Providers Oppose Collapsing Medicare Reimbursement for E/M Visits

September 12, 2018 - Providers are calling on CMS to not finalize a proposal to collapse Medicare reimbursement for evaluation and management (E/M) visits into a single, blended payment rate for E/M Levels 2 through 5 visits.

In a recently proposed rule for the 2019 Medicare Physician Fee Schedule, CMS proposed the Medicare reimbursement change for E/M visits to improve payment accuracy and simplify documentation. If finalized the rule would only require providers to apply a minimum documentation standard.

The new standard would require clinical documentation to support a level 2 E/M visit. The documentation must include a Current Procedural Terminology (CPT) visit code for history, exam, and/or medical decision-making to qualify for the single blended payment rate.

Providers would also be able to use supplementary codes to further describe the E/M visit, the proposed rule added.

“CMS and the Office of the National Coordinator for Health Information Technology (ONC) have heard from stakeholders that CMS’s extensive documentation requirements for Evaluation and Management codes have resulted in unintended consequences,” CMS stated.

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“To meet these documentation requirements, providers have to create medical records that are a collection of predefined templates and boilerplate text for billing purposes, in many cases reflecting very little about the patients’ actual medical care or story.”

However, providers disagree that updating the Medicare reimbursement policy is a sound method for reducing the administrative and documentation burden associated with E/M visits.

“Providing physicians with a choice in how to document beneficiary E/M visits would be a welcome development,” stated AMGA President and CEO Jerry Penso, MD, MBA. “It indicates CMS is serious about addressing administrative burden, particularly since these billing codes represent nearly one-third of all Medicare physician visits. Unfortunately, pairing paperwork reforms with a significant change in categorizing patient complexity and reimbursement may very likely undermine care quality and coordination and cause disruption in physician workflow and referral patterns.”

The AMGA told CMS in a recent comment letter that the agency is “confounding two separate issues.”

“Documentation requirements are unrelated to the complexity of the beneficiary's care needs as represented by a billing code,” the industry group wrote. “A Medicare beneficiary's health neither improves nor deteriorates based on how accurately or not a provider documents health status.”

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The American Hospital Association (AHA) agreed that collapsing the Medicare reimbursement rates in the name of documentation simplification would have unintended, negative consequences on patient care.

“By reducing payments for many providers, the proposal to collapse the payment rates for E/M visits devalues providers’ time, increasing the already heavy pressure they face to maximize the number of patients they see each day,” the hospital association recently wrote to CMS.

“Providers also may have to reduce the time they spend with patients if the additional time needed to fully treat more complex patients no longer earns payment commensurate with that time,” the association added. “This could incentivize providers to instead see patients multiple times for the same issues or divert them to higher cost settings such as emergency departments (EDs), increasing care fragmentation and undermining the transition to value-based care.”

The proposed changes to E/M payments would also have negative effects on provider revenue, Aledade reported in its comments on the proposed rule.

The value-based care company best known for their work with accountable care organizations (ACOs) analyzed how the proposed Medicare reimbursement rates would impact 213 of its physician practice partners. The study of over 771,000 claims from 2017 showed:

• Practices would lose an average of 2.3 percent of their revenue from the new E/M codes without the use of proposed supplementary codes
• With the addition of the primary care-focused supplementary codes, practice would gain 3.2 percent in revenue on average
• Practice level effects significantly varied between negative 19 percent to positive 41 percent
• To mitigate the negative effects on 99 percent of the practices, the extended time supplementary code would have to be billed on 29 percent of Levels 4 and 5 visits

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“This variation creates substantial revenue uncertainty for practices,” Aledade stated. “Considering Medicare’s limited effect on overall documentation requirements faced by a practice and this uncertainty, we do not believe that payment rates are an appropriate tool to reduce physician documentation.”

The AHA added that specialists may particularly experience negative spillover effects from the collapsing of E/M payment rates.

“Further exacerbating this underestimation is the fact that many specialists who would experience payment cuts due to the collapsed E/M payment rates could also see significant cuts to their payment for other, non-E/M services,” the hospital association explained.

“The spillover effect of CMS’s proposal contributes to the dramatic reduction in the Indirect Practice Cost Index (IPCI) values for many specialists (e.g., medical oncology, hematology/oncology, and vascular surgery), significantly decreasing their practice expense relative value units (RVUs) and payments for non-E/M codes in which they are the predominant specialty.”

In light of their patient care and provider revenue concerns, the healthcare industry groups advised CMS to not finalize the Medicare reimbursement rate proposal for E//M visits.