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Similar to restructuring tax brackets but then having everyone pay exactly the same single flat rate

It is difficult to understand the logic underlying the proposal by the Centers for Medicare & Medicaid Services (CMS) to change dramatically the way physicians use evaluation and management (E&M) codes.

On Friday July 27, in the Federal Register, CMS published its proposal for the 2019 Medicare Physician Fee Schedule. It is important to emphasize that this is only a proposal. When the final rule is issued, likely between Halloween and Thanksgiving, and effective Jan. 1, 2019, CMS may adopt all, some or none of the proposal.  There are two distinct elements to the proposal and while it’s possible that one or the other elements is logical, combining the two seems completely irrational.

The first proposal involves modifying the criteria for choosing an E&M code.  CMS describes the changes as a “simplification,” although a better characterization would be an increase in flexibility. 

Under the proposal, physicians would be free to continue to choose E&M codes exactly as they do now, but if adopted, the proposed rule would create another option in which the physicians could use the level of medical decision-making (MDM) as the sole factor for choosing a code—assuming, of course, that the medical decision-making was also medically necessary.  Generally speaking, it is difficult to criticize a proposal that offers more choice, although there is a variety of psychological research into the paradox of choice noting that when too many options are available, the situation can become overwhelming and more stressful than the absence of choice. 

Undoubtedly, many physicians would say offer exactly that complaint about the current E&M coding structure.

If the only proposed change involved creating that additional flexibility, I would describe it as an improvement.

The proposal, however, includes another major change: It takes the current structure of having five separate payment rates in each new and established patient office visits and reduces them to two payments rates in each category. Currently, each code from 99201-99205 (new patients) and 99211-99215 (established patients) has its own payment rate.

Under the proposal, there would be one payment rate for a 99201 and a second payment rate for all codes 99202-99205.  Similarly, there would be a payment rate for 99211, and a second rate for all codes 99212-99215. 

In other words, a 99215 would be paid the same amount as a 99212, and a 99205 the same as a 99202.

There would be four reimbursement amounts for office visits, a new patient and established payment rate for services by ancillary staff, and another rate for those visits when done by physicians and non-physician practitioners (NPPs), physician assistants (PAs), and clinical nurse specialists (CNSs). CMS is also proposing some add-on codes that would provide additional payment for some effort, including longer counseling visits. I don’t know whether that proposal would be wise if it were standing alone, but combined with the first proposal, it’s ludicrous. 

Why use a complicated system for choosing the proper level of service if that complicated choice has no reimbursement impact?  It’s akin to completely restructuring tax brackets but then having everyone pay exactly the same single flat rate. 

Because the rule is only proposed, it is possible that it is some sort of trial balloon. Perhaps CMS will choose to implement only one of the two proposals, or perhaps it will not implement any of the proposed changes.  These are proposed changes and many times a proposed rule is never implemented. 

Nothing in the proposal, however, suggests that the two proposals constitute alternatives. The proposed rule is written as if both ideas are to be tried. I know a variety of professionals at CMS and their work usually impresses me.

I have no idea what went wrong here, because if the goal is to have one payment rate for all new patient visits, and another for all established visits, there is no reason to require physicians to work to place them into four different meaningless codes.   CMS claims the proposal lowers the record keeping burden.

In fact, the proposed rule creates an unprecedented level of busy work.


Program Note:

Listen to David Glaser every Monday on Monitor Mondays, 10-10:30 a.m. EDT.


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David M. Glaser, Esq.

David M. Glaser is a shareholder in Fredrikson & Byron's Health Law Group. David assists clinics, hospitals, and other health care entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement, and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes. David's goal is to explain the government's enforcement position, and to analyze whether this position is supported by the law or represents government overreaching. David is a member of the RACmonitor editorial board and is a popular guest on Monitor Mondays.

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