November 4, 2019 Advisory Board's take: 3 major themes in these changes

CMS on Friday issued a final rule to update the Medicare Physician Fee Schedule (MPFS) and Quality Payment Program (QPP) for calendar year (CY) 2020, which includes policies to shift QPP's Merit-based Incentive Payment System (MIPS) to a new conceptual framework and update evaluation and management (E/M) visit code definitions.

Final rule details

CMS finalizes changes to the fee schedule

CMS will increase the CY 2020 PFS conversion factor by five cents from $36.04 in CY 2019 to $36.09. There was no statutorily required update to the conversion factor this year, so the new rate reflects a budget neutrality adjustment based on changes to relative value units (RVUs).

CMS backpedals on changes to E/M visit payments

CMS finalized its revised approach to billing for evaluation and management (E/M) visit codes, which are a generic set of codes that most physicians use to bill routine visits.

CMS in prior rules had proposed collapsing the five-tier payment system for E/M visits into two blended rates, and had finalized a semi-blended approach last year. However, in response to provider pushback and new proposals from the American Medical Association (AMA), CMS chose to backtrack from those changes. Beginning in CY 2021, CMS will keep the five-tier system for established patients and move to a four-tier coding system for new patients.

CMS will adopt the revised E/M code definitions developed by the AMA's CPT Editorial Panel beginning Jan. 1, 2021. These CPT code changes revise the time and decision-making guidelines for each level, and only require documentation of patient history and a medical exam when clinically appropriate. They also allow physicians to select the appropriate level of visit based on the extent of decision-making in the exam or based on time spent with the patient.

CMS also will accept the AMA Specialty Society Relative Value Scale Update Committee's (RUC) recommended payment rates, which were set after the committee surveyed over 50 specialty types to find the average time they spent with patients for each billing level. In general, the survey showed that "office/outpatient E/M visits are generally more complex and require additional resources for most clinicians" than the previous rates had reflected.

CMS under last year's final rule also implemented a new "extended visit" code that allowed physicians to receive higher payment rates for spending additional time with patients whose visits were coded at level 2 through 4. Beginning in CY 2021, CMS will consolidate this add-on code to include visits involving primary care management that requires comprehensive care, as well as for non-procedural specialty care that is part of treating complex chronic conditions.

CMS will not adopt the RUC's recommended changes to global surgery codes. CMS in the rule said it is still evaluating data on the topic.

CMS finalizes changes to help the opioid crisis

CMS under the rule also will expand Medicare coverage for opioid use disorder treatment service through several new policies, including bundled payments, new telehealth services, and medication-assisted treatment (MAT) coverage.

For instance, CMS finalized the creation of a new Medicare Part B benefit for opioid treatment program services, including coverage for medication-assisted treatment (MAT). That means, beginning Jan. 1, 2020, opioid treatment programs that are accredited by the Substance Abuse and Mental Health Services Administration will be able to receive Medicare payments for MAT.

In addition, CMS will create bundled payments for the overall treatment of opioid use disorder (OUD), including care coordination, care management, psychotherapy and counseling activities, and toxicology testing. CMS also will add three new codes to support telehealth-based OUD treatment to the approved list of telehealth services.

CMS raises the performance threshold for QPP, transitions to MVPs

CMS also finalized a proposal to increase the minimum number of points clinicians must receive to avoid a negative payment adjustment under QPP's Merit-based Incentive Payment System (MIPS) from 30 points in 2019 to 45 points in 2020, and 60 points in 2021.

In addition, CMS said it will begin to transition MIPS to a new conceptual framework for MIPS, called MIPS Value Pathways (MVPs), in CY 2021. According to CMS, clinicians under MVPs will no longer report on MIPS' four performance categories (Quality, Cost, Improvement Activities, and Promoting Interoperability), and instead will report on a reduced set of measures that are:

  • More closely aligned with alternative payment models (APMs);
  • Outcome-based; and
  • Specific to a clinician's specialty or a given condition.

In response to stakeholder feedback, CMS decided not to finalize a proposal to increase the MIPS cost category weight for the CY 2020 reporting year from 15% to 20%. CMS said the weights will remain unchanged for CY 2020. However, CMS said it "will revisit increasing the weight of the cost performance category in next year's rulemaking to ensure clinicians are prepared for the significant increase in category weight by the 2024 MIPS payment year."

In addition, CMS did not finalize its proposal to increase "the additional performance threshold for exceptional performance to 80 points in 2020 and to 85 points in 2021." Instead, CMS finalized the additional performance threshold at 85 points for the 2022 MIPS payment year and 85 points for the 2023 MIPS payment year.

CMS also finalized a few changes for Advanced APMs, such as modifying the definitions of marginal risk and expected expenditures for Other Payer Advanced APMs.

CMS increases payment for transitional care management and expands the scope of PAs

Further, CMS finalized its proposal to increase Medicare transitional care management payments to recognize clinicians for the time spent managing a patient's care after the patient leaves the hospital. Beginning in CY 2020, CMS will pay clinicians for care management services for patients who have a single high-risk medical condition, such as diabetes or high blood pressure, as opposed to the multiple chronic conditions required to receive payments in the past. CMS also will create a new add-on code to pay clinicians for additional time spent on care management activities for patients with multiple chronic conditions.

In addition, CMS modified its regulations on physician supervision of physician assistants (PAs) with an aim toward allowing PAs to practice more broadly, in accordance with state scope-of-practice and other laws.

CMS in the fact sheet said the rule contains "broad modifications" to documentation policies that stakeholders have said require clinicians to re-document notes that already have been documented by other members of a patient's medical team. CMS said those modifications will allow "physicians, [PAs], nurse practitioners, clinical nurse specialists, certified nurse-midwives, and certified registered nurse anesthetists " to "review and verify (sign and date) … notes made in the medical record by other physicians, residents, nurses, students, or other members of the medical team" instead of re-documenting them.


AMA President Patrice Harris praised CMS' decision to finalize the new E/M billing framework. "This new approach is a significant step in reducing administrative burdens that get in the way of patient care," Harris said.

The Association of American Medical Colleges Chief Health Care Officer Janis Orlowski also praised CMS' E/M coding policy change. "These adjustments will allow providers to spend more time with patients and improve access to much-needed care for vulnerable patients and those with complex conditions," Orlowski said (LaPointe, RevCycleIntelligence, 11/1; Romoser, Inside Health Policy, 11/1 [subscription required]; AHA News, 11/1; CMS fact sheet [1], 11/1; CMS fact sheet [2], 11/2).

Advisory Board's take

Overall there were few surprises in this year's Physician Fee Schedule (PFS) final rule—and we didn't expect many. Across the rule, we saw many of the same themes we've come to expect from this administration:

  1. A focus on reducing clinician burden;
  2. Revisions to promote value-based care; and
  3. Policies to expand access to treatment for the ongoing opioid crisis.

But while the rule itself was largely what we expected, the details are more interesting.

Specifically, many of the changes to the PFS reflect the tension the administration faces between wanting to overhaul the system to reduce clinician burden, while also not alienating stakeholders by moving too quickly. For instance, in response to provider concerns about the E/M overhaul proposed (and somewhat finalized) last year, CMS is largely retaining the five levels of E/M coding (four for new patients) and increasing RVU values for outpatient E/M visits. This shift reflects a willingness to work with stakeholders in mostly keeping the current system. However, they also decided to push forward with this year's changes even after thousands of industry comments about how they could favor certain specialties. Therefore, the changes seem like an industry compromise.

CMS also made several improvements to care management codes like the Transitional Care Management (TCM) and Chronic Care Management (CCM) codes to better reward clinicians for providing value-based care. While these changes are notable, they will likely only be a stopgap for future, stronger changes. Finally, in tandem with numerous nationwide policies to address the opioid crisis, CMS finalized several proposals to expand access to opioid treatment services. Overall, the changes aim to make coding easier for providers, incentivize care management and ongoing office visits, and promote greater access to opioid treatment.

In the Quality Payment Program, CMS finalized changes which should continue to support CMS' goal for providers to take on more risk through the APM track. For those who remain in MIPS, reporting requirements and category weights will be largely the same. This is good news for clinicians because it's going to become much harder to avoid the MIPS penalty in 2020—when the performance threshold rises to 45 points. With penalties reaching 9% next year, clinicians in MIPS will have more skin in the game than ever before.

Therefore, we think 2020 will be a good time to refine your reporting strategies and maximize your score. This is a period of relative calm before next year, when the newly-finalized MIPS Value Pathways (MVP) proposal will overhaul the MIPS reporting option. We know these reporting changes will come in 2021, but with few details of the implementation finalized in this rule, we still know little about what to expect for the future of MIPS wholesale.

Want to learn more about all of these PFS changes? We'll be covering them in far more depth and outlining how your organization can best respond in the coming weeks. Register and bring your questions for our two upcoming sessions:

  • November 21st, 1 PM ET: Register for our 45-minute session for the most important takeaways of the 2020 MPFS final rule, including how we expect the rule to impact physician reimbursement and high-level changes to the QPP.
  • December 5th, 3 PM ET: Register for our 60-minute session for a deep-dive on the details of the 2020 QPP policies, action items, and how to prepare for success.