Medicare Will Likely Face Pushback on Physician Pay Changes

Kerry Dooley Young

July 18, 2018

Federal officials will likely encounter some resistance to a proposed overhaul of Medicare's payment for evaluation and management (E/M) services, which could raise this reimbursement for some specialties while lowering it for others.

Anders Gilberg, senior vice president for government affairs for the Medical Group Management Association (MGMA), called this proposal a "bombshell" that the Centers for Medicare & Medicaid Services (CMS) tucked into its draft 2019 update of the physician fee schedule. E/M services make up about 40% of charges for Medicare's direct physician payment, meaning that any change in the billing approach will have a wide impact.

CMS Administrator Seema Verma has said the expected reduction in "documentation burden" from changes to Medicare's E/M codes should outweigh "any small negative payment adjustments." Gilberg had a different take, citing Table 22 of CMS' draft physician fee schedule, which is on page 367. It shows certain predicted effects of the new E/M proposal.

"It creates winners and losers among specialties," Gilberg told Medscape Medical News in an interview. "That's where potential battle lines will be drawn."

Obstetricians and gynecologists would be in line for the biggest potential bump — a 4% gain — from E/M changes, according to Table 22, while podiatry and dermatology would take the biggest hit — a 4% decrease. The table details what CMS expects would happen to payments under a proposed single payment rate for E/M patient visits for what are now classified as level 2 to 5 visits. The chart also factors in other variables, including technical adjustments to practice expense per hour value.

Under the scenario envisioned for Table 22, rheumatologists would be in for a 3% cut. Allergy/immunology and hematology/oncology practices, along with neurologists, would receive a less than 3% estimated decrease in overall payment, the table said. Nurse practitioners might see a 3% bump, while psychiatrists and physician assistants are among the group that might get a less than 3% increase in overall payment.

There would be minimal change in the overall payment for many fields, including cardiologists, family practice, and infectious disease experts, the table said.

CMS has been gathering feedback for months about changing the approach to E/M billing. The agency had a setback with a similar initiative during the Clinton administration, said Paul Rudolf, MD, who spoke on behalf of the American Geriatrics Society during a CMS call on March 21, 2018, about potential E/M changes. He cited his own experience at the agency when it sought to reduce E/M codes around 1999 and 2000.

"We failed miserably. No one could come to an agreement on changing the levels," he said. He predicted that a new effort to do so would be "a very difficult endeavor."

Risk for Certain Specialties

On the same call, consultant Jean Acevedo urged CMS officials to keep in mind the amount of time spent with patients during different kinds of visits in proposing E&M changes.

"Take a rheumatologist who's speaking with a young female, [a] newly diagnosed lupus patient who wants to get pregnant," she said on the March call. "[T]hat is a complex situation, and we need to make sure that we can still allow physicians to bill based on time."

Acevedo told Medscape Medical News in a recent email that she's still reviewing the proposed rule, but she said she's disappointed with CMS' approach. She cited among her concerns "the dramatic decrease in reimbursement [that] the suggested blended rate" could have on specialties such as rheumatology.

Angus Worthing, MD, chair of the Government Affairs Committee of the American College of Rheumatology, said that while the group appreciates CMS' attempt to reduce the burden of paperwork, it is concerned about the E/M proposal.

"E/M services are already undervalued relative to other physician services," he said in a statement for Medscape Medical News. There is a "risk that additional cuts would worsen the current rheumatology workforce shortage and add additional strain on patients' ability to access rheumatology care."

In a July 13 statement, the Community Oncology Alliance said the draft rule "severely undervalues the thorough and critical evaluation and management of seniors with cancer, especially life-threatening complex cases."

CMS already has signaled that it expects pushback on proposed E/M changes, for which it has a tentative implementation date of January 1, 2019.

The agency said in the draft rule that it's seeking comment on whether to delay the start date to January 1, 2020. CMS also said it's weighing suggestions about a potential multiyear switch that would give physicians and other healthcare professionals and their staff more time to prepare.

CMS says that its E/M plan would save clinicians an estimated 51 hours a year if 40% of their patients are in Medicare. The agency already has kicked off an effort to persuade clinicians that potential benefits from the E/M proposal outweigh possible drawbacks, including shaving of reimbursement levels.

CMS Physicians Tout Plan Benefits

Physicians who serve in top leadership posts within CMS appeared for a panel discussion broadcast on July 18 under Verma's @SeemaCMS Twitter handle. CMS Chief Medical Officer Kate Goodrich, MD, MHS, introduced herself as an internist and hospitalist who still practices in greater Washington. She said she knows personally the toll that administrative work can take on physicians, who often must spend parts of their evenings and weekends on documentation.

Physicians, nurse practitioners, and physician assistants now wrestle with decisions about how to categorize time spent with a patient with levels 2 to 5 of the Medicare E/M codes, Goodrich said. (Level 1 covers simpler tasks that can be handled by staff other than physicians.) She recalled how in her own practice, she had to mull how to categorize a visit.

"Once I have decided that, I have to go back and remember how many review of systems I need to document for, say, level 4, how many organ systems in the physical exam I have to document for level 3 vs 4 vs 5," Goodrich said. "I have to redocument often the past medical history, the family history, the social history, and, by the way, one of my nurses or a medical student may have already documented that or it was previously documented on a previous visit."

The CMS E/M proposal would "collapse" levels 2 through 5 of the E/M codes into a system with minimal document requirements and one single payment rate, Goodrich said. Physicians would then need to document what's currently associated with level 2. The change would allow clinicians "to focus their documentation on what's most important for the patient in front of them," while saving significant amounts of time, Goodrich said.

Goodrich is emerging as a point person on CMS efforts to overhaul E/M codes. She's a veteran policy leader within CMS, who began her work there during the Obama administration. She has already overseen the implementation of more than 20 programs on quality measures and value-based purchasing, putting her in contact with a wide network of medical associations. Her past assignments have included efforts to align quality programs across public and private sectors.

During the Twitter broadcast, Anand Shah, MD, MPH, the chief medical officer of CMS' Center for Medicare & Medicaid Innovation, said the plan to overhaul its E/M codes could be "transformational," with commercial insurers likely to follow the agency's lead.

"We certainly welcome and solicit feedback from private payers regarding our proposal," Shah said.

Goodrich also stressed that agency officials would read all comments formally made on the proposal. Comments are due on September 10, 2018. They can be submitted online through the site. The site offers a primer on how to give the most effective feedback through comments.

CMS is likely to get a robust response from the medical community. In his interview with Medscape Medical News, Gilberg of MGMA said it was "very bold" of CMS to try to use a payment rule to make such large changes in Medicare's payments to physicians. Other major changes to Medicare physician payment rules have tended to originate in new laws. MGMA knew CMS was looking at E/M codes but didn't expect the agency to move ahead with a plan of this sweeping scale, he said.

"You're going to see a lot of real strong support, and you're gonna see a lot of real concern," he said. "How that all plays out we're not quite sure yet because we're still learning more about it."

Gilberg said the draft rule would be a clear disappointment for many physicians in at least one sense. It doesn't deliver a change that MGMA, the American Medical Association, and other physician groups sought for the 2018 Merit-based Incentive Payment System (MIPS) reporting period.

AMA, MGMA, and other groups sent an April letter to CMS that sought a reduction from a full calendar year to a minimum of 90 consecutive days.

Virtual Check-ins

But CMS may get more clearly positive reactions to its plan to create a new Medicare payment through the 2019 physician fee schedule for what it calls "virtual check-ins."

Some private insurers have begun to consider similar proposals, said Steve Waldren, director of the American Academy of Family Physicians' Alliance for eHealth Innovation.

"They're just a couple of steps ahead. The majority of the pack is probably where CMS is now," Waldren told Medscape Medical News in an interview. "So it is fairly innovative for CMS to start thinking about these things differently."

In the draft rule, CMS proposed that the virtual check-in visit cover 5 to 10 minutes of medical discussion with established patients that did not originate from a related E/M service provided within the previous 7 days nor that led to an E/M service or procedure within the next 24 hours or soonest available appointment.

If "the brief communication technology-based service" stemmed from a related E/M service provided within the previous 7 days by the same healthcare professional, that service would be considered bundled into that previous E/M service and would not be separately billable, CMS said.

"We propose pricing this distinct service at a rate lower than existing E/M in-person visits to reflect the low work time and intensity and to account for the resource costs and efficiencies associated with the use of communication technology," CMS said. "We expect that these services would be initiated by the patient, especially since many beneficiaries would be financially liable for sharing in the cost of these services."

The agency is still in the process of figuring out how it would use this new code. It has requested feedback specifically on "whether it would be clinically appropriate to apply a frequency limitation on the use of this code by the same practitioner with the same patient, and on what would be a reasonable frequency limitation."

Although the agency has many details to iron out about virtual check-ins, this approach could make a major difference with respect to chronic disease, Waldren said. A physician may see a patient with diabetes, for example, five or six times a year. With an option for check-ins, it could become easier to schedule routine check-ins with a diabetes educator in a physician's office and provide more consistent support for habits needed to keep the disease in check.

"It makes sense with the continued migration toward value-based payment where the payment is starting to be decoupled from actually delivering a service," Waldren said. "It's really about you as a provider making sure that the patient is staying healthy."

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