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Four Final Rules Affecting CMS Payments for 2018

By:  Wyn Staheli, Director of Research
Published:  November 7th, 2017

It’s a season for changes. CMS just finalized four rules which directly impact the following payment systems:

  1. Physician Fee Schedule Final Policy, Payment, and Quality Provisions for CY 2018
  2. Hospital OPPS and ASC Payment System and Quality Reporting Programs Changes for 2018
  3. HHAs: Payment Changes for 2018
  4. Quality Payment Program Rule for Year 2

1. Physician Fee Schedule

This final rule includes a new Patients over Paperwork initiative, RVU changes, expansion of the Diabetes Prevention Program and much more. When considering fees, always keep in mind that fees are always adjusted based on quality program initiatives. The final conversion factor for 2018 is set as $35.99 (an increase from $35.89 for 2017). The Final Rule includes the following:

  • Patients over Paperwork Initiative
  • Changes in valuation for specific services
  • Payment rates for nonexcepted, off-campus, provider-based, hospital departments
  • Medicare telehealth services expanded and modifier GT is no longer required
  • Malpractice relative value units did not undergo significant changes
  • Care management services will use new CPT codes instead of the previously reported G codes and a few policies were clarified
  • Improve payment rates for office-based behavioral health services by revising  the overhead expense evaluation portion of the RVU
  • Comment solicitation in the future (watch for further announcements) on the following:
    • Evaluation and management guideline revisions (no guideline changes were in the Final Rule)
    • Emergency department visits; re-evaluation of RVUs for codes 99281-99385
    • Clinical Laboratory Fee Schedule initial data collection and reporting periods (note: payment will be based on weighted median of private payer rates)
  • Part B payment policy for biosimilar biological products changed so that newly approved products will have their own code and must be billed with the appropriate modifier(s)  (this change will occur ‘as soon as feasible,’ possibly by the middle of 2018)
  • Part B drug payment: Infusion drugs furnished through an item of durable medical equipment will be paid based on the average sales price (ASP) instead of the average wholesale price (AWP)
  • New care coordination services and payment for rural health clinics (RHCs) and federally-qualified health centers (FQHCs) allows for payment of Chronic care management (CCM), general (Behavioral Health Integration) BHI, and psychiatric Collaborative Care Management (CoCM) using two new billing codes created exclusively for RHC and FQHC payment (in addition to the payment for an RHC or FQHC visit)
  • Appropriate use criteria for advanced diagnostic imaging program is set to begin in 2020
  • Medicare Diabetes Prevention Program expanded model begins in 2018
  • Physician Quality Reporting System satisfactory reporting criteria for 2016 lowered to 6 measures (previously 9) with no domain or cross-cutting measure required
  • Patient relationship codes required under section 101(f) of MACRA will be reported with new HCPCS modifiers (CLICK HERE for more information)
  • Medicare Shared Savings Program has been modified in an effort to reduce reporting burdens and streamline program operations
  • 2018 Value Modifier revised to better align incentives with MIPS

CLICK HERE to read the Press Release.

CLICK HERE to read the Final Rule.

2. Hospital OPPS and ASC Payment System and Quality Reporting Programs

For 2018, CMS is increasing the hospital OPPS rate by 1.35 percent and ASC payments are projected to increase approximately 3 percent. The Final Rule includes the following:

  • Patients over Paperwork Initiative
  • Payment for drugs and biologicals purchased through the 340B drug pricing program
  • Supervision of hospital outpatient therapeutic services
  • Packaging of low-cost drug administration services
  • Inpatient only code list
  • High cost/low cost threshold for packaged skin substitutes
  • Revisions to the laboratory date of service policy
  • Partial Hospitalization Program rate setting
  • Comment solicitation on ASC payment reform
  • ASC covered procedures list
  • Hospital Outpatient Quality Reporting Program
  • Ambulatory Surgical Center Quality Reporting Program

CLICK HERE to read the Press Release.

CLICK HERE to read the Final Rule.

3. HHAs: Payment Changes

For 2018, CMS projects a decrease of 0.4 percent in payments to Home Health Agencies (HHAs) which includes the sunsetting of the rural add-on provision. The Final Rule includes the following:

  • Patients over Paperwork Initiative
  • Annual home health payment update percentage
  • Adjustment to reflect nominal case-mix growth
  • Sunset of the rural add-on provision

CLICK HERE to read the Press Release.

CLICK HERE to read the Fact Sheet.

CLICK HERE to read the Final Rule.

4. Quality Payment Program Rule for Year 2

CMS kept some of the transition year policies and made some other changes designed to reduce the burden of provider participation. The Final Rule includes:

  • Merit-based Incentive Payment System (MIPS) scoring:
    • Cost performance category changed from 0% to 10% (this will be calculated from Medicare Spending per Beneficiary (MSPB) and total per capita cost measures for 2018 - the old Value Modifier program)
    • Quality performance category changed from 60% to 50%
  • Raising the MIPS performance threshold to 15 points in Year 2 (last year it was 3 points)
  • Allowing the use of the 2014 Edition and/or 2015 Certified Electronic Health Record Technology (CEHRT) in Year 2 for the Advancing Care Information performance category, and giving a bonus for using only 2015 CEHRT
  • Awarding up to 5 bonus points on your MIPS final score for treatment of complex patients
  • Automatically weighting the Quality, Advancing Care Information, and Improvement Activities performance categories at 0% of the MIPS final score for clinicians impacted by Hurricanes Irma, Harvey, and Maria, and other natural disasters
  • Adding 5 bonus points to the MIPS final scores of small practices
  • Adding Virtual Groups as a participation option for MIPS
  • Issuing an interim final rule with comment for extreme and uncontrollable circumstances where clinicians can be automatically exempt from these categories in the transition year without submitting a hardship exception application
  • Decreasing the number of doctors and clinicians required to participate as a way to provide further flexibility by excluding individual MIPS eligible clinicians or groups with ≤ $90,000 in Part B allowed charges OR ≤ 200 Medicare Part B beneficiaries
  • Providing more detail on how eligible clinicians participating in selected Advanced Alternative Payment Models (APMs) will be assessed under the APM scoring standard
  • Creating additional flexibilities and pathways to allow clinicians to be successful under the All Payer Combination Option

CLICK HERE to read the Final Rule Overview.

CLICK HERE to read the Executive Summary.

CLICK HERE to read the Press Release.

CLICK HERE to read the Final Rule.



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