During the first week of November, CMS released its annual finalized regulations for payments to hospital outpatient departments (HOPDs), paid under the Hospital Outpatient Prospective Payment System (HOPPS), and physicians, paid under the Medicare Physician Fee Schedule (MPFS). Our key takeaway from the two rules this year: CMS is taking clear measures to control outpatient spending.
To help cardiovascular service line leaders understand the new payment rates and what regulatory updates mean for the service line, we identified five major takeaways from this year's rulemaking.
1. Payment for cardiovascular services remain relatively flat
CMS maintained the 1.35% overall payment rate increase from 2018 for hospital outpatient services in 2019.
The finalized MPFS conversation factor for CY 2019 is $36.04—only a five cent increase from the 2018 factor. With the exception of vascular surgery, which saw a 2% average increase, average payment for cardiology and cardiovascular surgery remained flat[i]. Payments for specific services within each of these specialties may stray from aggregate payment updates. To search for national payment amounts by service, use Medicare's Physician Fee Schedule look-up.
Use our Hospital Outpatient APC Rate Calculator to access payment rates specific to your market
2. Site-neutral payments expand in CY 2019
In 2017, CMS implemented a site-neutral payment policy to mitigate reimbursement discrepancy between hospital outpatient departments (HOPDs) and off-campus facilities paid under the physician fee schedule (e.g., physician offices, freestanding clinics). The policy mandates all off-campus sites built after November 1, 2015 receive reimbursement at a site-specific MPFS rate, currently set at 40% of the hospital rate. As proposed, CMS maintained the 40% rate for CY 2019.
If you are interested in how this policy applies to your organization, please visit our updated site-neutral payment cheat sheet.
In a major effort to cut costs and ensure payment does not incentivize site-of-service decisions, CMS finalized a proposal to level payment rates for hospital outpatient clinic visits for assessment and management across all off-campus HOPDs, regardless of excepted status. To accomplish this, CMS is phasing in a significant payment cut for routine office visits (code G0463) at all off-campus HOPDs over the next two years.
These efforts could expand to off-campus hospital-owned emergency department (ED) claims in future years. At the start of 2019, CMS will track a new modifier (ER) to monitor how services are shifting to freestanding or off-campus emergency departments currently exempt from site-neutral payments. Back in 2016, CMS created a similar modifier (PO) for off-campus HOPD services, which was followed by site-neutral payment cuts on year later. The creation of the ER modifier could indicate further reductions in payment gaps.
Here are a few questions the Cardiovascular Roundtable has already received on these complex changes:
Q: What does this mean for cardiovascular programs?
Advisory Board analysis estimates that 72% of cardiology claims for code G0463 are currently furnished at exempt off-campus sites. The impact of this change will depend on your program's excepted status and exposure to code G0463.
While this new policy may reduce payment for programs, it will also lower out-of-pocket cost for Medicare beneficiaries. By 2020, beneficiaries will see a $14 reduction in copay at these outpatient clinic visits, which means the policy can be leveraged to acquire patients amid service expansion.
Q: How is this different than the proposed rule?
In response to public comments and a recommendation from MedPAC, CMS decided to phase payment cuts across a two-year period in order to give providers time to adjust to lower payment rates.
Phase one (2019): Excepted off-campus HOPDS will receive 70% of the HOPPS rate for code G0463, reducing average national payment from $116 to $81.
Phase two (2020): All off-campus HOPDs will receive 40% of the HOPPS rate for code G0463, reducing average national payment further down to $46.
Q: Will adding a service outside of an existing clinical family trigger a site-neutral payment rate at an excepted site?
CMS did not finalize the proposal to reimburse expanded services at a site-neutral rate due to potential administrative burdens. But this certainly won't be the end of site-neutral payments. CMS remains interested in limiting off-campus HOPD payments and are considering a few different methods for setting volume or payment caps in HODPs in the future.
3. CMS moves to simplify quality reporting
As part of the Meaningful Measures Initiative, CMS moved to reduce measure duplication and ease burdens of quality reporting. Eight measures will be removed from the mandatory Hospital Outpatient Quality Reporting (OQR) program between 2020 and 2021. One of these measures is median time to electrocardiography. To ease participation burdens, CMS has also lifted the notice of participation (NOP) prerequisite starting in 2020.
The ASC Quality Reporting Program (ASCQR) did not see quite as much movement this year as proposed. CMS decided not to remove four never-event measures and instead removed only two measures between 2020-2010.
CMS also took steps to refine quality performance categories of the Quality Payment Program (QPP), part of the Medicare Access and CHIP Reauthorization ACT (MACRA). For CY 2019, CMS added eight and removed 26 Merit-Based Incentive Payment System (MIPS) quality measures.
What you need to know about the 2019 MACRA final rule
CMS is still in considering future changes to the quality reporting rosters. Stay up to date with the Quality Metrics Trackers from our colleagues from the Data and Analytics group.
4. CV services moving further outpatient
CMS has made its feelings on sites of care clear. In the CY 2019 ASC (Ambulatory Surgery Center) final rule, the agency explicitly states, "we … encourage the migration of services to lower cost settings as clinically appropriate," and this year's rule making included a few changes that promote this sentiment.
Historically, CMS used what is called a Consumer Price Index (CPI-U) to update the ASC conversation factor that dictates ASC payment updates. But this methodology left reimbursement for ASC-based services trailing behind the same services in an HOPD. Beginning in 2019, CMS will adopt the same methodology, known as the Market Basket, used to set HOPPS rates in an effort to make ASC payments more competitive.
In addition to leveling payment for services performed at an ASC and HOPD, CMS for the first time added 12 diagnostic cardiac catheterization codes (HCOCS 93451-93462) and five related codes (HCPSC 93566, 93567, 93568, 93571, and 93572) to the ASC-covered procedures list. Along the same lines, CMS added reimbursement for insertable cardiac loop monitors in physician offices and confirmed that all of the procedures it added to the ASC list across the past three years will remain on the list.
Q: How can cardiovascular programs respond?
These additions expand provider opportunities to perform diagnostic catheterization services for Medicare patients in ASCs instead of limiting coverage to patients with commercial payers in select states. However, it is important to note that, while payments could come to an equilibrium in the coming years, as they stand, national ASC payment rates are far below services billed under HOPPS. For example, all 12 cardiac catheterization codes are reimbursed at $1,359 in an ASC, compared to $2,810 for the same codes in an HOPD. Similarly, national reimbursement for insertable cardiac monitors is only set at $5,399 under PFS and $7,404 under HOPPS.
The 2018-19 Cardiovascular Roundtable National Meeting includes a discussion on building a cost-effective, accessible ambulatory strategy based on your market dynamics. Join us to learn about how your program should be thinking about outpatient shifts.
5. E&M coding flattening impacts physician reimbursement
Physician reimbursement for evaluation and management (E&M) visits are currently split into five levels. Physicians receiver greater reimbursement for higher acuity patients or those that require more time and resources.
Similar to the collapsed payments for HOPD E&M visits implemented back in 2014, CMS will pay two flat rates—one for established and one for new patients for levels two through four—beginning in CY 2021. The level 5 code will remain separate.
Q: How have the documentation requirements changes?
In this section of the ruling CMS also simplified documentation requirements as part of the Patients Over Paperwork initiative, eliminating the need to re-record patient information in the hopes of reducing administrative burdens.
Q: When will this go into effect?
CMS initially proposed to replace levels two through five with a single level in CY 2019, but scaled back the changes in the final rule and delayed implementation for two years to begin in CY 2021.
Q: How will this impact cardiovascular patients?
While payment for new and established patients coded as level two or three will actually land slightly higher than in CY 2018, reimbursement for patients coded at level 4 will be significantly lower—down $37 per visit for new patients. Cardiovascular programs will be at the greatest risk when it comes to heart failure patients that are often coded at a level four.
Other noteworthy changes:
New codes for virtual interactions
Telehealth has been a hot topic in cardiology for years and beginning next year, CMS will reimburse for virtual communication with established patients. CMS added two new codes to the Physician Fee Schedule that will allow physician to bill for virtual check-ins and evaluation of patient-submitted photos and videos.
Clinical decision support moving forward as planned
CMS is moving forward with Clinical Decision Support (CDS) as planned. Starting in 2020, ordering providers or their clinical staff will be required to consult CDS for all outpatient advanced imaging exams. Its first year, 2020, will be an educational year, but by 2021, Medicare will deny claims (technical and professional) that do not include the appropriate consultative G-codes and modifier.
CMS delayed their proposal to implement a prior authorization requirement for outlying physicians. However, they intend to address outlier methodology in future rules. As a reminder, coronary artery disease (suspected or diagnosed) was on the list of priority clinical areas for identifying outlying providers in 2017, which means that cardiovascular service lines could be among the first providers held accountable for consulting CDS.
Click here for a detailed update on the CDS mandate.
New payment packaging for vascular procedures
CMS finalized three new Comprehensive Ambulatory Payment Classifications (C-APC), two of which are vascular procedures. Level 3 vascular procedures (C-APC code 5183) will be bundled with all adjunctive or supportive services and reimbursed at $2,641.52. Similarly, Level 4 vascular procedures and their adjunctive or supporting services (C-APC code 5184) will be reimbursed at $4,376.52.
Reimbursement cut for some 340B programs
The majority of 340B eligible sites will continue receiving the 340B reimbursement rate of ASP +6% for 340B acquired drugs. Starting in 2019, non-excepted HOPDS will be reimbursed at a rate of ASP -22.5%. Advisory Board analysis suggests that these changes will only impact 117 HOPDs; however, these changes could forecast greater changes to the 340B program in the future.
Expanded device intensive designation
This year, CMS updated rates and qualifications for device-intensive procedures. Historically the device's cost had to be greater than 40% of the total procedure's mean cost to receive device-intensive status. CMS has reduced this number to 30%, doubling the number of procedures with the designation, meaning a payment increase for all impacted procedures.
Expanded designations will have a significant impact on ASC-based procedures rate increases. For example, endovascular revascularization, one of the three highest-volume ASC-allowed device-intensive procedures, will see a 14.3% increase in payment from 2018-2019.
Your quick guide to site neutral payments
Site-neutral payments, also called payment leveling or payment equalization, refers to a reduction in Medicare reimbursement discrepancies related to facility ownership.
Read on to learn what sites will be impacted by site-neutral payments and how they're being implemented.
[i] Combined impact of work, practice expense, and malpractice RVU change