Medicare Reimbursement: CMS Proposes 2019 Physician Fee Schedule

On July 12, CMS issued its proposed Medicare physician fee schedule (PFS) rule for calendar year 2019. Although not yet finalized, the proposed Part B policy changes are sweeping and worth reviewing even at this early stage. Here are 5 of the key changes labs need to be aware of. Note that public comments are due on Sept. 10.

1. Physician Payment Rates 

CMS is proposing a 0.25% increase in physician payment rates. Using a 0.12% budget-neutrality adjustment required by law, CMS calculates the 2019 physician fee schedule conversion factor at $36.05, up from $35.99 in 2018.

2. Diagnostic Imaging Tests

Of immediate impact to labs is CMS’ proposal to allow diagnostic imaging tests to be furnished under a physician’s direct supervision instead of personal/in-the-room supervision) when performed by a radiologist assistant in accordance with state law and state scope of practice rules. Radiologist assistants would be required to personally perform the test and not supervise a technologist.

3. Changes to Evaluation/Management Coding and Payment

CMS is proposing several coding and payment changes designed to reduce administrative burdens and improving payment accuracy for E/M visits. Examples:

• Allow practitioners to review and verify certain information in a patient’s medical record that’s been entered by ancillary staff or the patient himself rather than having to re-enter the information themselves; and
• A new multiple-procedure payment adjustment that would apply when E/M visits are provided in conjunction with other procedures.

4. New Telehealth Payment Policies 

Besides paying physicians for their time when they check in with beneficiaries via telephone or other telecommunications device, CMS proposes paying physicians for the time it takes to review a video or image sent by a patient to assess whether a visit is needed.

5. Reduced “Add-On” Payments for New Part B Drugs

CMS proposes to reduce from 6% to 3% the “add-on” payment for new, separately-payable Part B drugs and biologicals that are paid based on wholesale acquisition cost when average sales price during first quarter of sales is unavailable.

OTHER PROPOSED CHANGES

Some of the other proposed changes in the new CFS potentially affecting labs include:

• Implementation of a Bipartisan Budget Act of 2018 provision pertaining to writing and signature requirements in certain compensation arrangement for purposes of Stark Law exceptions;
• Addition of mobile stroke units, renal dialysis facilities and the homes of ESRD beneficiaries as Medicare telehealth originating sites;
• Payment for new communication technology-based service codes; and
• Discontinuation of certain functional reporting requirements for outpatient therapy services and creation of payment modifiers for services furnished by therapy assistants, which will be paid at 85% of the applicable Part B payment.
• Changes to the definition of “applicable laboratory” for clinical laboratory fee schedule purposes.

No Changes to OPPS Site-Neutral Payment Policies
One of the key takeaways from the CMS proposal is what is not changing, namely, the site-neutral payment policies under Section 603 of the Bipartisan Budget Act. Much to the consternation of hospital groups, the agency is proposing to continue allowing nonexcepted provider-based departments to bill for nonexcepted services on the institutional claim and maintain payment for nonexcepted services at 40% of the OPPS amount for calendar year 2019. Section 603 requires, with the exception of dedicated emergency departments, services furnished in off-campus provider-based departments that began billing under OPPS on or after Nov. 2, 2015 no longer be paid under OPPS, but under another applicable Part B payment system.