CMS Issues 2020 Payment Rules

August 2, 2019

THE STORY

The Centers for Medicare and Medicaid Services (CMS) released the calendar year (CY) 2020 Medicare Physician Fee Schedule (MPFS) and Hospital Outpatient Prospective Payment System (HOPPS) proposed rules on Monday, July 29, 2019.

WHY IT’S IMPORTANT

CMS uses the Medicare Physician Fee Schedule to reimburse physician services. The MPFS is financed by Part B and is comprised of resource costs associated with physician work, practice expense, and professional liability insurance.

CMS uses the HOPPS to reimburse for hospital outpatient services. The HOPPS was created to minimize beneficiary copayments in response to rapidly growing Medicare expenditures for outpatient services and large copayments being made by Medicare beneficiaries. Outpatient services covered belong to an Ambulatory Payment Classification (APC) group. Each group of procedure (i.e., codes) within an APC is presumed to be “similar clinically and with regard to resource consumption.”

THE DETAILS

Medicare Physician Fee Schedule

In this rule, CMS describes changes to payment provisions and to policies for implementation of the fourth year for the Quality Payment Program and its component participation methods – the Merit-Based Incentives Payment System and Advanced Alternative Payment Models.

Highlights:

  • With the budget neutrality adjustment to account for changes in relative value units, as required by law, the proposed CY 2020 PFS conversion factor is $36.09, a slight increase above the CY 2019 factor of $36.04.
  • CMS is proposing to decrease values for 41 radiology- and nuclear medicine–related codes. Additional information on these code-specific changes will be provided in the coming weeks.
  • CMS does not address appropriate use criteria (AUC) or clinical decision support related to advanced diagnostic imaging services in the 2020 proposed rule. CMS published a separate AUC claims processing guidance transmittal on July 26 with additional information on the applicable HCPCS modifiers and G codes. The clinical decision support requirements for advanced imaging services are still scheduled to go into effect on January 1, 2020.

Hospital Outpatient Prospective Payment System

In this rule, CMS includes proposals that would advance its commitment to increasing price transparency. CMS proposes that hospitals make public their “standard charges” for all items and services provided by the hospital.

Highlights:

  • CMS does not propose any new changes to the ambulatory payment classification (APC) structure for imaging codes.
  • CMS proposes to continue paying for drugs and therapeutic radiopharmaceuticals at ASP + 6% as set forth in the CY 2010 OPPS/ASC Final Rule.
  • CMS proposes an increased threshold payment for therapeutic radiopharmaceuticals of $130, where CMS will package those that are priced less than or equal to $130 into the APC payments and pay separately for those that meet or exceed this threshold amount.

Physician Out-Patient Office Visit Proposed Rule

Highlights:

  • Effective January 1, 2021, CMS will adopt the CPT guidelines to report office visits based on either medical decision making or physician time.
  • CMS adopted the RUC work recommendations for the office visit codes. The work value increases represent $3 billion in redistributed spending, resulting in a 3% reduction in the conversion factor.
  • CMS adopted the RUC physician time recommendations. Coupled with the work value increases and some modifications in direct practice costs, these changes lead to an additional $2 billion in redistributed spending, resulting in an additional 2% across-the-board reduction.

WHAT SNMMI IS DOING

SNMMI is reviewing both proposed rules and will prepare a detailed summary as well as payment rate charts. The society will submit comments by the end of the comment period, which closes September 27, 2019. 

WHAT’S NEXT

Payment rates and policies will be effective January 1, 2020, once finalized.