The 2019 Medicare physician fee schedule: An overview of provisions that will affect surgical practices

New payment policy, coding, and reimbursement changes set forth in the 2019 Medicare physician fee schedule (MPFS) final rule took effect January 1. The MPFS, which the Centers for Medicare & Medicaid Services (CMS) updates annually, lists payment rates for Medicare Part B services and introduces or modifies other regulations that affect physician reimbursement and quality measurement.

The American College of Surgeons (ACS) submitted comments September 10 in response to the CMS MPFS proposed rule issued earlier in the year.* Some provisions in the final rule, released November 1, incorporate changes that the ACS recommended. Although the final rule includes important payment and policy changes that affect all physicians, this article focuses on updates that are particularly relevant to general surgery and its related specialties.

E/M documentation guideline alternatives

CMS finalized a proposal intended to create flexibility in how evaluation and management (E/M) visit levels are documented but postponed the date that these alternatives will be offered for two years. Starting in 2021, CMS will allow clinicians to document Current Procedural Terminology (CPT) E/M codes using either the current 1995 and 1997 E/M documentation guidelines, by medical decision making alone, or by time alone.‡ §

A significant shortcoming of the 1995 and 1997 E/M documentation guidelines is that they overlook the needs of patients and how care is delivered. Consequently, the ACS strongly supports the availability of options for physicians to document E/Ms using methods beyond the 1995 and 1997 guidelines. For surgeons in particular, medical decision making is paramount for accounting for the medical complexity of the patient who may or may not be a candidate for surgical care. The ACS did not support the proposed use of time alone as a method of documentation without more clarification as to the amount of time necessary to ensure reimbursement of each E/M code.

E/M coding and reimbursement

CMS finalized changes to the payment rates for E/M codes in 2021. For office/outpatient visits, CMS will combine E/M levels 2, 3, and 4 for new patients into a single payment rate and will combine E/M levels 2, 3, and 4 for established patients into a separate single payment rate. CMS will create additional add-on codes for primary care and certain specialized services; however, the agency did not finalize other proposed modifications to payment for E/Ms including separate payment for podiatry visits, application of the multiple procedure payment reduction policy to E/Ms, and an E/M adjustment for practice expense relative value units (RVUs).

The ACS opposed these proposals because it was impossible to analyze the repercussions and potential distortions to the MPFS from these policies individually or as a whole during the 60-day comment period. The ACS also cannot support collapse of the work RVU values into one single rate under the MPFS because this amount is based on a calculation of several values, and CMS has offered no assurance that the underlying math used to derive this single value correctly reflects the resources used to deliver care across the spectrum of U.S. health care professionals. Furthermore, a number of other unknowns remain with regard to this policy, such as how the single payment rate for levels 2 through 5 will affect physicians compensated through RVU-based payment structures.

The ACS also opposed the finalized add-on codes for primary care and certain specialty care services, which may be used for all services provided by primary care practitioners and certain specialists. Although these codes are intended to provide additional payment for complex services, the add-on codes apply to certain specialties rather than the care of complex patients. Consequently, these codes will result in increased payment to certain specialties but not others that provide the same services.

E/M documentation burden reduction

CMS finalized several changes to E/M documentation requirements that are intended to reduce the administrative burdens associated with reporting these services. Two of these policy changes are as follows:

  • When relevant information is already contained in the medical record for an established patient, physicians may choose to focus documentation on what has changed since the last visit or on pertinent items that have remained the same, rather than re-recording elements of the patient’s history and physical exam that are still accurate and up-to-date.
  • For both new and established patients, physicians may forgo re-documenting the chief complaint and history that already has been recorded in the medical record by ancillary staff or the patient. Nonetheless, physicians must still indicate in the record that they reviewed and verified that information.

These changes were the result of ACS advocacy efforts over the last year aimed at reducing E/M documentation burden. The College supported these changes and commended CMS for implementing provisions that will ease documentation burden and remove redundancies in the clinical workflow.

Documentation guidelines for teaching physicians

CMS eliminated its requirement that teaching physicians personally document the extent of their participation in the review and direction of services furnished to each patient. The participation of teaching physicians in the provision of E/M services and procedures may be demonstrated by notes that residents, nurses, or other ancillary staff make in the medical record. Teaching physicians still will be responsible for verifying the accuracy of such notes, along with further documenting their participation in the medical record if the notes that other health care professionals make inaccurately demonstrate the physician’s involvement in the provision of the service.

In its comments on the proposed rule, the ACS supported CMS in the removal of potentially duplicative requirements for notations that may have previously been included in the medical records by other members of the clinical care team.

AUC for advanced diagnostic imaging services

CMS finalized that the appropriate use criteria (AUC) reporting program for advanced diagnostic imaging (ADI) services will begin January 1, 2020, with an “educational and operations testing period.” During the testing period, ordering physicians will be required to consult AUC using a qualified clinical decisions support mechanism (CDSM) when requesting ADI services, and furnishing physicians must report the AUC consultation information using a series of G-codes and modifiers on Medicare claims. CMS will continue to pay claims regardless of whether the correct information is included in the testing period, and notes that the purpose of the testing period is to allow physicians to participate in the program and avoid claims denials as they learn to comply with the new expectations. Physicians have the option to voluntarily begin reporting AUC consultations on claims July 2018 through December 2019 if they would like extra time to prepare for implementation of the program.

CMS also finalized the revision of the significant hardship criteria in the AUC program to include insufficient Internet access, electronic health record or CDSM vendor issues, or extreme and uncontrollable circumstances. Such criteria will be self-attested by the ordering physicians and sent to the furnishing physician, who will then append an appropriate modifier to the claim indicating that the ordering physician reported a significant hardship exception.

The ACS recommended that CMS carefully consider the extent to which the agency can continue to align the goals and requirements of the AUC program with the Merit-based Incentive Payment System to minimize burden and limit duplication of effort for quality measurement and reporting.

Overall impact on surgery

Table 1 shows the combined effect on total allowed charges of the changes in the work, practice expense (PE), and malpractice (MP) RVUs for all providers and various surgical specialties. The policies finalized for 2019 will have a 0 percent impact on payment for general surgery services.

Table 1. 2019 MPFS estimated effect on total allowed charges for surgical specialties

Table 1. 2019 MPFS estimated effect on total allowed charges for surgical specialties

Conversion factor

The 2019 MPFS conversion factor (CF) is $36.0391, an increase from the 2018 MPFS CF of $35.9996. The 2019 CF reflects a 0.25 percent update factor and a budget-neutral adjustment as set forth in section 1848 of the Social Security Act (see Table 2).

Table 2. Calculation of the 2019 MPFS conversion factor

Table 2. Calculation of the 2019 MPFS conversion factor

*American College of Surgeons. CY 2019 Medicare physician fee schedule comment letter. Available at: Accessed November 26, 2018.

All specific references to CPT codes and descriptions are ©2018 American Medical Association. All rights reserved. CPT and CodeManager are registered trademarks of the American Medical Association.

Centers for Medicare & Medicaid Services. 1995 documentation guidelines for evaluation and management services. Available at: Accessed November 26, 2018.

§Centers for Medicare & Medicaid Services. 1997 documentation guidelines for evaluation and management services. Available at: Accessed November 26, 2018.

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