Medicare Proposes Major Physician Bookkeeping, Pay Changes

Kerry Dooley Young

July 12, 2018

UPDATED JULY 13, 2018  // Medicare unveiled a series of broad proposals today intended to pay physicians for more remote care and ease their recordkeeping burden, while also suggesting a cut in pay for certain newly introduced drugs that are administered in medical offices.

According to a letter from CMS Administrator Seema Verma, provided exclusively to Medscape Medical News, a large part of the new proposal targets wasted time. "Doctors today spend far too much of their time on burdensome and often mindless administrative tasks. From reporting on measures that demand that you follow complicated and redundant processes, to documenting lines of text that add no value to a patient’s medical record, to hunting down records and faxes from other physicians and sifting through them, wasteful tasks are draining energy and taking time away from patients," she said.

The letter was sent to physicians on July 16.

The Centers for Medicare & Medicaid Services (CMS) appears set to use the 2019 update of a rule for paying physicians to drive notable changes in the giant federal health program. For example, the agency is seeking, as a time-saver, to provide practitioners with new options for documenting office/outpatient evaluation and management (E/M) visits.

In addition, Verma noted on a call with reporters today that this is a major component of Medicare billing, with E/M visits making up about 40% of allowed charges for physician fee schedule services.

The billing changes proposed in the draft physician fee schedule are meant to reduce the time that physicians now spend on pasting and clicking information into electronic records that often has little clinical value, Verma said on the call.

She called the proposed recordkeeping and billing changes a "huge win" for physicians and patients. The goal is to allow more ease and convenience in interactions, such as having a physician check on a skin condition for a patient via Skype. Private insurers already promote such convenience in medical practice, she said.

"We want to make sure that Medicare beneficiaries are able to access the latest and greatest technology and innovation that's going on in healthcare," Verma said.

With the changes to the E/M documentation alone, "most specialties would see changes in their overall Medicare payments in the range of 1-2 percent up or down from this policy, but we believe that any small negative payment adjustments would be outweighed by the significant reduction in documentation burden.  If you add up the amount of time saved for clinicians across America in one year from our proposal, it would come to more than 500 years of additional time available for patient care, " Verma wrote in her letter.

Virtual Check-in

Verma also said CMS is planning another major shift that would allow more remote care. CMS is seeking to pay separately for two newly defined physicians' services furnished using communication technology: brief communication technology-based service, or a virtual check-in, and a remote evaluation of recorded video and images submitted by patients.

The agency also is proposing to adopt the updated direct practice expense (PE) input prices for supplies and equipment. CMS said it intends to phase in new direct PE input pricing over a 4-year period beginning in 2019 to ensure a smooth transition from the prices already included and the payments for the services that include them, to the final updated prices and payments in 2022.

In addition, Medicare is considering changes to how it pays for newly introduced drugs administered in physicians' offices, which are covered by Part B of the program. Part B drug payments are now pegged to a formula based on the reported average sales price (ASP) plus an add-on payment intended to 6%. (Federal budget sequester laws have shaved that amount in recent years.) This approach would continue for drugs already on the market, under CMS's proposal.

But for newly introduced drugs, CMS is seeking a new approach. Newer Part B drug payments can be based on wholesale acquisition cost (WAC). CMS noted that the WAC-based payment rates typically exceed rates based on ASP amounts. The agency thus proposes cutting the add-on for early WAC-based payments to 3% from 6%. This would be a temporary measure, occurring during an initial period of sales, before needed ASP information is available, CMS said.

The pharmaceutical industry and medical specialties that administer Part B drugs, such as oncologists, likely will have a vigorous response to this proposed limited change in the payment for these medicines. The Obama administration faced a furious protest from these groups when it made an unsuccessful bid to change how Medicare pays for Part B drugs.

Verma appeared to anticipate resistance to the proposal on the call. "We are open to suggestions and ideas," she said in reference to a question from a reporter on this point.

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