2018 Medicare Physician Fee Schedule Is Final – Here’s What Physicians Should Know

The Centers for Medicare and Medicaid Services (CMS) finalized the 2018 Medicare Physician Fee Schedule on Nov. 2, 2017. The 2018 Medicare PFS will take effect on Jan. 1, 2018.

As expected, physicians and physician practices expecting negative Value-based Payment Modifier (VBPM) payment adjustments in 2018 for quality performance in 2016 would see reduced penalties – or, in certain cases, no VBPM penalties at all – under the 2018 Medicare PFS.

CMS recently launched a "Patients Over Paperwork" initiative to reduce administrative burden and enable physicians to spend more time with patients. It says its new Medicare PFS was created with the goals of this initiative in mind.

Noteworthy provisions in the 2018 Medicare PFS include:

1.  Revised Value-based Payment Modifier (VBPM) Payment Adjustments—CMS is making these changes to previously-finalized policies for the 2018 VBPM:

  • Reducing the automatic downward payment adjustment for not meeting the criteria to avoid the PQRS adjustment from negative four percent to negative two percent for groups of ten or more clinicians; and from negative two percent to negative one percent for physician and non-physician solo practitioners and groups of two to nine clinicians.
  • Holding all groups and solo practitioners who met 2016 Physician Quality Reporting System (PQRS) criteria harmless from any negative VBPM payment adjustments in 2018.
  • Aligning the maximum upward adjustment amount to two times the adjustment factor for all physician groups and solo practitioners. 

2.  Revised Physician Quality Reporting System (PQRS) quality reporting requirements for 2016 performance—To better align with the new Merit-based Incentive Payment System (MIPS), CMS is making PQRS revisions for 2016 performance, including:

  • Reducing the PQRS reporting requirement of 9 measures across 3 National Quality Strategy domains to only require reporting of 6, with no domain or cross-cutting measure requirement. CMS is also making similar changes to the clinical quality measure reporting requirements under the Medicare Electronic Health Record Incentive Program for eligible professionals who reported electronically through the PQRS portal. 

3.  Diabetes Prevention Program—The Medicare Diabetes Prevention Program (MDPP) – a expanded, structured intervention with the goal of preventing progression from pre-diabetes to type 2 diabetes for at risk  individuals. The Medicare PFS establishes a payment structure for the model In the final rule, CMS has limited ongoing maintenance from the proposed two years to one year. This changes the payment structure and reduces the maximum performance based payment from 810.00 to 670.00. Get more details on the MDPP model here.

PAMED has collaborated with the American Medical Association in conjunction with the National Association of Chronic Disease Directors (NACDD) to promote and educate Pa. physicians on the National Diabetes Prevention Program (NDPP).  This initiative focuses on screen, test and referral (STR) of patients with and those who are at risk for pre-diabetes to CDC-recognized lifestyle change programs and the PreventDiabetesSTAT.org website.

4.  Appropriate use criteria for advanced diagnostic imaging—CMS' Appropriate Use Criteria Program was originally set to begin in 2019. Now, per the 2018 Medicare PFS, educational and operations testing will start in January 2020.  This delay will enable physicians an extended time for establishing with a qualified clinical decision support mechanism as well as voluntary reporting (July 2018-Dec 2019). Claims for advanced diagnostic imaging will be paid during the voluntary and educational and operations period regardless of whether they correctly contain information on the required AUC consultation. To incentivize an early adoption, clinicians can attest and earn credit under the MIPS as an improvement activity in 2018.

5.  Payment Update—The 2018 PFS conversion factor is $35.99, an increase to the 2017 PFS conversion factor of $35.89. 

6.  Patient relationship codes—Level II Healthcare Common Procedural Coding System (HCPCS) codes can be reported by clinicians on a voluntary basis, starting Jan. 1, 2018. This is an opportunity for physicians and practices to become familiar with the proper use of these modifiers.

7.  Payment rates for non-excepted off-campus provider-based hospital departments (PBDs)—CMS has finalized a 20 percent reduction of these rates, changing PFS payment rates for these services from 50 percent of the Hospital Outpatient Prospective Payment System (OPPS) payment rate to 40 percent of the OPPS rate. This affects outpatient departments that were not billing under the OPPS prior to Nov. 2, 2015, that are not located within 250 yards of hospital provider's main campus or remote location.

8.  Codes for Telehealth—CMS is eliminating the required reporting of telehealth modifier GT and finalizing separate payment for CPT code 99091, for certain remote patient monitoring. In addition, these new codes have been added:

  • HCPCS code G0296—For visit to determine low dose computed tomography (LDCT) eligibility
  • CPT code 90785—For Interactive Complexity
  • CPT codes 96160 and 96161—For Health Risk Assessment
  • HCPCS code G0506—For Care Planning for Chronic Care Management
  • CPT codes 90839 and 90840—For Psychotherapy for Crisis

9.  Payment for Office-Based Behavioral Health Services—The final rule will increase payment for these services by recognizing overhead expenses for office-based face-to-face services with a patient. 

10.  Payment for Tests on the Clinical Laboratory Fee Schedule (CLFS)—CMS says that the payment amount for a test on the CLFS furnished on or after Jan. 1, 2018, generally will be equal to the weighted median of private payer rates determined for the test, based on the data of applicable laboratories.

11.  Payment for Biosimilars Under Medicare Part B—CMS will separately code and pay for biological biosimilar products under Medicare Part B. Effective Jan. 1, 2018, newly approved biosimilar biological products with a common reference product will no longer be grouped into the same billing code. 

Additional Resources

For more details on the 2018 Medicare PFS, access CMS' Fact Sheet online here. A complete copy of the 1,250-page rule is available here.

Pennsylvania Medical Society Members with questions can also contact our Knowledge Center at 855-PAMED4U (855-726-3348) or KnowledgeCenter@pamedsoc.org.

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