A legal look at the 2019 Physician Fee Schedule

Recently, the Centers for Medicare and Medicaid Services (CMS) released its annual update for physician service payment rates.

The 2019 Medicare Physician Fee Schedule (PFS) contains changes that physicians should be aware of in order to formulate a fiscally responsible budget. Two areas of particular note are payments for new Medicare Part B drugs, which should not be surprising in light of other Congressional initiatives related to the 340B Program, and the methodology for paying for evaluation and management (E/M) services. The latter of the two areas received significant backlash from physician groups.

Effective Jan. 1, 2019, CMS reduced the add-on fee for Part B drug payments based on wholesale acquisition cost (WAC) from 6 to 3 percent. This payment reduction only affects new drugs.

Regarding changes to E/M services, there are two main objectives: reducing administrative burdens and improving payment accuracy. Initially, CMS proposed consolidating the E/M coding levels from five down to two. The final rule compromised and created three levels and phases in the new billing codes, which begin in 2021. Notably, CMS retained the code for the most complex payments, as physicians voiced concern that removing the codes would mean lower payments for complex cases. One item that received pushback was finalizing the proposed rule’s provision to reduce payments for E/M visits that occur on the same day as the procedure. For now, this provision remains the same.

Another positive for physicians related to the E/M services is that there is no longer a requirement to justify a home visit instead of an office visit. Physicians should note that medical necessity is still required. It’s critical to document the visit and services provided to receive reimbursement and avoid a potential whistleblower suit under the False Claims Act.

Physicians should stay tuned for the final rule due Nov. 23 and pay special attention to the reduction of payments for same-day E/M services as well as CMS’s comments.

Rachel V. Rose, JD, MBA, advises clients on compliance and transactions in healthcare, cybersecurity, corporate and securities law, while representing plaintiffs in False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rachel can be reached through her website, www.rvrose.com.