Recently, CMS released final rules governing hospital outpatient facility and provider payments for calendar year (CY) 2020. To help you understand new payment changes and regulatory updates, we read through more than 2,500 pages and identified four key takeaways for imaging leaders and radiologists.
Hospital outpatient payments: CMS finalized a 2.6% increase in payment for hospital outpatient services, an increase from last year's finalized 1.35%.
Clinician payments: CMS finalized a $36.09 conversion factor for 2019, 5 cents greater than the 2019 conversion factor.
The estimated impact of all clinician payment changes finalized for 2020 means slight declines across radiology subspecialties.
What this means for radiology: Similar to recent years, payment rates will remain around zero or decrease for imaging providers, adding pressure to present financial strains. Imaging programs must continue to control costs and secure revenue to maintain slim margins.
2. Additional price transparency requirements coming in 2021
Likely the most buzz-worthy update centers around the push for price transparency, which comes in response to President Trump's executive order, released earlier in 2019. Despite pushback from the both hospitals and payers, CMS is forging ahead with proposals to require public disclosure of payer-specific rates for outpatient services.
In a separate rule released on November 15th, CMS significantly expanded upon the January 2019 requirements to post chargemaster prices online.
Beginning in 2021, hospitals will be required to post both payer-specific negotiated charges and discounted cash prices in a machine-readable file. Hospitals will also have to publically post these charges in an easily accessible manner for 300 "shoppable" services.
CMS identified 70 of these "shoppable" services, while hospitals are able to individually select the other 230. Importantly, 13 of the 70 services finalized by the agency are imaging procedures, shown below.
To monitor compliance, CMS plans to both independently audit hospital websites and evaluate complaints received from third parties. Providers will face a fine of $300 per day until they are either in compliance or provide a corrective action plan.
Providers are not the only organizations facing price transparency scrutiny from the agency, however, as CMS released similar proposals that would require health plans to provide personalized out-of-pocket cost information available to all beneficiaries through an online self-service tool. Payers would also be required to make public their negotiated rates with providers.
However, these price transparency rules may be blocked in court. The American Hospital Association, along with other hospital groups, has already filed a lawsuit against the price transparency requirements to disclose negotiated rates. The lawsuit alleges that the rule violates the First Amendment and that the HHS does not have the authority to require the disclosure of negotiated rates. For more information on how these price transparency changes and potential court battles may impact hospitals and payers read on here.
What this means for radiology: While legal challenges may delay or alter these price transparency requirements, CMS has made clear that it intends to drive greater price transparency and pull back the curtain on hospital-payer negotiations. If the agency is successful in forcing providers to disclose negotiated rates, radiology should expect to feel an early impact as it is often viewed as one of the most shoppable services.
3. Changes to E/M coding portend a likely decrease in diagnostic radiology payment beginning in 2021
The agency finalized multiple changes to the current E/M coding system designed to increase payment for services, but delayed implementation until 2021 to give providers time to prepare for the new system. As the agency is required to keep the rulemaking process budget neutral, these increases to E/M payment rates require reductions in payment for other services. As diagnostic radiology rarely provides E/M services, this will mean a large reduction in overall provider payment beginning in 2021.
What this means for radiology: Beginning in CY 2021, radiologists should expect to see a fairly significant decrease in overall payments, as these changes will adversely affect physicians who rarely bill for E/M. A CMS analysis on the specialty-level impact found that these changes would lead to an 8% decline in radiologist payment.
4. Despite recent court rulings, site-neutral payments expand as planned
The site-neutral payments policy mandates that newer off-campus HOPDs receive reimbursement at a site-specific MPFS rate, which is currently set at 40% of the hospital rate. Off-campus HOPDs acquired, opened, or built before November 1, 2015, are considered "excepted sites" and are not subject to this reduced rate.
Last year, CMS expanded the policy by instituting a phased two-year payment cut for code G0463, hospital outpatient clinic visits, across all off-campus HOPDs. This code saw a 30% reimbursement reduction in 2019. Despite a recent ruling striking down this code-specific approach to expansion, CMS plans to move forward and is considering appealing the final judgement.
What this means for radiology: The agency continues to view HOPD payments as a source of potential cost savings. While recent court rulings make expanding this policy a bit more challenging, it does not signal the end of site neutral payments. With this in mind, programs should consider how future cuts to HOPD payments may impact their freestanding growth strategy.
Other notable rulings impacting imaging:
- Rollout of MRI, CT cost center allocation changes: As planned, CMS will begin using all CT and MRI cost center claims data, including claims using the "square foot" allocation method. To address concerns that this would underestimate costs, the agency implemented a two-year roll out to give hospitals more time to update cost allocation methods. CMS will apply 50% of the payment impact from the transition in CY 2020 and 100% of the payment impact in CY 2021. If you haven't already, imaging leaders should adopt either the "dollar assignment" or "dollar value" cost allocation methods to avoid CT and MRI payment reductions.
- CDS education and testing year still to begin in 2020: Although not discussed in this year's rules, over the summer CMS released the specific G-codes and modifiers imaging programs must report on claims. Check out The Reading Room for the latest updates on CDS, and review our toolkit to learn how to document CDS consultation on Medicare claims.
- Expansion of Comprehensive-APCs (C-APCs): CMS continued its shift toward outpatient bundling with two new C-APCS: Level 2 Vascular Procedures, which impacts vascular radiologists, and Level 1 Neurostimulator and Related Procedures. Since these codes have been finalized, the total number of C-APCs has increased to 67.
- Physician supervision for physician assistant (PA) services: Consistent with recent efforts, CMS revised physician supervision requirements to provide greater flexibility and enable practices to function within state law and state scope of practice. In absence of state laws for physician supervision, CMS requires documentation in the medical record of the PA's approach to working with physicians in furnishing their services. For more insight on how to use PAs and other staff to better support imaging, review our recent blog.
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