the positive adjustments. One witness described how her practice’s 95 percent MIPS score resulted in a 1.59 percent payment increase.

The Medicare Payment Advisory Commission (MedPAC), a non-partisan advisory body to Congress on Medicare payment policy, has recommended that Congress scrap MIPS in favor of an alternative program outlined by MedPAC. MedPAC criticizes MIPS for not meaningfully measuring for quality and for having compliance costs that exceed its potential savings. Although many providers would agree with MedPAC’s criticisms, MedPAC’s proposed replacement has little support among Congress or the provider community.

It is clear that CMS is taking a gradual approach to increasing MIPS participation. Close to half of ECs will qualify for a MIPS exemption from the low-volume provider threshold in 2019. In 2017, the first year of MIPS reporting, 91 percent of ECs avoided the MIPS negative payment adjustments. To the E&C hearing witnesses point, this means that only nine percent of ECs funded the positive payment adjustments that the other 91 percent of ECs were eligible for based on 2017 reporting.

Social Security Number Removal Initiative Update

  • CMS’ plan to replace every beneficiary’s Medicare card with a card that uses a new beneficiary ID number is proceeding as
  • CMS will mail the cards a few states a time over seven planned mailing CMS begun mailing wave four.

The Centers for Medicare and Medicaid Services (CMS) effort to replace all Medicare beneficiary cards with a card that assigns every beneficiary with a new beneficiary identification number is proceeding according to schedule.

Congress required CMS to replace the Social Security Number (SSN)-based Health Insurance Claim Number (HICN) with a new, alphanumeric beneficiary number unique to each beneficiary called the Medicare Beneficiary Identifier (MBI). Congress passed this requirement to prevent the HICN from being used for fraud or identity theft.

Under what CMS is calling the Social Security Number Removal Initiative (SSNRI), all new Medicare beneficiaries will receive cards with an MBI. CMS is replacing the cards for existing beneficiaries in seven waves. Waves one and two have ended with wave three still ongoing and wave four having just begun. The wave four states are Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont.

CMS will accept claims with either the HICN or MBI through the end of 2019. Beginning in 2020, CMS will only accept claims with the MBI.

CMS has been making a strong effort to inform both providers and patients of their new MBI. CMS is asking providers to help patients understand the new cards. CMS created a handout for patients (in English and Spanish) to direct patients to resources such as MyMedicare.gov and the 1-800-MEDICARE (1-800-633-4227) hotline.

CMS is also creating tools to help inform healthcare providers about which patients have received their new card. MBIs will be indicated in remittance advice on claims and Medicare Administrative Contractors (MAC) have an MBI look-up tool on their website.

CMS Transmittals

Transmittal Number
Subject
Effective Date
File Conversions Related to the Spanish Translation of the Healthcare Common Procedure Coding System (HCPCS) Descriptions
10/1/2018
Clarify Detailed Written Orders For Durable Medical Equipment, Prosthetics, Orthotics, And Supplies (DMEPOS)
8/28/2018
Quarterly Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment
10/1/2018
Changes to the Laboratory National Coverage Determination (NCD) Edit Software for October 2018
10/1/2018
October Quarterly Update to 2018 Annual Update of HCPCS Codes Used for Skilled Nursing Facility (SNF) Consolidated Billing (CB) Enforcement
10/1/2018
Internet Only Manual (IOM) Update to Publication 100-02, Chapter 11 – End Stage Renal Disease (ESRD), Section 100
10/23/2018
New Waived Tests
7/1/2018
Client Letter Code Removal and Decommission in the ViPS Medicare System (VMS)
1/7/2019
Analysis for First Coast Service Options (FCSO) and Novitas for the Security Assertion Markup Language 2.0 (SAML 2.0) MigrationN
N/A
File Conversions Related to the Spanish Translation of the Healthcare Common Procedure Coding System (HCPCS) Descriptions
7/2/2018
Update to the Internet Only Manual (IOM) Publication 100-04 – Medicare Claims Processing Manual, Chapter 27 – Contractor Instructions for Common Working File (CWF)
8/14/2018
Medical Review of Evaluation and Management (E/M) Documentation
8/14/2018
New Physician Specialty Code for Undersea and Hyperbaric Medicine
1/7/2018
New Physician Specialty Code for Undersea and Hyperbaric Medicine
1/7/2019
Implementation of Automating First Claim Review in Serial Claims for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS)
1/7/2019
Notice of New Interest Rate for Medicare Overpayments and Underpayments -4th Qtr Notification for FY 2018
7/18/2018
Revisions to the State Operations Manual (SOM) Chapter Two for Organ Procurement Organizations (OPOs)
7/6/2018
Annual (2019) Update of the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM)
10/1/2018
Medicare Part A Skilled Nursing Facility (SNF) Prospective Payment System (PPS) Pricer Update FY 2019
10/1/2018
Clarify Detailed Written Orders For Durable Medical Equipment, Prosthetics, Orthotics, And Supplies (DMEPOS)
8/7/2018
Quarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes – July 2018 Update
7/2/2018
Consumer Friendly Spanish Descriptors for the Current Procedural Terminology (CPT) / Level 1 Healthcare Common Procedure Coding System (HCPCS) Codes and a Correction to the Part A Spanish Medicare Summary Notices (MSNs)
7/2/2018
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