2018 Medicare Physician Fee Schedule Summary

On November 2, 2017, the Centers for Medicare & Medicaid Services (CMS) issued their final rule that includes proposals to update payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2018.

CMS reported that the calendar year (CY) 2018 PFS final rule is one of several final rules that reflect a broader Administration-wide strategy to create a healthcare system that results in better accessibility, quality, affordability, empowerment, and innovation.

Conversion Factor and Impact to Radiology

CMS finalized a CY 2018 conversion factor of $35.9903, which reflects the 0.5 percent update specified by the Medicare Access and CHIP Reauthorization Act (MACRA), a budget neutrality adjustment, and a target recapture amount mandated by the Protecting Access to Medicare Act of 2014.  Overall, this is a slight increase from the current conversion factor of $35.8887.

ADVOCATE estimates the weighted effective overall impact of the 2018 MPFS to close to a 0% change from 2017 levels for diagnostic radiology, interventional radiology, and nuclear medicine.  Radiation oncology and radiation therapy centers are looking at an overall impact of a 1% increase.  The estimated impact to independent diagnostic testing facilities is a 4% decrease due to changes in the practice expense RVU.

PQRS Payment Adjustment

CMS proposed and is finalizing a change to the current PQRS program policy that requires reporting of 9 measures across 3 National Quality Strategy domains to only require reporting of 6 measures for PQRS with no domain requirement.  CMS is also finalizing similar changes to the clinical quality measure reporting requirements under the Medicare Electronic Health Record Incentive Program for eligible professionals who reported electronically through the PQRS portal.

CMS finalized these changes based on stakeholder feedback and to better align with the MIPS data submission requirements for the quality performance category.  For MIPS, eligible clinicians need only report 6 quality measures for the quality performance category, except those reporting via the Web Interface, and there is no requirement to ensure that the measures span across 3 National Quality Strategy domains.

Clinical Decision Support/Appropriate Use Criteria Program

CMS is finalizing a start date for the Medicare Appropriate Use Criteria (AUC) Program for Advanced Diagnostic Imaging. The program will begin in a manner that allows practitioners more time to focus on and adjust to the Quality Payment Program before being required to participate in the AUC program. The Medicare AUC program will begin with an educational and operations testing year in 2020, which means physicians would be required to start using AUCs and reporting this information on their claims. During this first year, CMS is proposing to pay claims for advanced diagnostic imaging services regardless of whether they correctly contain information on the required AUC consultation. This allows both clinicians and the agency to prepare for this new program.

CMS posted newly qualified provider-led entities and clinical decision support mechanisms in July of this year. Qualified provider-led entities are permitted to develop AUC, and qualified clinical decision support mechanisms are the tools that physicians use to access the AUC. Physicians may begin exploring these mechanisms well in advance of the start of the Medicare AUC program through the voluntary participation period that will begin mid-2018 and run through 2019. During this time CMS will collect limited information on Medicare claims to identify advanced imaging services for which consultation with appropriate use criteria took place.

In addition, by having qualified clinical decision support mechanisms available (some of which are free of charge) clinicians may use one of these mechanisms to earn credit under the Merit-Based Incentive Payment System as an improvement activity. This improvement activity was included in the 2018 Quality Payment Program final rule.

Payment Rates for Non-excepted Off-campus Provider-Based Hospital Departments Paid Under the PFS

For CY 2018, CMS is finalizing a reduction to the current PFS payment rates for certain items and services furnished by off-campus hospital outpatient provider-based departments by 20%.  CMS currently pays for these services under the PFS based on a percentage of the OPPS payment rate.  Specifically, the final policy will change the PFS payment rates for these services from 50% of the OPPS payment rate to 40% of the OPPS rate.  CMS believes that this adjustment will provide a more level playing field for competition between hospitals and physician practices by promoting greater payment alignment.

Mammography Reimbursement

In the 2017 MPFS final rule, there were 3 new mammography codes (77065, 77066, 77067) created that bundled mammography with CAD, when performed.  While there was some confusion as to whether CMS was going to accept the new set of codes or the existing G-codes in 2017, the final rule has clarified that by not including the G-codes in the Addendum B file.  Additionally, CMS does not explicitly address this in the text of the final rule but based on values in Addendum B, reimbursement rates for the new mammo codes essentially remains unchanged.

Evaluation and Management Comment Solicitation

There are three key components to selecting the appropriate level when assigning E/M visit codes:

  • History of Present Illness (History)
  • Physical Examination (Exam
  • Medical Decision Making (MDM)

CMS sought comment from stakeholders on specific changes they should make to update the guidelines, to reduce the associated burden, and to better align E/M coding and documentation with the current practice of medicine.

CMS thanked the public for the comments received in response to the proposed rule’s comment solicitation on the E/M guidelines.  Commenters suggested that CMS provide additional avenues for collaboration with stakeholders prior to implementing any changes.  CMS will consider the best approaches for such collaboration, and will take the public comments into account as they consider the issues for future rulemaking.

2018 Value Modifier

In order to better align incentives and provide a smoother transition to the new Merit-based Incentive Payment System under the Quality Payment Program, CMS is finalizing the following changes for the 2018 Value Modifier:

  • Reducing the automatic downward payment adjustment for not meeting the criteria to avoid the PQRS adjustment from negative four percent to negative two percent (-2.0 percent) for groups of ten or more clinicians; and from negative two percent to negative one percent (-1.0 percent) for physician and non-physician solo practitioners and groups of two to nine clinicians.
  • Holding harmless all physician groups and solo practitioners who met the criteria to avoid the PQRS adjustment from downward payment adjustments for performance under quality-tiering for the last year of the program; and
  • Aligning the maximum upward adjustment amount to 2 times the adjustment factor for all physician groups and solo practitioners.
  • Given final policy changes for the Physician Quality Reporting System and the Value Modifier, CMS finalized that they will not report 2018 Value Modifier data in the Physician Compare downloadable database as this would be the first and only year such data would have been reported. However, to promote transparency they will continue to make available the Value Modifier public use and research identifiable files.

Patient Relationship Codes Using Modifiers

In May 2017, CMS posted the operational list of patient relationship categories that are required under MACRA.  In the final rule, CMS finalized certain Level II HCPCS modifiers to be used on claims to indicate these patient relationship categories.  Further, CMS finalized a policy that the reporting of these HCPCS modifiers may be voluntary for clinicians associated with these patient relationship categories beginning January 1, 2018.  They anticipate that there will be a learning curve with respect to the use of these modifiers, and will work with clinicians to ensure their proper use.

Computed Radiology/Digital Radiology

The Consolidated Appropriations Act of 2016 added an amendment for a 7% reduction in payments for the technical component (TC) for x-rays taken using computed radiography technology furnished during CY 2018-2022 and for a 10% payment reduction for the TC of such imaging services furnished during CY 2023 and beyond.  The amendment has been finalized and states this will be communicated for claims paid under the MPFS through the use of a yet-to-be-established modifier.

As always, ADVOCATE will keep you up to date on this and all issues impacting radiology as they become available.

Lauren Sloan, MHA, RD, LD
Director of Regulatory Affairs