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Does the Medicare Physician Fee Schedule Undervalue Primary Care?

The AAFP contended that the proposed 2018 Medicare Physician Fee Schedule underpays primary care providers because of inaccurate E/M code valuation.

Medicare Physician Fee Schedule and primary care

Source: Thinkstock

By Jacqueline LaPointe

- CMS continues to put the revenue of primary care providers at risk by undervaluing codes for primary care and failing to meet the misvalued code target required by law in the proposed 2018 Medicare Physician Fee Schedule update, the American Academy of Family Physicians (AAFP) recently argued.

The federal agency is charged with ensuring that relative value units (RVUs) used to determine Medicare reimbursement rates “reflect relative resource use.” Federal law also mandates that CMS meet a minimum net expenditure reduction by pinpointing misvalued codes.

However, the proposed 2018 Medicare Physician Fee Schedule update failed to meet the misvalued code target, which would result in providers not receiving the full 0.5 percent update in 2018.

Instead, Medicare providers would see a 2018 conversion factor of $35.99, representing a 0.31 percent, or $0.10, increase from the previous year’s conversion factor.

“[F]or the third year in a row, the AAFP is very disappointed and cannot understand why CMS has failed to achieve the required, minimum net expenditure reduction through identifying misvalued codes,” Wanda Filer, MD, MBA, AAFP Board Chair, wrote to CMS Administrator Seema Verma.

READ MORE: The Difference Between Medicare and Medicaid Reimbursement

The modest conversion factor increase will particularly stress primary care providers who perform about one in five of all office visits, the organization stated.

“Family physicians already operate on slim financial margins and the AAFP remains very disappointed that CMS was unwilling or unable to identify and reduce a sufficient amount of overly inflated codes,” Filer wrote.

Since CMS did not decrease overvalued RVUs for misvalued codes as required by law, the federal agency should have “taken steps to reduce the impact on primary care services which are known to be undervalued until the agency could meet its statutory requirement.”

The industry group pointed out that evaluation and management (E/M) codes represented a significant challenge for primary care providers. CMS should update the 1995 and 1997 documentation guidelines for E/M services.

“The AAFP continues to believe that the current E/M code set is inadequate to describe the range of E/M services provided by different specialties,” the group explained. “We believe its structure and valuation particularly disadvantage primary care, which rely most heavily on E/M codes. CMS currently undervalues E/M codes and other primary care services.”

READ MORE: Why Primary Care Matters in Medicare Shared Savings Program

The guidelines are a burden for primary care providers because they focus on coding and justifying reimbursement rather than patient care. As a result, provider time shifted away from direct patient care.

A 2016 Annals of Internal Medicine study revealed that providers spent 37 percent of their time in the examination room on EHR and desk work, with much of the documentation time spent on complying with E/M guidelines.

Providers may spend an inordinate amount of time on E/M documentation because the guidelines do not support primary care provider workflows, AAFP added.

“The Guidelines are both overbroad and under-inclusive—overbroad because, as CMS notes in the proposed rule, they include detailed specifications for what must be performed and documented for the history and physical exam (for example, which and how many body systems are involved) without respect to the nature of the patient’s visit; under-inclusive especially for primary care because they do not adequately support the documentation of the management of multiple chronic conditions—which is common in family medicine,” Filer wrote.

As value-based care centers on primary care, providers are seeing more medically complex patients because they act as a patient’s main care coordinator. However, the single-problem visit structure of the E/M codes does not fit the evolving role of primary care providers in alternative payment models.

READ MORE: Key Ways to Improve Claims Management and Reimbursement in the Healthcare Revenue Cycle

In addition, the guidelines are outdated because they do not account for EHR adoption, causing usability issues.

“The clinically relevant documentation leads to more clicking, and physicians are being asked to perform additional data capture for quality measurement and for recording the key clinical data needed for care delivery,” the group explained. “Any subsequent physician now must wade through the extra documentation to find the key clinical data, as EHRs are not currently smart enough to discriminate between clinically relevant and non-clinically relevant components of the record.”

The guidelines also do not account for team-based care under value-based purchasing models because the rules prohibit clinical staff from recording data within the medical record. The function is reserved for physicians only.

To alleviate the burden of E/M documentation for primary care providers, AAFP urged CMS to eliminate documentation guidelines pertaining to history, physical exam, and medical decision-making.

While CMS works to update the guidelines to support value-based primary care, the federal agency should immediately revise the rules to read:

The medical record may be recorded by any staff involved in the patient’s care or by the patient, as appropriate. To document that the physician reviewed the information, there must be a notation supplementing or confirming the information recorded by others.

The industry group warned CMS that failing to accurately value E/M codes and other primary care services will result in payment deficiencies under MACRA for primary care providers.

To correctly identify inflated and undervalued codes, CMS also should “not kowtow to the Relative Value Scale Update Committee (RUC),” the group continued. The RUC contains physicians who provide recommendations to CMS on fees for services paid under the Medicare Physician Fee Schedule.

AAFP argued that CMS has failed to “live up to its obligation” of ensuring that RVUs reflect relative resource use because the federal agency included all but one of the RUC’s recommendations for the 2018 Medicare Physician Fee Schedule.

“We are deeply disappointed in CMS’ new approach to valuing codes under the Medicare physician fee schedule,” Filer stated. “Section 1848 of the Social Security Act charges CMS, not the RUC, with the responsibility to set work RVUs under the Medicare physician schedule. From our perspective, CMS is abandoning that responsibility by wantonly accepting the RUC’s recommendations, even where it recognizes those recommendations are inconsistent with the time and intensity paradigm of physician work.”

CMS noted in the proposed rule that officials relied heavily on RUC recommendations because they believed that most clinicians reimbursed through the Physician Fee Schedule would prefer updates based on the advisory group’s suggestions.

Whether the belief is true, CMS should not act subservient to the RUC, AAFP advised. Rather, the federal agency should evaluate the recommendations and implement appropriate modifications to Medicare reimbursement rates.


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