On November 2, 2017, CMS issued a Final Rule that updates payment policies, payment rates, and quality provisions under the Medicare Physician Fee Schedule (PFS) for calendar year (CY) 2018. In addition to establishing uniform relative value units (RVUs) for CY 2018 for the PFS, the Final Rule includes discussions and finalized policies on a number of payment and quality issues relating to the PFS. Below are some of the key provisions in the Final Rule.

• Payment Update – The Final Rule provides that the 2018 PFS conversion factor will be $35.99, which represents an increase to the 2017 PFS conversion factor of $35.89.
• Telehealth Services – For CY 2018, CMS finalized the addition of several codes to the list of telehealth services, including:
  • HCPCS code G0296 (visit to determine need for lung cancer screening using low dose computed tomography)
  • CPT codes 90839 and 90840 (Psychotherapy for crisis; first 60 minutes) and (Psychotherapy for crisis; each additional 30 minutes)
  • CPT code 90785 (Interactive complexity)
  • CPT codes 96160 and 96161 (health risk assessment)
  • HCPCS code G0506 (Comprehensive assessment of and care planning for patients requiring chronic care management)

In addition, CMS finalized the proposal to eliminate the required reporting of the telehealth modifier GT for professional claims.

• Establishment of Payment Rates for Nonexcepted Items and Services Furnished by Nonexcepted Off-Campus Provider-Based Departments of a Hospital – Section 603 of the Bipartisan Budget Act of 2015 require that certain items and services furnished by certain off-campus provider-based departments (PBDs) not be considered covered outpatient department (OPD) services for purposes of payment under the outpatient prospective payment system (OPPS), and payment for those nonexcepted items and services furnished on or after January 1, 2017 shall be made under the applicable payment system. For CY 2018, CMS has finalized a reduction to the current PFS payment rates for these items and services by 20 percent. Specifically, the Final Rule changes the PFS payment rates for these services from 50 percent of the OPPS payment rate to 40 percent of the OPPS rate.
• Evaluation & Management (E/M) Guidelines – With respect to E/M Guidelines, the Final Rule summarizes comments received in response to the proposed rule’s comment solicitation on the E/M guidelines. Comments from stakeholders reflect the view that the E/M guidelines are potentially outdated and need to be revised.
• Care Management Services – In an effort to improve payment within traditional fee for service Medicare for chronic care management, CMS is finalizing proposals to adopt CPT codes for CY 2018 for reporting several care management services. These services currently are reported using Medicare G-codes. The Final Rule also clarifies certain policies regarding chronic care management.
• Care Coordination Services and Payment for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) – The Final Rule revises payment for chronic care management in RHCs and FQHCs, including creating two new billing codes exclusively for RHC and FQHC payment. In addition, the Final Rule establishes requirements and payment for RHCs and FQHCs furnishing general behavioral health integration services and psychiatric collaborative care model services.
• Part B Drug Payment – CMS is finalizing the proposed revision to 42 CFR § 414.904(e)(2) to conform regulations with the statutory payment requirements in the 21st Century Cures Act, which transitions payment for infusion drugs or biologicals furnished through a covered item of DME from average wholesale price (AWP) to average sales price (ASP) pricing methodology effective January 1, 2017.
• Payment for Biosimilar Biological Products – The Final Rule revises CMS’s policy regarding grouping biosimilar products that rely on a common reference product’s biologics license application into the same payment calculation for determining a single average sales price payment limit. In response to public comment, the Final Rule changes the policy such that effective January 1, 2018, newly approved biosimilar biological products with a common reference product will no longer be grouped into the same billing code.
• Appropriate Use Criteria for Advanced Diagnostic Imaging Services – Per the Final Rule, the Appropriate Use Criteria Program for Advanced Diagnostic Imaging will begin with an educational and operations testing year in 2020. In that year, physicians will be required to start using Appropriate Use Criteria and reporting such information on their claims. CMS is proposing to pay claims for advanced diagnostic services during the first year of the program, regardless of whether the claims correctly contain information on the required Appropriate Use Criteria.
• PQRS Criteria for Satisfactory Reporting for Individual Eligible Professionals (EPs) and Group Practices for the 2018 PQRS Payment Adjustment – CMS has reduced the criteria for satisfactory reporting for the PQRS for the CY 2016 reporting period. CMS finalized a change to the current PQRS program policy to require reporting of six measures for the PQRS with no domain requirement. Also, individual EPs and group practices which did not satisfactorily report data on quality measures for the CY 2016 reporting period are subject to a payment adjustment of negative 2.0 percent in 2018.
• Medicare Shared Savings Program – The Final Rule finalizes several modifications to the rules for accountable care organizations (ACOs) in the Medicare Shared Savings Program (MSSP). Specifically, CMS:
  • Revised the assignment methodology for ACOs that include FQHCs and RHCs;
  • Reduced the burden for ACOs submitting an initial MSSP application or the application for use of the skilled nursing facility (SNF) 3-Day Rule Waiver; and
  • Added three new chronic care management codes and four behavioral health integration codes to the definition of primary care services.
• Value-Based Payment Modifier and the Physician Feedback Program – The Final Rule implements changes to policies for the 2018 Value Modifier, including:
  • Reducing the downward payment adjustment for not meeting the criteria to avoid the PQRS adjustment; and
  • Holding harmless all physician groups and solo practitioners who met the criteria to avoid the PQRS adjustment from downward payment adjustments for performance under quality tiering for the last year of the program.
• Changes to the Medicare Diabetes Prevention Program  (MDPP) Expanded Model – The Final Rule implements the MDPP Expanded model and includes additional policies relating to MDPP payment structure, supplier enrollment requirements, and supplier compliance standards.

The regulation is effective on January 1, 2018. CMS’s Press Release is available here. CMS’s Fact Sheet on the Final Rule is available here. The Final Rule is available here.