The Centers for Medicare & Medicaid Services (CMS) has issued its proposed Medicare physician fee schedule (PFS) rule for calendar year (CY) 2019. In addition to updating rates for physician services, the sweeping rule proposes changes to numerous other Medicare Part B policies. Highlights of the proposed rule include the following:

  • CMS proposes a 2019 conversion factor (CF) of $36.0463, up slightly from the 2018 CF of $35.9996. This proposed rate is based on a statutory update of 0.25%, offset by a -0.12% relative value unit (RVU) budget neutrality adjustment. CMS also proposes numerous RVU changes for individual procedures, including potentially misvalued codes. CMS also discusses its efforts to accurately value postoperative visits performed during the global period.
  • CMS proposes to reduce from 6% to 3% the “add-on” payment for new, separately-payable Part B drugs and biologicals that are paid based on wholesale acquisition cost when average sales price during first quarter of sales is unavailable.
  • CMS proposes to maintain its current “site-neutral payment policy” whereby the agency reduces payments to certain provider-based, off-campus hospital outpatient departments that came into operation after the Bipartisan Budget Act of 2015 (which CMS calls “off-campus provider-based departments” or “off-campus PBDs”). Under this policy, CMS reimburses nonexcepted items and services furnished by these off-campus PBDs at a rate that is 40% of the outpatient hospital prospective payment system (OPPS) rate.
  • CMS is maintaining its implementation schedule for Appropriate Use Criteria (AUC), which requires that physicians who order advance diagnostic imaging (ADI) services (diagnostic magnetic resonance imaging, computed tomography, and positron emission tomography/nuclear medicine) for a Medicare beneficiary consult with AUC via a clinical decision support mechanism (CDSM). In the final 2018 rule, CMS announced it will begin the AUC program on January 1, 2020 (three years after the statutory deadline) as an “educational and operations testing year. As of January 1, 2020, ordering professionals will be required to consult specified applicable AUC using a qualified CDSM when ordering applicable ADI services, and furnishing professionals will be required to report consultation information on the Medicare claim. However, CMS will pay claims for ADI services in 2020 regardless of whether the claims report the AUC consultation. From July 2018 through December 2019, “early adopters” can voluntarily report limited consultation information on Medicare claims. In the 2019 proposed rule, CMS proposes to:
    • Extend the AUC program requirements to independent diagnostic testing facilities (joining physician offices, hospital outpatient departments, and ambulatory surgical centers).
    • Allow the AUC consultation to be performed by auxiliary personnel under the direction of the ordering professional and incident to the ordering professional’s services. The proposed rule is currently silent on what, if any, steps are required if the auxiliary personnel learn that the ordered ADI test does not adhere to the specified AUC criteria.
    • Clarify that AUC consultation information must be reported on all applicable claims (i.e., not just reported on claims by furnishing professionals/practitioners).
    • Use established coding methods (e.g., G-codes and modifiers), not a unique consultation identifier, to report the required AUC information.
    • Revise the significant hardship exception criteria.
  • CMS proposes to allow diagnostic imaging tests to be furnished under a physician’s direct supervision (instead of personal/in-the-room supervision) when performed by a radiologist assistant in accordance with state law and state scope of practice rules. Radiologist assistants would be required to personally perform the test and not supervise a technologist.
  • CMS proposes significant changes to evaluation and management (E/M) payment and documentation policies that are intended to reduce administrative burdens and improve payment accuracy. Notably, CMS proposes to eliminate the payment distinction and documentation requirements between E/M visit levels 2 through 5. CMS also proposes to impose a 50% multiple procedure payment adjustment when E/M visits and procedures with global periods are furnished together.
  • CMS proposes numerous changes to the Quality Payment Program (QPP) designed to reduce burdens on clinicians, focus on outcomes, and promote interoperability of electronic health records. These proposals are discussed in a detailed CMS fact sheet. In conjunction with the proposed rule, CMS announced additional details related to its Medicare Advantage Qualifying Payment Arrangement Incentive (MAQI) Demonstration, which will waive Merit-based Incentive Payment System (MIPS) requirements for clinicians sufficiently participating in Medicare Advantage arrangements that are similar to Advanced Alternative Payment Models.
  • The proposed rule includes numerous other policy provisions, including: implementation of a Bipartisan Budget Act of 2018 (BBA of 2018) provision pertaining to writing and signature requirements in certain compensation arrangement exceptions to the Stark Act; implementation of a BBA of 2018 provision adding mobile stroke units, renal dialysis facilities, and the homes of ESRD beneficiaries as Medicare telehealth originating sites; payment for new communication technology-based service codes; discontinuation of certain functional reporting requirements for outpatient therapy services and creation of payment modifiers for services furnished by therapy assistants (which will be paid at 85% of the applicable Part B payment); and changes to the definition of “applicable laboratory” for clinical laboratory fee schedule purposes. CMS also solicits comments on creation of a bundled episode of care for management and counseling treatment for substance use disorders.

CMS also includes a Request for Information (RFI) on the possibility of revising conditions of participation to advance electronic exchange of information that supports safe, effective transitions of care among providers. A second RFI requests input on ways to improve the accessibility and usability charge information to help patients understand their potential financial liability and compare charges for similar services across providers and suppliers.

CMS will accept comments on the proposed rule and RFIs through September 10, 2018.