The Centers for Medicare & Medicaid Services (CMS) on July 12, 2018, published the CY 2019 Proposed Rule for the Medicare Physician Fee Schedule (PFS). While in previous years regulations for the Quality Payment Program (QPP) were released independently, the 2019 Medicare PFS proposed rule includes proposals related to Medicare physician payment as well as the QPP.

The MPFS dictates Medicare rates and policies under Part B, while the QPP implements two key value-based payment programs: the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs). This year's QPP rulemaking continues to escalate the ramp up for MIPS-participating clinicians, with CMS proposing to increase the number of clinicians included in MIPS, increase the threshold score for avoiding a MIPS penalty, and increase the weight of the MIPS cost component. Advanced APM track policies remained mostly the same, with some minor proposed policy changes intended to streamline the program.

Among other notable changes under the PFS, the proposal would reduce provider reimbursement rates for new drugs under the Medicare Part B by 3 percent during the first quarter of sales when the average sales price (ASP) is unavailable. The Administration first floated the change in its fiscal 2019 budget proposal released in February, and the idea has been previously recommended by the Medicare Payment Advisory Committee (MedPAC). This policy, if enacted, may affect uptake of new drugs and biologic products, particularly if physicians are uncertain about their likely payment amounts as compared to their acquisition costs.

The Proposed Rule also includes a number of increases related to telehealth. Specifically, CMS proposes distinguishing between Medicare telehealth services and "communication technology-based and remote evaluation services." This distinction would permit Medicare reimbursement for several services that do not meet the statutory requirements for Medicare-reimbursable telehealth services. CMS proposes paying clinicians for virtual check-ins and for evaluations made from patient-submitted photos/images, or "store and forward applications." The updates may encourage additional use of these services and provide a baseline level of reimbursement for services already being provided by clinicians.

CMS has also proposed a major reworking of its evaluation and management (E/M) visit payment scheme that has implications for clinicians that provide complex care. The proposal advances structural changes to evaluation and management (E/M) codes that are significant and may result in a decrease in payment for services for some specialties; however, this may be offset by streamlined reporting requirements associated with these services. Specialties which routinely use Level 4 and Level 5 E/M codes are most likely to be impacted by the change. To support this change, CMS proposes allowing clinicians to use their own medical decision-making or the time spent with a patient to determine the level of a patient's care needs, instead of relying on the E/M codes.

Finally, with the repeal of the Medicare outpatient therapy caps and associated exceptions processes under the Bipartisan Budget Act (BBA), CMS proposes to discontinue functional reporting requirements for services furnished on or after January 1, 2019.

Comments on the proposed rules are due by Sept. 10 2018. The Final Rule will likely be released in early November 2018 and new Relative Value Units (RVUs) and payment rates will go into effect on January 1, 2019.