CMS Releases Final 2018 Physician Payment Rule

Rule includes policy changes affecting hospital outpatient departments, PQRS measures, telehealth services

November 10, 2017

The Centers for Medicare & Medicaid Services (CMS) issued its final rule for the physician fee schedule (PFS) for calendar year 2018. In addition to increasing physician payment rates for 2018 by an estimated 0.41 percent compared to 2017, the final rule makes a number of important policy changes, including in the areas of hospital outpatient departments in the context of Section 603 of the Bipartisan Budget Act of 2015, required measures under the Physician Quality Reporting System, payable telehealth services and the value modifier program.

Hospital outpatient departments

Unfortunately, CMS continued to make changes to its policy implementing Section 603 of the Bipartisan Budget Act of 2015, which impacts various provider-based, off-campus hospital outpatient departments (HOPDs). Under the statute and subsequent regulations, CMS finalized in its rules that services furnished in impacted HOPDs were no longer able to bill under the outpatient prospective payment system (OPPS), but under the physician fee schedule at 50 percent of its previous OPPS rate. The good news is that in its 2018 PFS rule, the agency did not finalize its proposal to cut payments even further—to 25 percent of the OPPS rate—for non-excepted services in 2018. However, the bad news is that CMS did finalize an additional cut for these services, taking reimbursement down from the current 50 percent of the OPPS rate to 40 percent of those rates.

WHA continues to believe the analysis CMS used to formulate this most recent payment cut is deficient. Further, WHA believes the way CMS operationalized Section 603 in 2017 is overly restrictive and negatively impacts hospitals and health systems from locating services where those services are needed. This is especially problematic for rural areas.

Reduction in PQRS measure burden

While data submission for the CY 2018 Physician Quality Reporting System (PQRS) has passed, CMS will retroactively lower the number of required measures from nine to six to more closely align the program with the new Merit-based Incentive Payment System that will affect payment starting in CY 2019. WHA expressed its support for this provision in a September 11, 2017 comment letter to CMS.

Other positive policy changes

In the final rule, CMS adds two new services to the list of telehealth services that are payable under Medicare: psychotherapy for crisis and counseling visits to determine low-dose computed tomography. In addition, CMS finalizes a policy to pay for the following services that are billed to Medicare as add-ons to codes already on the telehealth list:

      • Interactive complexity;
      • Administration of patient-focused health risk assessment instrument;
      • Administration of caregiver-focused health risk assessment instrument for the benefit of the patient; and,
      • Comprehensive assessment of and care planning for patients requiring chronic care management services.

CMS also lowers the maximum negative payment adjustment under the CY 2018 value modifier (VM) program from 4.0 percent to 1.0 percent for individual clinicians and groups of under 10 clinicians, and to 2.0 percent for groups of 10 or more clinicians. In addition, only those clinicians and groups failing to report data would experience a negative VM adjustment. WHA also expressed support for changes that reduced these penalties as providers transition to the new Quality Payment Program. Finally, the final rule delays until January 1, 2020, the appropriate use criteria program for advanced diagnostic imaging services.

This story originally appeared in the November 10, 2017 edition of WHA Newsletter