The 2020 Medicare physician fee schedule: An overview of provisions that will affect surgical practices

New payment policy, coding, and reimbursement changes set forth in the 2020 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, 2019, 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 office/outpatient visits

CMS finalized changes to its coding and reimbursement policies for office/outpatient evaluation and management (E/M) visits to align with those developed by the American Medical Association (AMA) Current Procedural Terminology (CPT) Editorial Panel. Beginning in calendar year (CY) 2021, the agency will retain the five-level office/outpatient E/M coding system for established patients and reduce the number of levels to four for new patient visits. CMS will adopt revised E/M code definitions created by the CPT Editorial Panel, which eliminate history and physical exam as elements for E/M code selection and allow physicians to choose the E/M visit level based on the extent of their medical decision making or on time spent with the patient. The agency also will implement an add-on code for office visits that are part of ongoing primary care and/or management of patients with serious or complex conditions.

Additionally, CMS accepted the AMA Specialty Society Relative Value Scale Update Committee’s (RUC)-recommended payment rates for office/outpatient E/Ms for CY 2021, which will increase the values of most of these services. However, the agency will not apply such increases to postoperative E/M visits that are bundled into 10- and 90-day global surgical packages.

The ACS commented extensively on this proposal and expressed its opposition to CMS’ failure to apply increases to standalone office/outpatient E/Ms to global surgical packages. The College’s comments stressed that this revaluation will disrupt the relativity of the MPFS because it will increase payment to certain specialties but not to others that provide the same services. CMS’ policy also will pay different specialties different amounts for the same work, which is prohibited by law. In addition, the agency ignored the recommendations of nearly all medical specialties when this policy was discussed at the RUC, which voted overwhelmingly to recommend that the full increase of work and physician time for standalone office/outpatient E/Ms be included in global codes. The College opposes any policies that unfairly result in lower reimbursement for surgeons and will continue to contest CMS’ failure to increase values for the E/M portion of 10- and 90-day global surgical packages.

Review and verification of medical records

CMS modified its existing medical record documentation regulations to specify that, when furnishing and billing for their professional services, physicians, physician assistants (PAs), and advanced practice registered nurses (APRNs) may review and verify (that is, sign and date) notes in a patient’s medical record that other physicians, residents, nurses, students, or other members of the medical team have made rather than fully redocumenting the information. This policy is applicable across the spectrum of Medicare-covered services paid under the MPFS in all settings.

In its comments on the proposed rule, the ACS supported this revision to physician medical record documentation requirements. However, the College also asked CMS to withhold changes to such requirements for PAs and APRNs until the agency established guidelines that clarify the circumstances in which these nonphysician providers (NPPs) would be permitted to review and verify medical records, such that NPPs may only sign off on notes made in the medical record by clinicians of the same provider type (for example, a PA may only review and verify information that another PA or PA student has included in a patient’s chart). The final rule indicates that CMS will not restrict the scope of medical record documentation that the billing provider may review and verify.

Coinsurance for colorectal cancer screening tests

CMS solicited comments on a proposal that would require physicians to give advance notice to patients scheduled for screening colonoscopies that coinsurance may apply should the “screening” procedure turn into a “diagnostic” procedure if polyps are discovered and removed during the service.

The ACS recognized CMS’ efforts to educate physicians and patients about cost-sharing obligations in order to mitigate instances of surprise billing but did not support the agency’s proposal to add to physicians’ administrative burdens with a new reporting requirement. The ACS said that the onus is on CMS—not on physicians—to inform its beneficiaries about any potential out-of-pocket expenses and encouraged the agency to develop resources that physician offices can distribute to inform patients about Medicare preventive services benefits, the information about colorectal cancer screening, and relevant details on cost sharing. The final rule indicates that CMS will conduct a comprehensive review of its outreach materials to determine whether Medicare policies on payment and coverage for screening colonoscopies can be made clearer and more accessible.

Medicare enrollment denial and revocation

Under existing law, CMS may revoke a physician’s Medicare enrollment if he or she has a pattern or practice of prescribing Part D drugs that is abusive, represents a threat to the health and safety of beneficiaries, or fails to meet Medicare requirements. The proposed rule called for expanding this law to ensure patient safety. The final rule permits CMS to revoke or deny a physician’s Medicare enrollment if he or she has been subject to prior action from a state oversight board, federal or state health care program, independent review organization, or any equivalent government body or program that oversees, regulates, or administers the provision of health care services if the underlying facts reflect improper physician conduct that led to patient harm. The agency specified that this policy would apply to all physicians in all settings under all Medicare programs for cases in which the physician’s behavior and the consequent patient harm was significant.

In its comments on the proposed rule, the ACS expressed concern that CMS’ patient harm provisions are inconsistent with the nationwide effort to reduce physician burnout, career changes, suicide, and the stigma associated with seeking treatment for substance abuse. The College noted that this policy might discourage physicians from self-reporting to medical boards because they may be reluctant to disclose behavior (such as drug use and alcoholism) that could result in action leading to a Medicare revocation. CMS acknowledged the ACS’ feedback and removed “required participation in rehabilitation or mental/behavioral health programs” and “required abstinence from drugs or alcohol and random drug testing” from its list of applicable actions under its policy.

The agency provided the following examples to illustrate how these new Medicare enrollment denial and revocation provisions would be enforced:

  1. Example 1: In a case involving patient harm, a state oversight board requires Dr. X to enter a rehabilitation program. The state’s order contains no other sanctions. Because the state’s action is restricted to rehabilitation, CMS’ denial and revocation policies would not apply.
  2. Example 2: In a case not involving patient harm, a state oversight board issues a decision pertaining to Dr. X that requires him or her to enter a rehabilitation program and imposes a fine on the physician. CMS’ denial and revocation policies would not apply because no patient harm was present.
  3. Example 3: In a case involving patient harm, a state oversight board issues a decision pertaining to Dr. X that requires him or her to enter a rehabilitation program and restricts his license for a 60-day period because of sexual misconduct. CMS would consider the board decision, under its denial and revocation policies, as applicable because of the license restriction based on sexual misconduct.

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 2020 will have a 0 percent impact on payment for general surgery services.

Table 1. 2020 MPFS estimated impact on total allowed charges for surgical specialties

Table 1. 2020 MPFS estimated impact on total allowed charges for surgical specialties

Conversion factor

The 2020 MPFS conversion factor (CF) is approximately $36.09, a 0.5 percent increase from the 2019 MPFS CF of $36.04. The 2020 CF reflects a statutory 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 2020 MPFS conversion factor

Table 2. Calculation of the 2020 MPFS conversion factor

*American College of Surgeons. CY 2020 Medicare physician fee schedule comment letter. Available at: Accessed November 6, 2019.

American Medical Association. CPT evaluation and management. Available at: Accessed November 6, 2019.

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