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

Analysis  |  By Decision Health  
   November 02, 2018

The federal agency backed off on many of its ire-inducing proposals that would have drastically reshaped how it pays for and assesses the accuracy of E/M services.

Editor’s note: This excerpt was taken from an article that orignally appeared on Part B News, a sibling publication to HealthLeaders.

The Centers for Medicare & Medicaid Services hit the brakes on making imminent changes to the oft-used evaluation and management (E/M) code set that's tied to billions of dollars in medical practice revenue.

Streamlined payment rates are off the table for 2019, as are vast documentation revisions, according to the 2,378-page final 2019 Medicare physician fee schedule released Thursday.

That doesn't mean changes aren't coming January 1—or beyond. The federal agency plans to weave a number of smaller updates into the E/M payment and documentation picture in 2019 and will implement a broader array of changes in 2021, including a single-rate payment structure for certain new and established codes.

Following up on a proposed rule that left many in the medical practice profession holding their breaths, however, CMS backed off on many of its ire-inducing proposals that would have drastically reshaped how it pays for and assesses the accuracy of E/M services.

"Commenters largely objected to our proposal to eliminate payment differences for office/outpatient E/M visit levels 2 through 5 based on the level of visit complexity," CMS states in the final rule. Many commenters said they would experience pay cuts and generally let the agency know that the "aggressive" launch date that CMS proposed for January 1, 2019, was far too fast.

Instead, in 2019 and 2020, CMS will maintain separate payments for each distinct E/M code. Practices also will continue to use the current 1995 and 1997 documentation guidelines to guide their way. In a related case of standing-pat, podiatrists will not be singled out with a separate E/M reporting structure. In other words, it’s largely business as usual.

However, take note of some meaningful changes that CMS will adopt starting January 1:

  • For E/M visits, providers will not be required to re-enter information about the patient’s chief complaint and history that a staff member has already entered. Instead, the provider can indicate in the medical record that the information has been "reviewed and verified," CMS says.
  • For established office visits, providers can focus their documentation on changes since the last visit and "need not re-record the defined list of required elements if there is evidence" that the provider has already done so, an accompanying CMS fact sheet states.
  • For home visits, providers will no longer be required to prove explicit medical necessity when reporting a certain range of codes.

The agency believes these measures will provide "immediate burden reduction," something it has emphasized in recent rulemaking periods.

What it means for providers

For medical practices, changes to E/M services can have a big effect on financial health. E/M encounter codes for established patients make up a huge source of revenue for physician practices. In 2017, medical groups gained more than $13 billion on claims for codes 99211-99215. About 80% of that revenue is tied to just two codes—99213 and 99214—which account for most patient visits.

Many commenters called on CMS to take a more cautious approach, and CMS ultimately agreed.

"A delayed implementation date for our documentation proposals would also allow the AMA time to develop changes to the CPT coding definitions and guidance prior to our implementation, such as changes to MDM [medical decision-making] or code definitions that we could then consider for adoption," CMS states. "It would also allow other payers time to react and potentially adjust their policies."

Despite a two-year slowdown, CMS anticipates going full-throttle into 2021 with a series of major revisions to E/M coding, payments and documentation requirements.

Quality Payment Program changes

More types of providers will have to participate in the Merit-based Incentive Payment System (MIPS) of the Quality Payment Program (QPP). In 2019, physical therapists, occupational therapists, clinical psychologists, speech-language pathologists, audiologists, registered dietitians and nutrition professionals are eligible for the program. CMS had proposed including clinical social workers and nurse-midwives, but those types didn’t make the cut.

Small practices get some breaks in the 2019 QPP. Practices with 15 eligible clinicians (ECs) or fewer get a six-point bonus automatically in the Quality category. In addition, those practices still will be able to report Quality measures via claims. Starting in 2020 while larger practices get zero points for measures that do not meet data completeness—that is, that do not represent the required 60% of their patients for the period—measures submitted by small practices will continue to receive three points even if they don’t hit that target.

Also, small practices may be excused from the program if they can’t meet at least one of three criteria—$90,000 or less in Part B allowed charges for covered professional services; 200 or fewer Part B-enrolled beneficiaries; or 200 or fewer covered professional services under the fee schedule. But those who meet at least one of these criteria may opt in if they want.

As proposed for MIPS, 10 measures—four process-related, four patient-reported outcome and two patient-reported process measures—will be added to the Quality category; 26 measures were removed, as opposed to the 34 proposed to be deleted.

For 2019, participants must choose from nine Promoting Interoperability measures, complete six and also finish two bonus measures. Six new Improvement Activities are added, including “Comprehensive Eye Exams” and “Financial Navigation Program.”

Cost performance will be measured on total per capita cost versus Medicare spending per beneficiary as derived from Medicare claims. Participants also will have their Cost performance counted against eight new episode-based measures if they are attributable in any of 10 or more procedural episodes, such as Elective Outpatient Percutaneous Coronary Intervention (PCI), or 20 or more acute inpatient medical condition episodes, such as Simple Pneumonia with Hospitalization.

Quality is 45% of your score in 2019, cost 15%, Promoting Interoperability (the former Advancing Care Information) 25% and Improvement Activities 15%. The performance threshold to fulfill MIPS is 30 points; the additional performance threshold to be eligible for a bonus is 75 points.

The Advanced Alternative Payment Model (APM) alternative to MIPS gets a little tougher in some ways – for example, at least 75% of clinicians in the APMs must use up-to-date certified electronic health records technology (CEHRT), up from 50% this year. The revenue-based nominal amount for entry into the program will remain at 8% through 2024.

What do you think of the final rule? Let us know in this very short, confidential survey.

Editor’s note: This excerpt was taken from an article that orignally appeared on Part B News. Get every last detail on E/M changes and more from the final 2019 Medicare physician fee schedule with the one-hour webinar 2019 E/M Forecast: Prepare Your Practice for Fee-Schedule Changes on November 28. Register at

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