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CMS Delays E/M Payment Changes to 2021 in Physician Fee Schedule Final Rule

Analysis  |  By Steven Porter  
   November 01, 2018

The announcement coincides with the release of the 2019 Physician Fee Schedule and Quality Payment Program final rule.

A plan to simplify the way physicians bill Medicare for evaluation and management (E/M) visits has been finalized and will begin to take effect next year, but the controversial payment component of the plan will be delayed until 2021, giving stakeholders more time to influence policymaking, the Centers for Medicare & Medicaid Services announced Thursday.

The announcement coincides with the release of the 2019 Physician Fee Schedule (PFS) and Quality Payment Program (QPP) final rule.

"We know that this is going to have a tremendous impact on many doctors in America, and we want to make sure we get this right," CMS Administrator Seema Verma said Thursday during a call with reporters, adding that the two-year extension will afford time to incorporate additional improvements into the policy.

Related: What the Physician Fee Schedule's E/M Changes Mean for Providers

For decades, physicians have been billing Medicare for these E/M visits with a system of thorough documentation that many have argued is overly burdensome. So CMS proposed a dramatic overhaul last July. The simplified structure, as proposed, would enable practitioners to elect to document E/M visits based on the time spent with the patient or on their own medical judgment.

The proposal sought to transform the current five-tier E/M system into one with blended payment rates for office and outpatient visits billed at the second through fifth levels. But some doctors balked at this change, arguing that the relatively small time-saving change didn't warrant the planned reduction in payment. The American Medical Association praised efforts to reduce burnout-inducing red tape but cautioned that the proposed payment structure came with "a number of unanswered questions and potential unintended consequences."

In response to these comments and others, CMS finalized several items designed to reduce the regulatory burden on physicians, effective January 1, 2019, but other changes to documentation, coding, and payment would be implemented in calendar year 2021, according to a CMS fact sheet. The current coding and payment structure for E/M visits will continue, using either the 1995 or 1997 documentation guidelines.

Rather than collapsing all five tiers into one, as proposed, the final rule will collapse the first four tiers into one and preserve the fifth level "to better account for the care and needs of complex patients," the CMS fact sheet states.

Verma said the agency has finalized "the bulk" of the rule as proposed, but not all of it.

In light of the comments on the proposed rule, CMS opted against finalizing several controversial items, including reduced payment for E/M visits furnished on the same day as procedures, separate coding and payment for podiatric E/M visits, and standardized allocation of practice-expense relative value units (RVU) for certain codes, according to the fact sheet.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.

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