Proposed 2019 Physician Fee Schedule Threatens Single-fee E&M Payment Rates

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Original story posted on: August 27, 2018

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Proposed rule will cut by 50% claims submitted with modifier 25.

In what is being reported as the biggest change of its kind in more than two decades, the Centers for Medicare & Medicaid Services (CMS) plans to redefine the documentation requirements for evaluation and management (E&M) coding in 2019, along with flattening payments for new and established patient office visits to a single pay system. The proposal offers $93 for established office visit codes (99212-99215) and $135 for new patient visits (99202-99205).


CMS is proposing to forego the 1995 and 1997 guidelines for what is being reported as a “simpler model” that will eliminate the need to re-document redundant information from prior visits and instead focus on medical decision-making. CMS is also proposing to blend patient E&M encounters into one specific relative value unit (RVU), because in their opinion, documentation is based on the ability of providers to get into their electronic medical records (EMRs) to find additional information other than what was noted.


CMS is estimating that if these proposals are finalized, clinicians would see a significant increase in productivity. In fact, the agency’s position is that this proposal will remove unnecessary paperwork requirements and would save individual clinicians an estimated 51 hours per year (the math says 12 minutes a day) if 40 percent of their patients are covered by Medicare.


But what is missing in all this is the reality of the reimbursement concerns, especially for specialty physicians who are taking care of sicker patients who need more time, effort, and higher levels of care to manage their complex issues.


This proposal will in effect penalize those physicians in specialties such as oncology (7 percent reduction), neurology (7 percent reduction), cardiology (3 percent reduction), pulmonary (3 percent reduction), rheumatology (7 percent reduction), and nephrology (3 percent reduction), to name a few. This does nothing to cut spending under the Medicare program, but more redistributes money among physicians. 


Instead of the American Medical Association (AMA), in conjunction with Medicare, adopting a new code set, CMS is attaching the same RVU to the level 2 through 5 codes for both new and established patients, which creates the same payment amount. Most of the impact will be focused on 99214 and 99215, with a 15 percent cut of about $16-$23. These codes are about 89 percent of all allowed services, according to CMS data, and practices routinely billing the 99204 new patient code would see a 13 percent decrease in reimbursement. Your E&M profile would determine if you are in the “win” or “lose” column with this proposal.


But some doctors, with one payment level no matter the complexity of a patient visit, could face drastic cuts in payment, especially while overseeing life-threatening, complex cases. Also, if the documentation proposal goes through, there could be too much flexibility, and options that are included in a defined document or manual could be difficult to adopt by other government and commercial payers.


CMS states under the proposed rule that “Medicare would only require documentation to support the medical necessity of the visit at the current level 2 requirement. You may have a complex patient, whose visit qualifies at a level 4 or 5 E/M code, but your documentation would only have to meet level 2 CMS standards.”


Anyone seeing a problem with this picture, from a malpractice standpoint? Given this major disconnect, practices could be venturing into the territory of malpractice and non-compliance issues, wherein providers can use certain CPT® codes but still not meet the documentation requirements.
If the proposed E&M changes weren’t enough to ponder, the proposed physician fee schedule (PFS) represents another blow to the physician reimbursement model. Many commercial insurers have been reducing their reimbursement by 50 percent when minor procedures or other services are performed during the same E&M, encounter, and when a modifier 25 is appended to an E&M visit. CMS is proposing to do this as well. 


Modifier 25 could be used as a reduction edit for CMS, not protection for your E&M encounters.


How many times do you place a modifier 25 on an E&M service when providing a second service (i.e., a skin tag removal, an injection, a diagnostic test, etc.) on the same day? Often done for patient convenience and for physician efficiency, CMS is proposing to reduce reimbursement for such services by half (the national equivalent of $47-$68 on a sick visit encounter). This reduction model previously has only been applied to surgical procedures, when multiple procedures are performed during the same surgical event. The impact of this change on physician office-based and outpatient-based services would be dramatic.


Physician fee schedules have already been attacked, and multiple specialties have seen significant reductions over the years in efforts by CMS to create some type of cost-savings measure. However, this has led to multiple problems, including physicians increasing their levels of service to compensate for reductions taken in RVUs. This has also led to increases in costs to beneficiaries being required to return to the office for multiple visits due to the bundling of the services, and an increase in co-payments. 


The majority, if not all, providers, rendering services in addition to E&M care on the same visit, do so because the services are medically necessary – and to penalize them financially would be irresponsible on the part of CMS. Providers are forced to carry a heavy administrative burden with regard to all the requirements set forth by the federal payor programs and stripping them of further compensation for taking care of elderly patients with multiple systemic problems, some of whom require procedures on the same date, to be carefully evaluated, is again, irresponsible. 


CMS could show that they have the physicians’ best interests at heart by spending their money on providing proper training and education for providers and bringing back the Part B newsletters that once served as tremendous education tools for all providers.


Consultants and educators across the country trusted these newsletters to educate them before they were eliminated due to "budgetary cuts."


Modifier 25 serves as a true indicator of a “significantly, separately identifiable evaluation and management service above and beyond the pre-service workup of a procedure, performed on the same day by the same physician” – and as such, it should remain untouched to ensure that all Medicare beneficiaries are provided appropriate care and evaluations and are not forced to make repeat visits, resulting in increased co-payments and out-of-pocket costs, not to mention unwarranted, burdensome, and expensive travel back to the office!
The public comment period for this expires Sept. 10, 2018. If you disagree with any of the proposed changes above, we urge you (and your patients) to do the following:

  1. Go online to www.regulations.gov.

  2. Click on “Federal Register” (FR).

  3. Reduce the search by filtering using “CMS.”

  4. Look for the Physician Fee Schedule FR dated July 27, 2018 and click the “COMMENT” button.

Single-issue comments will have more impact.


Program Note:
Listen to Terry Fletcher report on this topic today on Talk-Ten-Tuesdays, 10 a.m. EST.


Comment on this article

Terry Fletcher BS, CPC, CCC, CEMC, CCS, CCS-P, CMC, CMCSC, CMCS, ACS-CA, SCP-CA

Terry Fletcher, CPC, CCC, CEMC, SCP-CA, ACS-CA, CCS-P, CCS, CMSCS, CMCS, CMC, is a healthcare coding consultant, educator, and auditor with more than 30 years of experience. Terry is a past member of the national advisory board for AAPC, past chair of the AAPCCA, and an AAPC national and regional conference educator. Terry is the author of several coding and reimbursement publications, as well as a practice auditor for multiple specialty practices around the country. Her coding and reimbursement specialties include cardiology, peripheral cardiology, gastroenterology, E&M auditing, orthopedics, general surgery, neurology, interventional radiology, and telehealth/telemedicine. Terry is a member of the ICD10monitor editorial board and a popular panelist on Talk Ten Tuesdays.

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