CMS Proposed Evaluation and Management E/M Documentation and Payment Changes Are Sparking Backlash and May Hurt Patients

Buried in the proposed 2019 Medicare Physician Fee Schedule, CMS announced potential changes to evaluation and management (E/M) documentation and payment. This is an important area as E/M visits make up about 40% of allowed charges for physician fee schedule services. Physicians would see lowered documentation requirements, but at a cost, as some E/M payment levels would be reduced.

This is already stirring up interest from the physician community and their associated medical groups. As Ted Okon, executive director of the Community Oncology Alliance stated, the CMS “scheme to pay a physician the same amount for evaluating a case of sniffles and a complex brain cancer simply defies all logic. It is the antithesis of value-based healthcare and cheapens the medical care seniors are entitled to under Medicare.” (emphasis added)

“This is insanity for CMS,” said Terry Fletcher, CPC, president of Terry Fletcher Consulting in Laguna Beach, Calif. “Are they crazy?”

“I don’t believe this will be approved in its current format,” Fletcher says. “There will be changes because there will be too many physicians and societies that will disagree with the current proposed rule.” (emphasis added)

In fact, according to some sources, the data analysis CMS conducted to justify this payment cut has been called into question. More on that below.

Evaluation and Management (E/M) Visits

As has been reported, in the proposed rule CMS seeks ease requirements related to E/M documentation to provide practitioners with greater flexibility to exercise clinical judgment in documentation and to focus on what is clinically relevant and medically necessary for each beneficiary.

In terms of specifics, CMS proposes single blended payment rates for new and established patients for office/outpatient E/M level 2 through 5 visits and a series of add-on codes to reflect resources that are needed beyond which is accounted for in the single payment rates.

The new payment rates means new and existing patient E/M levels 1 through 3 will see payment increases, while levels 4 and 5—the most complex cases—will see reductions, based on the CY2019 proposed relative value units and the CY2018 payment rate.

Additionally, for office/outpatient visit codes (CPT codes 99201 through 99215), CMS proposes to allow practitioners to choose, as an alternative to the current framework specified under the 1995 or 1997 guidelines, either Medical Decision-Making or time as a basis to determine the appropriate level of E/M visit.

Arguments From CMS and Why They Are Flawed

Ultimately, the proposed E/M changes impact physicians differently. Physicians that see more complex patients—level 4 and 5 E/M visits—are impacted more than those who typically see levels 1, 2, and 3. CMS argues the negative financial impacts will be offset by the reduction in administrative burdens as outlined in the proposed rule. This may ultimately be true for some specialties, but for others it comes at a price.

Specifically, CMS has said “most specialties would see changes in their overall Medicare payments in the range of 1-2 percent up or down from this policy, but we believe that any small negative payment adjustments would be outweighed by the significant reduction in documentation burden. If you add up the amount of time saved for clinicians across America in one year from our proposal, it would come to more than 500 years of additional time available for patient care, ” as Administrator Verma wrote in her letter to physicians.

Verma’s letter comes as Medscape also points out the agency’s Chief Medical Officer, Kate Goodrich, MD, is emerging as a point person to overhaul the E/M codes.

However, this is where CMS has a data problem. While CMS says there is a “minimal impact” on most specialties, the agency has been putting all services and procedures conducted by specialties into one large bucket. They have not been analyzing the impact on E/M revenue alone. This means the CMS analysis does not address what happens to an individual or group’s practices. Rumor has it there are others crunching the data and should soon come out in opposition with CMS’s numbers.

Outrage and Pushback from Physicians

As Medscape recently reported, CMS will likely encounter resistance to its proposed overhaul of E/M services, as it raises the reimbursement for some specialties while lowering it for others. A cynical play, wedging some physicians against one another, perhaps as a means to water down the political pushback from physician groups.

As Medscape points out, obstetricians and gynecologists would be in line for the biggest potential bump — a 4% gain — from E/M changes, according to Table 22 of the proposed rule, while podiatry and dermatology would take the biggest hit — a 4% decrease. The table details what CMS expects would happen to payments under a proposed single payment rate for E/M patient visits for what are now classified as level 2 to 5 visits. The chart also factors in other variables, including technical adjustments to practice expense per hour value.

Under the scenario envisioned for Table 22, rheumatologists would be in for a 3% cut. Allergy/immunology and hematology/oncology practices, along with neurologists, would receive a more minor, less than 3% estimated decrease in overall payment. Nurse practitioners might see a 3% bump, while psychiatrists and physician assistants are among the group that might get a less than 3% increase in overall payment.

There would be minimal change in the overall payment for many fields, including cardiologists, family practice, and infectious disease experts, the table said.

However, it should be noted especially for the specialties facing cuts, that CMS tried to restructure E/M codes in 1999 and 2000. But the agency failed then and could very well not finalize this current proposal. CMS has also said it is considering delaying implementation until January 1, 2020 and looking at other more moderate approaches, like reducing only some levels of E/M services.

CMS Proposal’s Harmful Impact on Patient Care

The Medscape article cites Angus Worthing, MD, chair of the Government Affairs Committee of the American College of Rheumatology, who said that while the group appreciates CMS’ attempt to reduce the burden of paperwork, it is concerned about the E/M proposal.

“E/M services are already undervalued relative to other physician services,” he said in a statement to Medscape. There is a “risk that additional cuts would worsen the current rheumatology workforce shortage and add additional strain on patients’ ability to access rheumatology care.”

Workforce shortages (after all, why go into a specialty where you are paid less?) would make it increasingly difficult to see already limited physicians, especially in rural areas. It would also likely hasten the pace of physicians moving out of Medicare.

Patients may also struggle with higher co-pays under this proposal. Physicians who see more level 4 and 5 patients will make up for lost revenue by seeing more patients but for smaller periods of time. That means patients will likely need to return to the physician for more follow-up visits, ultimately costing the patient more money.

Additionally, in its July 13 statement, the Community Oncology Alliance said the draft rule “severely undervalues the thorough and critical evaluation and management of seniors with cancer, especially life-threatening complex cases.”

CMS already has signaled that it expects pushback on proposed E/M changes, for which it has a tentative implementation date of January 1, 2019.

In Response, Physician Groups Are Stepping Up

With the potential impact on physician pay and the care of their patients, it is not surprising to see medical societies especially interested in the debate over changes to E/M payment. Regulatory experts at organizations such as the American College of Rheumatology and American Academy of Neurology are already leading efforts to oppose the proposed payment cuts for E/M visits. Expect more outrage from physician groups as coordinated campaigns on the Hill and in the media are also likely..