Physician Payment and Reimbursement

CY 2019 Medicare Physician Fee Schedule Final Rule

December 4, 2018 3:18 pm

HFMA Executive Summary

The Centers for Medicare & Medicaid Services (CMS) published a final rule relating to payment policy updates under the Medicare physician fee schedule (PFS) for CY 2019, the Quality Payment Program (QPP), the Medicare Shared Savings Program (MSSP) requirements, the Medicaid Promoting Interoperability Program, and other policies in the November 23, 2018, Federal Register. The policies in the final rule take effect on January 1, 2019. For more information on the final rule, download Part I or Part II of a detailed summary, or the full text of the rule.

2019 Conversion Factor 
The conversion factor for CY 2019 is $36.0391, which reflects the 0.25 percent update adjustment factor specified under the Balanced Budget Act of 2018 (BBA 18), and a budget neutrality adjustment of -0.14 percent (2018 conversion factor $35.9996 x 1.0025×0.9986 = $36.0391). Calculation of the final 2019 conversion factor can be found in table 92 of the final rule.

  • The 2019 anesthesia conversion factor is $22.2730 (compared to CY 2018’s $22.1887), which reflects the same adjustments listed above, and an additional adjustment due to an update to the malpractice risk factor for the anesthesia specialty. 

Specialty Specific Impact
The most widespread specialty impacts of the relative value unit (RVU) changes are generally related to those for specific services resulting from the misvalued code initiatives, including the establishment of RVUs for new and revised codes. CMS notes that the estimated impacts for many specialties differ significantly between the proposed and final rules, due in large part, to it not finalizing its evaluation and management (E/M) proposal for 2019 that would have established a single E/M payment rate for new patients, and a single PFS rate for established E/M visits levels 2-5, as well as other adjustments. CMS estimates that the combined impact of the final rule policies range from an increase of 3 percent in payments for clinical psychologists, 2 percent for clinical social workers, interventional radiology, podiatry, and vascular surgery, to a decrease of 5 percent for diagnostic testing facilities, and 2 percent for independent laboratory and pathology.

Evaluation and Management Visits
CMS finalized several E/M visit proposals aimed at reducing burden and modernizing payment for E/M services for CY 2019 and CY 2021. CMS finalized the simplified documentation of history and exam for established patients, as proposed, as well as the elimination of required medical necessity documentation for furnishing a home health visit, effective January 1, 2019. Further implementation of payment, coding, and other documentation changes will continue in CY 2021. CMS did not finalize its proposal to extend the Multiple Procedure Payment Reduction policy to visits combined with same-day minor procedures, and the finalized payment changes will be modified and delayed until January 1, 2021.

Payment Rates for Non-excepted Off-campus Provider-Based Hospital Departments 
Since CY 2017, payment for certain items and services furnished in non-excepted off-campus provider-based departments has been made under the PFS using a PFS relativity adjuster based on a percentage of the OPPS payment rate. The PFS relativity adjuster for CY 2018 is 40 percent. Non-excepted items and services are paid at 40 percent of the amount that would have been paid for those services under the OPPS. In the final rule, CMS finalized the relativity adjuster at 40 percent for 2019, and beyond, until there is appropriate reason and process for implementing an alternative to the current policy.

Quality Payment Program (QPP)
The final rule establishes updates to the QPP for 2019, year three. For the 2019 Merit-based Incentive Payment System (MIPS) performance period, CMS adds 8 new MIPS quality measures, including 4 patient reported outcome measures, and removes 26 measures. CMS also modified performance category weights for the 2021 payment year, and made several changes to the criteria for an Alternative Payment Model (APM) to be considered an Advanced APM. Analogous changes are finalized for Other Payer Advanced APMs. CMS also finalized a modification of its proposal to revise the definition of a MIPS eligible clinician to include, beginning with the 2021 MIPS payment year, the following additional clinician types: physical therapist, occupational therapist, clinical psychologist, and a group that includes such clinicians. CMS adopts several scoring and measurement policies that increase the focus of the performance category on interoperability and improving patient access to health information. To better reflect this focus, CMS renamed the Advancing Care Information performance category the Promoting Interoperability (PI) performance category. CMS also finalizes its proposal for a new scoring methodology based on performance on individual measures. The goal of this scoring methodology is to provide increased flexibility to clinicians and enable them to focus more on patient care and health data exchange through interoperability.

Medicare Shared Savings Program (MSSP)

CMS finalized proposed changes to the quality performance measures in the Patient Experience of Care Survey measures, and CMS Web Interface and Claims-Based measures for the 2019 performance year (PY) and subsequent years. CMS finalizes several changes to the quality measure set used to assess quality performance of Accountable Care organizations under the Shared Savings Program, and notes that the changes would enhance patient and caregiver experience and better align with MIPS. CMS will reduce the total number of measures in the MSSP quality measure set by removing four measures. The entire quality measure set for the Shared Savings Program for PYs beginning with 2019 are displayed in tables in the final rule.

Medicaid Promoting Interoperability Program Requirements for Eligible Professionals 
CMS finalized without change its proposal to align the electronic clinical quality measures (eCQMs) for Medicaid eligible professionals (EPs) for CY 2019 with those available for MIPS eligible clinicians for the 2019 performance period by making the list of quality measures for Medicaid EPs the same as the list finalized for MIPS. CMS believes that aligning the eCQMs for the two programs will reduce burden for Medicaid EPs who are also participating in MIPS, and will encourage more EP participation in Medicaid. Medicaid EPs will report on any six eCQMs that are relevant to the EPs’ scope of practice. The reporting period for EPs in the Medicaid Promoting Interoperability Program will be for a full CY in 2019 for those who have demonstrated meaningful use in a prior year. For EPs demonstrating meaningful use for the first time, the eCQM reporting period will continue to be any continuous 90-day period consistent with existing rules.

Add-on Percentage for Certain Wholesale Acquisition Cost (WAC)-based Payments
CMS finalized its proposal to reduce the add-on percentage for Wholesale Acquisition Cost (WAC)-based payments for new drugs. Effective January 1, 2019, WAC based payments for new Part B drugs made under section 1847A(c)(4) of the Act, will utilize a 3 percent add-on. In the proposed rule, CMS noted that a fixed percentage is consistent with other provisions of section 1847A of the Act that specify fixed add-on percentage of 6 percent or 3 percent. CMS states that it plans to utilize a variable percentage that will use an add-on payment that is up to 3 percent to address the wide range of Part B drug prices. Because the policy has been finalized, CMS will issue Manual instructions addressing contractor pricing for new Part B drugs.  


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