Policy & Regulation News

CMS Releases Physician Fee Schedule, OPPS, Pushes Site-Neutral Pay

The final rules for the 2020 Physician Fee Schedule and Outpatient Prospective Payment System (OPPS) will modify E/M payments and implement phase 2 of site-neutral payments.

Medicare Physician Fee Schedule and Outpatient Prospective Payment System (OPPS)

Source: CMS

By Jacqueline LaPointe

- CMS recently finalized the final rules for the Medicare Physician Fee Schedule and the Outpatient Prospective Payment (OPPS) in 2020. The rules will notably retain all five levels of evaluation and management (E/M) services, implement the second phase of site-neutral payments, and modify Quality Payment Program reporting.

The federal agency intends for the two final rules to advance the Trump Administration’s efforts to modernize Medicare billing and put patients over paperwork.

“President Trump has a particular vision for healthcare: a system that’s affordable, patient-centric, and treats you like a person, not a number. CMS is working to deliver that by freeing up clinicians to focus on their patients rather than on paperwork,” HHS Secretary Alex Azar stated in an announcement.

Specifically, Azar believes changes to the E/M billing requirements in the final rule for the Medicare Physician Fee Schedule will push the administration’s efforts further.

CMS proposed in earlier rules to collapse the five levels of E/M billing codes to reduce the administrative burden of Medicare Physician Fee Schedule billing. However, after facing industry backlash, the agency did not move forward with the proposal and the final rule for the Medicare Physician Fee Schedule in 2020 will retain the five levels of coding for established patients but reduce the number of levels to four for office/outpatient E/M visits for new patients.

The final rule will also increase payments to physicians for office and outpatient E/M visits and provide enhanced payments for certain types of visits.

“Clinician burnout is high because outdated government regulations are diverting their attention from what matters: patient care,” CMS Administrator Seema Verma said in the announcement. “The Trump Administration’s final rule brings antiquated requirements, which are over 20 years old, up to date with the current practice of medicine and will impact the current and future generation of clinicians.”

Other key policy updates in the Medicare Physician Schedule rule include:

  • Conversion factor of $36.09, a modest increase of $0.05 compared to 2019
  • Addition of new telehealth service codes
  • Revision to the supervision requirement for physician assistants that will give the providers greater flexibility to practice at the top of their license
  • A payment boost for transitional care services and existing payments for chronic care management services
  • Implementation of the Merit-Based Incentive Payment System (MIPS) Value Pathways reporting system

In the final rule for the 2020 OPPS, CMS also finalized site-neutral payments for hospital outpatient departments despite a federal court tossing the policy earlier this fall.

The federal agency stated in a fact sheet that the government still has appeal rights. Therefore, the second phase of site-neutral payment implementation for clinic visits will move forward according to policies in the 2020 OPPS final rule.

CMS expects the expansion of site-neutral payments to save $800 million in 2020 by lowering the rates paid to hospital outpatient departments for services that can safely be delivered in the physician’s office, which is a lower-cost setting.

The final rule will also continue to pay hospitals in the 340B Drug Pricing Program using a new payment formula that reimburses hospitals the average sales price less 22.5 percent for qualifying outpatient drugs. A federal judge also struck down the rule finalizing the new payment formula.

The final rule for the 2020 OPPS will also:

  • Boost payment rates by 2.6 percent
  • Remove total hip arthroplasty, six spinal surgical procedures and certain anesthesia services from the Inpatient Only list
  • Use the post-reclassified wage index for urban and rural areas as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment standardized amount
  • Modify the generally applicable minimum required level of supervision for hospital outpatient therapeutic services furnished by all hospitals and CAHs from direct supervision to general supervision
  • Create an alternative pathway to qualify for device pass-through payment status for transformative devices that have an FDA Breakthrough Device designation
  • Add new prior authorization requirements for blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty, and vein ablation