2019: New Year, New Physician Fee Schedule, and New Opportunities for Your Practice

With a new year freshly upon us, we would like to use this month’s Coker Connection article to analyze and explore the impacts of the 2019 Medicare Physician Fee Schedule (MPFS) Final Rule. Our regular subscribers may recall Jeannie Cagle’s September 2018 Coker Connection article that summarized the (then) proposed rule and listed potential concerns and considerations for leaders as the rule entered the comment and finalization phase. Well, a lot happened during that comment period as physicians, administrators, and healthcare professional societies inundated CMS’ inbox with feedback. The result of this process was an 852-page final rule that adjusted several key components of the proposed rule and laid out significant changes and additions to the E&M and Quality Payment Program landscapes. If you’re looking for a good read on a cold winter night, the final rule can be found here for your enjoyment. Today, we would like to review the short and long-term impact of these changes, as well as highlight potential opportunities for health systems that roll out this year. Additionally, we will analyze and model the impact of the highly-scrutinized 2021 E&M payment adjustments.

Summary of Fee Schedule Changes

‍Some of the immediate changes to the fee schedule can be found in the “Modernizing Medicare Physician Payment by Recognizing Communication Technology-Based Services” portion of the rule. Here, CMS introduces two new G-Codes (G2010 and G2012) to recognize provider efforts more adequately in conducting virtual check-in visits and also to account for remote evaluation of pre-recorded patient information. Additionally, the CY19 rule will implement codes for Interprofessional Internet Consultations (99451, 99452, 99446, 99447, 99448, and 99449), as well as Chronic Care Remote Physiologic Monitoring (99453, 99454, and 99457). Introducing these new codes is a clear indication that CMS has taken provider, patient, and health system feedback regarding “telehealth services” seriously. Further, the codes recognize advances in communication technology and its significant role in the modern patient-provider relationship. Our team views this portion of the rule as a positive step in the right direction for improving access to care while more appropriately compensating physicians and health systems for their work. Below in Figure 1, you will find some critical details regarding the wRVU values and current documentation guidelines to begin leveraging these codes in 2019.

Figure 1. New Codes Introduced for 2019 with Corresponding wRVU Values, Approximate Payment, and Documentation Notes

Implications of New Guidelines

In addition to introducing the new codes outlined above, the 2019 MPFS Final Rule also created new E/M documentation guidelines to streamline payment and potentially reduce clinician burden. CMS put together a concise summary of these new guidelines, which is available here. A few key takeaways include:

• For established patient visits, practitioners may choose to focus their documentation on what has changed since the last visit, or on pertinent items that have not changed, when relevant information is already in the medical record.
• For new and established patient visits, practitioners need not re-enter the patient’s chief complaint and history when they have already been entered by ancillary staff. The practitioner may simply indicate that he or she reviewed and verified this information.
• Teaching physicians will no longer be required to duplicate notations in the medical record that may have previously been documented by residents or other members of the medical team.

In general, we believe this reduced documentation burden could increase provider face-to-face time with their patients while also creating opportunities for more efficient scheduling and capacity management. Providers across the industry have widely appreciated this portion of the rule as it represents a long overdue change to a system that significantly contributes to practitioner burnout.While reducing documentation burdens will be a welcomed change for many practitioners, the 2019 MPFS Final Rule reduction in E/M payment variations at first glance may bring a little more heartache to physicians and administrators. As indicated in the American Medical Association’s response to the initial CMS proposal, many in the industry project that “compressed” rates may have unintended consequences, such as reducing overall reimbursement for those practitioners and specialties that treat more complex patient populations. Fortunately, CMS listened to this feedback and decided to delay the implementation of the new E/M payment rates until 2021 to allow the effects and implications to be evaluated further. Table 1, below, represents the shift in payment methodology as currently outlined by CMS. Additional detail can be found in the CMS summary document referenced above and also in the CMS payment table here.

Table 1. Current vs. 2021 Projected E/M wRVU Values and Payments

Some practitioners and administrators that review the table above may have concerns over the significant reduction in payment for Level 4 visits. Practices with a coding distribution that skews more to the Level 4 side of the curve may expect significant dips in revenue by 2021. Thankfully, the Final Rule did not compress Levels 2-5 as initially proposed in July 2018. We took a generic sample of visits for “Coker Medical Group” to illustrate the impact of these proposed rates in Table 2, below.

Table 2. Sample Impact of Proposed E/M Rates

Case Study Example

‍The 2021 proposed E/M payment rates could result in a revenue reduction of ~3.4% for Coker Medical Group. In an industry where reimbursement shifts constantly, and organizations are always asked to do more with less, 3.4% is a significant drop. Also, providers within Coker Medical Group will see a wRVU reduction of ~6.0%. This projection doesn’t have to be the new reality for Coker Medical Group as the simplified E/M rates are not the only component of the rule that will be implemented in 2021. CMS is also introducing several new add-on codes to account for visit complexity inherent with primary care and non-procedural specialty care E/M visits. Both codes, GPC1X (Primary Care) and GCG0X (Specialty), will have a wRVU value of 0.25 and will add approximately $13 to the payment rates for Level 2-4 visits. CMS projects that these codes may be added to all E/M visits within those guidelines, but that is subject to further review and analysis between now and 2021. If we take these two codes and add them to 50% of Coker Medical Group’s encounters, the results of the analysis are drastically different (see Table 3).

Table 3. Sample Impact of Proposed E/M Rates + Add-On Codes

Simply applying GPC1X and GCG0X to 50% of Level 2-4 visits improved Coker Medical Group’s 2021 net revenue outlook from -3.4% to +2.8%. The providers also saw a wRVU shift from -6.0% to +2.8%, which is far from the net-negative scenario described above. The model above excludes GPRO1, a newly-proposed extended services code that can be applied in addition to GPC1X and GCG0X. The intent of this exercise was not to predict or model every scenario in 2021 but rather to illustrate that CMS has provided opportunities to overcome some of the potentially negative impacts associated with simplified E/M payment rates. The providers and health systems that pay attention, communicate with their teams effectively, and begin to identify their own coding and schedule management efficiencies ahead of 2021 will be best positioned for success.

Finally, it is important to remember that these changes are currently only affecting Medicare reimbursement rates. As we move forward, practices and health systems will need to keep a close eye on whether other insurers in their market follow CMS’ lead. If history is any indication, these rules are likely to affect other components of a practice’s payer mix.For additional information and considerations, please check out our December Podcast "Espresso Shot" with Brandt Jewell and Alex Kirkland here.