Highlights of the CY 2018 Physician Fee Schedule Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) published the CY 2018 PFS proposed rule on July 21, 2017. This proposed rule includes proposals to update payment policies, payment rates, and quality provisions for services furnished under the Medicare PFS on or after January 1, 2018. Under the PFS, payments include services provided by physicians and other practitioners in all sites of service. Some of these services include but are not limited to visits, surgical procedures, diagnostic tests, therapy services and specified Medicare preventive services. Relative Value Units (RVUs) are assigned to each service applied and include physician work, practice expense and malpractice. Through the use of a conversion factor, RVUs become payment rates. The CY 2018 PFS proposed rule may affect how some of these services are paid.

Overall Payment Update and Misvalued Code Target

In its annual process CMS is reviewing many potentially misvalued code initiatives by identifying potential misvalued services and making appropriate adjustments to the relative values for those services. Congress set a target for adjustments to misvalued codes in the fee schedule of 0.50 percent for 2018. If the net reductions in misvalued codes in 2018 are less than 0.50 percent of the total revenue under the fee schedule, a reduction equal to the percentage difference between 0.50 percent and the percent of expenditures represented by misvalued codes reductions must be made to payments for all PFS services. In the CY 2018 proposed rule, CMS has proposed misvalued code changes that would achieve 0.31 percent in net expenditure reductions falling short of the 0.50% targeted for 2018. If finalized, the difference of -0.19% would be applied overall as a reduction of payments for PFS services.

After applying these adjustments, and the budget neutrality adjustment to account for changes in RVUs, all required by law, the proposed 2018 PFS conversion factor is $35.99, a slight increase to the 2017 PFS conversion factor of $35.89.

Other proposed change to the rule include but are not limited to:

Appropriate Use Criteria (AUC) for Advanced Imaging Services

Please see previously posted article regarding AUC for Advanced Imaging services at our website http://www.m3meridian.com/newsroom/provider-news-and-alerts/

Medicare Telehealth Services

CMS is proposing several code additions to the list of telehealth services and is recommending to eliminate the required reporting of the telehealth modifier for professional claims. The proposed list of codes including:

  • HCPCS code G0296 (visit to determine low dose computed tomography (LDCT) eligibility);
  • CPT code 90785 (Interactive Complexity);
  • CPT codes 96160 and 96161 (Health Risk Assessment);
  • HCPCS code G0506 (Care Planning for Chronic Care Management); and
  • CPT codes 90839 and 90840 (Psychotherapy for Crisis).

Care Management Services

CMS is proposing to adopt CPT codes for CY 2018 for reporting several care management services that are currently reported using Medicare G-codes. They are also seeking public comment on ways that might further reduce practitioner burden for reporting of chronic care management and similar services.

Improvement of Payment Rates for Office-Based Behavioral Health Services

CMS is proposing an enhancement to rates that will have a positive impact on office-based behavioral health services with Medicare patients. By having a better understanding of overhead expenses they are proposing an increase to the payment structure for office-based face-to-face services with a patient.

Evaluation and Management (EM) Services

CMS maintains strict guidelines that specify the type of information that is required to support Medicare payment for each level of service category. There are three components that require a specific amount of documentation to support the level of an EM code; they include History, Physical Exam and Medical Decision Making (MDM). These guidelines have not been updated since 1997 and CMS recognizes that they may be outdated and in need of revisions. CMS is seeking comment from stakeholders regarding changes that would update the guidelines especially in the areas of History and Physical Exam.

Emergency Department (ED) Visits

CMS is seeking comment from stakeholders regarding whether ED visits are undervalued due to increasing diversity of the settings under which ED services occur and changes to the patient population.

Medicare Diabetes Prevention Program Expanded Model

The proposed rule also makes additional recommendations to implement the Medicare Diabetes Prevention Program (MDPP) expanded model starting in 2018. Additional policies are necessary for suppliers to begin furnishing MDPP services nationally in 2018 including the MDPP payment structure. Additional information on the expanded model can be found at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-07-13-3.html

Physician Quality Reporting System (PQRS)

Under PQRS, individual eligible professionals and group practices who did not satisfactorily report on quality measures in 2016 are subject to a PFS downward payment adjustment of 2.0 percent in 2018. 2016 was the last reporting period for PQRS and is being replaced by the Merit-Based Incentive Payment System (MIPS) under the Quality Payment Program (QPP). The first MIPS performance period is January through December 2017.

The rule is proposing a change in the current PQRS program policy (2016) that requires reporting of 9 measures across 3 National Quality Strategy domains to require reporting of only 6 measures for the PQRS as in the current MIPS program.

2018 Value Modifier

Proposed changes to the previously-finalized policies for the 2018 Value Modifier:

  • Reducing the automatic downward payment adjustment for not meeting minimum quality reporting requirements from negative four percent to negative two percent (-2.0 percent) for groups of ten or more clinicians; and from negative two percent to negative one percent (-1.0 percent) for physician and non-physician solo practitioners and groups of two to nine clinicians;
  • Holding harmless all physician groups and solo practitioners who met minimum quality reporting requirements from downward payment adjustments for performance under quality-tiering for the last year of the program; and
  • Aligning the maximum upward adjustment amount to 2 times the adjustment factor for all physician groups and solo practitioners.  

Patient Relationship Codes

In May 2017, CMS posted an operational list of patient relationship categories that are required under MACRA. In this rule, CMS is proposing the use of Level II HCPCS modifiers on claims to indicate these patient relationship categories. They are proposing that the HCPCS modifiers may be voluntarily reported by clinicians beginning January 1, 2018. A learning curve is anticipated regarding the use of these modifiers. More information can be found at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/Patient-Relationship-Categories-and-Codes-Posting-FINAL.pdf


CMS will accept comments on the proposed rule until September 11, 2017, and will respond to comments in a final rule due out in the fall of 2018. Additional information on the above outlined proposals and a more in-depth look at the proposed rule can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection