Medicare Physician Fee Schedule Changes May Hit Specialists Hardest


Changes to patient evaluation and management (E/M) documentation requirements and reimbursement are among the most notable proposed initiatives in the 2019 Medicare Physician Fee Schedule released in July by CMS.

According to CMS, the proposed changes would simplify E/M documentation demands and give physicians more time to focus on patient care. While any provider would agree that the current documentation requirements are unnecessarily complex, physician groups and industry associations have expressed apprehension about the impact of the proposal. The American Hospital Association reacted with concern that by streamlining E/M codes "physicians who provide care for a disproportionate number of high-acuity patients would consistently, and unfairly, receive underpayment."

CMS is accepting comments on the proposal through September 10, 2018, and industry observers are already anticipating that E/M changes will be a significant point of contention.

In the proposed revisions to payment policies, CMS notes that "[s]takeholders have long maintained that all of the E/M documentation guidelines are administratively burdensome and outdated with respect to the practice of medicine" and that they "fail to meaningfully distinguish differences among code levels." CMS also acknowledges that the proposed rule represents "a relatively broad outline" that will require "ongoing refinement . . . through subregulatory guidance."

While the simplification of E/M documentation is a laudable goal, physician concerns center on the fact that under the proposed rule there would be no payment differential for E/M visits level 2 through 5. CMS proposed single blended payment rates for level 2 through 5 E/M visits with additional codes covering resources that are required beyond those included in the single payment rates. The practical result of this proposal would be increased payments for level 1 through 3 E/M visits with reductions for levels 4 and 5 E/M visits, typically the most complex medical cases.

Following the proposal announcement, Ted Okon, executive director of the Community Oncology Alliance, tweeted that he was "at a complete loss of words to even try to explain the @CMSGov absurd proposal to pay the same for evaluation of a case of the sniffles in a Medicare patient and for the complicated multiple myeloma case an oncologist just sent me. Makes no sense at all!!!"

In fairness to the proposal, it allows for add-on codes to capture the complexity of specialty care and the complexity of ongoing care for primary care physicians, but specialists are wise to be skeptical. CMS estimates that the overall impact for medical oncology will be a 4 percent reduction in reimbursement, with a 2 percent reduction for radiation/oncology.

In addition to the add-on codes, CMS proposes to give practitioners the ability to choose whether to use either medical decision-making (MDM) or time as a basis to determine the appropriate level of E/M visit, stating that this option "would allow different practitioners in different specialties to choose to document the factor(s) that matter most given the nature of their clinical practice." CMS also noted that it was "proposing to allow practitioners the option to use time as the single factor in selecting visit level and documenting the E/M visit, regardless of whether counseling or care coordination dominate the visit."

One notable upside to the proposal is that it should result in a drastic reduction in fraud and abuse investigations that were based on "upcoding" of E/M visits. For well over a decade, far too many providers have been burdened with defending False Claims Act allegations, even when appropriate care was provided, if the documentation of their service did not meet some ridiculous documentation standards that were largely unrelated to the quality of care provided. Another long-overdue positive change in the proposal is that physicians would be permitted to review and update prior history and exam information instead of being required to re-enter redundant information. Physicians would also be permitted to simply review and verify certain information entered by the physician's staff or the patient. These changes are needed, but at what financial cost?

CMS states that it believes any financial impact suffered by practitioners related to the new rates would be offset by the reduced administrative burden of the proposed documentation guidelines. That statement is likely true for some physicians, but not for others. With a January 1, 2019 proposed effective date, CMS seems oblivious to how close to the profit margin some physician practices operate, the time it will take physicians to evaluate the proposal to be able to accurately develop 2019 budgets, or how unfair it is to ask physicians to develop budgets when the subregulatory guidance, that CMS admits will be necessary to implement the rule, has not yet been written.

Denise Burke is a partner with Waller Lansden Dortch & Davis, LLP and focuses exclusively on healthcare transactions, investigations, regulatory and operational issues. She is the immediate past chair of the Tennessee Bar Association Health Law Section, ranked by Best Lawyers as a Woman of Influence and is included in Memphis Medical News' InCharge magazine.

Established in 1905, Waller is one of the oldest law firms in Tennessee. With more than 230 attorneys serving 10 core industries, it can quickly assemble a multi-dimensional team to address almost any matter.


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