Physician Reimbursement

What you need to know about physician payment changes

On Nov. 1, 2019, the Centers for Medicare and Medicaid Services (CMS) issued a final rule that includes updates to payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule effective on or after Jan. 1. JHC asked the American Academy of Family Physicians (AAFP) and the Medical Group Management Association (MGMA) for their reactions.


JHC: For 2020, CMS will maintain the weights of the cost (15%) and quality (45%) performance categories for the Merit-based Incentive Payment System, or MIPS.

Background: Under the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, physicians earn a payment adjustment (up or down) based on evidence that they provided high-quality, efficient care supported by technology. To do so, they must submit information on “quality” (e.g., processes, outcomes), “promoting interoperability requirements” (e.g., electronic exchange of information), “improvement activities” (e.g., expanding practice access, promoting patient safety) and “cost” (i.e., the resources clinicians use to care for patients).

Gary LeRoy, M.D., president, AAFP: [Although the American Academy of Family Physicians had yet to formally respond to CMS’s final rule at press time] AAFP is likely OK with their decision to maintain the weights … given ongoing concerns with the cost category. One downside to maintaining the quality and cost weights is that there will be a more significant shift in those weights later, since – by law – they both must be 30% by the 2022 performance year.

Mollie Gelburd, J.D., associate director of government affairs, MGMA: MGMA is pleased to see that CMS maintained the category weights for 2020, particularly after originally proposing that the “cost” category be weighted at 20%. We have concerns about this category, because certain measures contain methodological flaws, whichinappropriately holdphysicians accountable for costs beyond their control. For example, the Total Per Capita Cost measure holds physicians responsible for the cost ofa patient’scare even after that patient is no longer in the physician’s care, but in the care of another physician. In addition, because CMS has not yet provided feedback on cost measure performance, clinicians can’t change their clinical workflows in order to become more efficient and improve category performance.Until CMS fixes these performance flaws and provides feedback, MGMAbelieves thecurrentMIPS category weights should be maintained.


JHC: Effective Jan. 1, CMS is increasing the performance threshold from 30 points to 45 points.

Background: Eligible Medicare Part B clinicians are scored on a 100-point MIPS performance scale. Payments are adjusted up or down based on the MIPS performance score. (These adjustments are applied to the Medicare payment for every Part B service billed by the clinician two years after the performance year.)

Mollie Gelburd: The performance threshold is critical, because if the physician’s score is lower than the threshold floor, then Part B payments are reduced; if the score exceeds it, payments are adjusted upward.


JHC: The 2020 Medicare Physician Fee Schedule introduces several changes regarding evaluation/management (E/M) services provided by doctors. Effective Jan. 1, 2021, changes to CPT codes will allow clinicians to choose the E/M visit level based on either medical decision-making or time.

Background: CMS is aligning its E/M coding with changes adopted by the American Medical Association Current Procedural Terminology (CPT) Editorial Panel for office/outpatient E/M visits. The CPT coding changes allow clinicians to choose the E/M visit level based on either medical decision-making or time, rather than on a combination of three variables: history, exam and medical decision-making. They also revise the time and medical decision-making process for all of the codes, and require performance of history and exam only as medically appropriate.

Gary LeRoy: Focusing on medical decision-making (MDM) or time as a single variable for choosing the level of service simplifies code selection. That said, the revised CPT interpretive guidelines for medical decision-making represent a significant change in the way physicians and coders are accustomed to thinking about MDM. They will require some study and education before they become effective on Jan. 1, 2021.

Likewise, the time element is changing significantly. Currently, it represents face-to-face time in the office or outpatient setting and can be used only to choose level of service when counseling and/or coordination of care dominates the encounter. In 2021 and beyond, the relevant time will be time on the date of service, not just face-to-face time, and it can be used to select level of service for any encounter, not just those dominated by counseling and/or coordination of care.


JHC: Regarding E/M services, the CPT coding changes retain 5 levels of coding for established patients, reduce the number of levels to 4 for office/outpatient E/M visits for new patients, and revise the code definitions.

Gary LeRoy: Given that physicians will be allowed to choose the level of service on medical decision-making alone, deleting CPT code 99201 [i.e., office or other outpatient visit for the evaluation and management of a new patient] and reducing the number of levels of new patient office/outpatient visits makes sense. This is particularly relevant since CPT codes 99201 and 99202 have the same type of medical decision-making, i.e., straightforward. In some sense, this will simplify matters for physicians, because they’ll have only four rather than five levels from which to choose. The impact should not be significant, since new-patient visits are less numerous than established patient visits, and level-one new-patient visits are among the least frequent of new-patient visits.


JHC: CMS is implementing several changes for “care management” services (i.e., “transitional care management,” “chronic care management” and “principal care management”). Regarding chronic care management (i.e., services provided to beneficiaries with multiple chronic conditions over a calendar month), a Medicare-specific code will be assigned for additional time spent beyond the initial 20 minutes allowed in the current coding.

Gary LeRoy: CMS’s creation of a code for additional time spent beyond the initial 20 minutes is consistent with a proposal that the AAFP and others submitted to the CPT Editorial Panel. We are supportive of it until such time as a similar code can be incorporated into CPT. The code will more appropriately compensate AAFP members for the additional time they and their staffs spend in support of patients with chronic conditions.


JHC: “Recognizing that clinicians across all specialties manage the care of beneficiaries with chronic conditions,” CMS says specialists can now bill Medicare for providing principal care management to patients with one complex chronic condition while the patient is receiving chronic care management services from a primary care doctor.

Gary LeRoy: [In its response to the proposed rule, the American Academy of Family Physicians commented] the addition of new principal care management (PCM) codes would move away from the continuous, comprehensive, and coordinated value-based care and primary care CMS has otherwise been encouraging as a cost-effective way to care for Medicare patients.

To the extent most Medicare beneficiaries have two or more chronic conditions for which AAFP members are already caring in a continuous, comprehensive, and coordinated way via existing chronic care management, I do not expect the creation of PCM codes by Medicare to have a significant impact on how AAFP members care for these patients.


JHC: Taking a step back, what is your organization’s reaction to these changes?

Mollie Gelburd: MGMA would like to see MIPS become more clinically relevant. Currently, our members see it primarily as a compliance program, that is, a means to either avoid financial penalties or gain additional reimbursement. But as they stand, the MIPS measures don’t further clinical goals. We believe reporting requirements should be aligned with clinical improvement as well as cost efficiency. In a well-functioning program, an investment in a practice’s clinical program would also be an investment in MIPS. As it stands, those two things are separate.

Editor’s note: For an overview of the major policies finalized for calendar year 2020, see CMS’s Finalized Policy, Payment, and Quality Provisions Changes to the Medicare Physician Fee Schedule for Calendar Year 2020.

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