CMS Proposes Price Transparency Changes, Updates to Physician Fee Schedule


CMS announced changes to make it easier for the consumer to know what they are paying for in healthcare and for physicians to manage chronic conditions.

CMS on Monday issued a flurry of proposals aimed at making it easier for consumers to know what they can expect to pay if they seek medical care, especially if they need care at a hospital. The proposals come amid growing bipartisan demands for transparency in healthcare, while federal legislation that seeks to end surprise medical bills works its way through Congress.

The proposals seek to implement President Trump’s Executive Order, “Improving Price and Quality Transparency in American Healthcare to Put Patients First,” which HHS Secretary Alex Azar said would provide “clear, accessible information” about the cost of healthcare services so that patients can compare prices at different providers.

“Under this proposal, hospitals will finally have to make their real, negotiated prices known to patients, enabling patients to shop among providers,” Azar said. “Healthcare leaders have been talking about the need for transparency for years.”

In addition, CMS released the proposed calendar year (CY) 2020 Physician Fee Schedule (PFS), which includes an overhaul of the way doctor are paid for evaluation and management (E/M) services in Medicare, as well as updates to the Quality Payment Program. E/M includes examinations, disease diagnosis, risk assessment, and care coordination, and the CY 2020 proposal represents the fruits of a collaboration with the American Medical Association (AMA) to address the number of patients who have multiple chronic conditions.

“Today 1 in 5 Medicare beneficiaries have multiple chronic diseases,” said CMS Administrator Seema Verma in a statement. “We are announcing proposals so that the government doesn’t stand in the way of patient care, by giving clinicians the support they need to spend valuable time coordinating the care of these patients to ensure their diseases are well-managed and their quality of life is preserved.”

The CMS transparency proposals outlined yesterday would require the following:

  • Hospitals would have to release their “standard charges,” which include both gross charges and those negotiated with each payer for various items and services.
  • Standard charges must be posted on the Internet in a searchable format, along with billing or accounting codes that allow comparisons between hospitals.
  • The public would gain access to payer-specific negotiated charges in a consumer-friendly format; this would let consumers compare prices for things like X-rays, laboratory tests, or the cost of a Cesarean delivery.

The proposals include updates to the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgical Center (ASC) Payment System. One proposed rule would reduce price differences between certain outpatient service sites, a move that is designed to get patients to select where they receive care based on what is clinically necessary, not just on cost. CMS proposes taking the total hip arthroplasty off the Inpatient Only list, which would mean Medicare would pay for it in both the inpatient and outpatient setting. For CY 2020, CMS proposes adding Total Knee Arthroplasty, Knee Mosaicplasty and 3 additional coronary procedures to the ASC covered procedure list.

Changes to the Physician Fee Schedule

The CY 2020 PFS includes a variety of proposed changes and codes to promote broader use of telehealth in Medicare, including codes for a bundled episode of care in treating opioid use disorders.

The E/M coding proposals retain 5 levels for established patients and update definitions; proposed changes adjust times and medical decision making for all codes and gives physicians some discretion based on medical decision-making or the amount of time. A full medical history will not have to be redone at each visit. CMS called for adopting a set of codes based on an AMA survey for CY 2021 with a new add-on code of prolonged service time. The change, coming just a year after CMS sought to collapse E/M codes in a cost-saving move, was praised by both the AMA and specialists who treat complex patients, including rheumatologists.

Said Paula Marchetta, MD, MBA, president of the American College of Rheumatology, “The ACR applauds CMS for recommending long-needed updates to E/M codes in its CY 2020 Physician Fee Schedule proposed rule. Rheumatologists and other cognitive specialists should be adequately reimbursed for the time-intensive, high-value services they provide to Medicare beneficiaries. The proposed changes would more closely align reimbursement for E/M services with the time and expertise they require, and will help ensure millions of Medicare beneficiaries continue to receive these vital healthcare services.”

Patrice A. Harris, MD, MA, president of the American Medical Association, said the proposals “will streamline reporting requirements, reduce note bloat, improve workflow, and contribute to a better environment for health care professionals and their Medicare patients.”

Changes Proposed to MIPS, Chronic Care Management

Harris also praised proposed reforms to the Merit-Based Incentive Payment System (MIPS). Physicians have said the movement away from fee-for-service has been challenging due to the many reporting burdens, even if physicians embrace the general concept of being rewarded for outcomes.

Verma said the new framework, called the MIPS Value Pathways (MVPs), which would begin in the 2021 performance period, would require physicians to report far fewer individual elements and instead focus on a smaller set of measures focused on their specialty and outcomes, moving closer to an alternative payment model.

“The AMA commends CMS for requesting input on a simplified option that would give physicians the choice to focus on episodes of care rather than following the current, more fragmented approach,” AMA’s Harris said. “Making MIPS more clinically relevant and less burdensome is a top priority for the AMA and we believe CMS is taking an important step toward this goal.”

CMS has also proposed a new set of billing codes for certain Chronic Care Management (CCM) services. CCM is a service for providing care coordination and management services to beneficiaries with multiple chronic conditions over a calendar month service period. CMS seeks to replace a number of the CCM codes with Medicare-specific codes that will let physicians to bill incrementally to reflect additional time and resources required for patients with complex needs, and better distinguish complexity of illness as measured by time.

“We are also proposing to adjust certain billing requirements and elements of the care planning services,” Verma said. “These changes would also reduce burden associated with billing the complex CCM codes.”

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