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Proposed E/M Coding Changes Overshadow Other Fee Schedule, Quality Provisions

David White
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On July 12, 2018, the Centers for Medicare & Medicaid Services (CMS) released a combined proposed rule for the Physician Fee Schedule (PFS) and the Quality Payment Program (QPP) for performance year 2019. Led by its Quality Committee, the American Society of Nephrology (ASN) has been reviewing the proposed changes, meeting with peer societies and coalitions, and drafting comments and recommendations. Most readers will have heard about one particular aspect of the proposed changes: recommendations by CMS to simplify Evaluation and Management (E/M) coding documentation requirements with the stated goal of providing relief from regulatory burden for clinicians. CMS has characterized this and other recommended changes as part of the Department of Health and Human Services’ high priority Patients Over Paperwork program.

The proposed changes to E/M coding and valuation begin with a stated approach of allowing physicians to justify the level of complexity of a visit based on medical decision-making or time involved, but the result is a valuation system that many ASN members have characterized as devoid of nuance for the gradation of care involved.

The proposed changes are hugely impactful—even by CMS’ own account. As CMS wrote in the proposed rule, “In total, E/M visits comprise approximately 40% of allowed charges for PFS services, and office/outpatient E/M visits comprise approximately 20% of allowed charges for PFS services.” ASN and other stakeholders have long maintained that many of the E/M documentation guidelines are administratively burdensome and outdated with respect to the practice of medicine and recently provided CMS with examples of such outdated requirements, which sap clinicians’ time and contribute to burnout. The good news is that CMS has listened to similar concerns from ASN and virtually every medical specialty society and proposes to ease those requirements.

The bad news is that CMS is proposing to make those positive changes as part of a larger, deeply concerning proposal to collapse payments for E/M codes 2–5 into a single payment. CMS would leave reimbursement for E/M level 1 visits as is.

In its comment letter, ASN will oppose the proposed compression of reimbursement rates for E/M coding for levels 2–5 visits into a single reimbursement payment set. Specifically, CMS proposes to set the new, single payment around the current E/M level 3 payment. There will be one reimbursement rate for a new patient visit and one for an existing patient visit. This proposal reduces the reimbursement for the most complex patient encounters by $76 per visit for new patients and by $55 per visit for established patients, while reducing reimbursement for current level 4 visits by $32 and $16, respectively. ASN believes these proposed changes have many potential adverse consequences for patients and clinicians, particularly in nephrology. (Notably, the proposal does not affect the ESRD Monthly Capitated Payment.)

ASN has identified at least five areas of concern regarding the proposed E/M changes that would have negative implications for patients with kidney diseases:

  • 1. Incentivizes non-patient centered care.

  • 2. Reinforces the gap between cognitive and procedural care.

  • 3. Disincentivizes CKD/preventive care.

  • 4. Fails to account for critical patient care documentation needs.

  • 5. Understates the impacts on nephrology practices, with reductions far higher than suggested by CMS.

Key to ASN’s objections to the proposed changes is that in order to improve public health, nephrologists need to focus on efforts to slow the progression of kidney diseases, manage the complications of advanced kidney diseases, and optimally prepare patients for kidney failure, including preparations for dialysis, transplant, and conservative non-dialysis care. Kidney diseases affect more than 40 million people in the United States, with Medicare alone spending more than $33 billion (1) annually on its End-Stage Renal Disease (ESRD) program and over $103 billion (2) annually on all kidney diseases. This outlay does not include Medicaid, the Veterans Affairs Department, the Department of Defense, and private insurers.

Adjusting the E/M codes in the proposed manner has led to serious concern in the nephrology community. Many ASN members believe these efforts have historically been undervalued. The proposed PFS further disincentivizes clinicians from focusing on the complex, cognitive care that is required to slow the progression of CKD to dialysis and to optimally care for people who have received a kidney transplant.

Following are some of the other provisions of the proposed rule that were more welcome than the E/M payment reduction proposals:

  • Paying physicians for their time when they reach out to beneficiaries via telephone or other telecommunications devices to decide whether an office visit or other service is needed.

  • Paying for the time it takes physicians to review a video or image sent by a patient seeking care or diagnosis for an ailment.

  • Eliminating the requirement to justify the medical necessity of a home visit in lieu of an office visit.

  • Allowing practitioners to simply review and verify certain information in the medical record that is entered by ancillary staff or the beneficiary, rather than re-entering it.

  • Starting in Year 3, permitting clinicians or groups to opt-in to MIPS if they meet or exceed one or two, but not all, of the low-volume threshold criteria.

  • Liberalizing and expanding the rules for reporting methods and types in the QPP.

  • Expanding MIPS-eligible clinicians to include physical therapists, occupational therapists, clinical social workers, and clinical psychologists.

  • Weighting costs in MIPS at 15%, per congressional direction, instead of the original 30% weighting called for in the original MACRA legislation.

ASN will inform members of what CMS decides to include in the final rule due out this fall.