Published 10/1/2018
Dena McDonough, PA-C, MHCDS; Matthew Snider, JD; Shreyasi Deb, PhD, MBA

Key Changes Proposed in Medicare Physician Fee Schedule Rule

AAOS applauds proposals to cut paperwork but opposes documentation code collapse

On July 12, the Centers for Medicare & Medicaid Services (CMS) released the 2019 Medicare Physician Fee Schedule (MPFS) proposed rule, which includes updates to the Quality Payment Program (QPP) and other physician reimbursement guidelines under Medicare Part B. Comments were accepted through mid-September, and the final rule will be finalized in early November.

The proposed conversion factor will increase to 36.0463, up from 35.99 in 2018, and the combined impact for orthopaedics is a 1 percent increase in reimbursements.

The following information outlines some of the key changes proposed in the rule.

Increased access to care

Nonexempt, hospital-owned, off-campus practices will continue to be paid under the MPFS at 40 percent of hospital outpatient prospective payment system rates. The prohibition of same-day visits by practitioners of one group and specialty may be removed. CMS proposed expanding patient-initiated telehealth services by creating reimbursable communication technology-based telehealth services. This would include patient check-ins that prevent in-person visits and evaluation of patient-captured images.

Evaluation and Management changes

CMS proposed significant changes to payment and documentation requirements for office visits. Specifically, the agency wants to update Evaluation and Management (E/M) guidelines for Current Procedural Terminology (CPT) codes 99201-5 and 99211-5, which are used to describe and bill for ambulatory services. The agency proposed treating Level 2-5 visits as indistinguishable, with corresponding payments being $135 for new and $93 for established patients.

According to CMS, this change would have minimal financial impact on orthopaedic surgery. It would, however, have a deleterious effect on reimbursement for surgeons who bill higher-level visits. To account for this, CMS proposed three new add-on codes to supplement payment for primary care, complex visits, and prolonged visits.

Although the decrease in E/M levels appears to reduce administrative burden, AAOS is concerned about the significant and time-consuming changes required to implement new guidelines. Additionally, the methodology used to value the codes is neither transparent nor resource-based. Ultimately, AAOS does not believe the proposed changes are an acceptable solution and urges CMS to delay any changes to the E/M.

Other proposals related to E/M services

To prevent overlapping resources, CMS proposes to reduce payment by 50 percent for standalone E/M visits during global periods, currently identified by modifier-25. Although AAOS recognizes some potential overlap, it believes that a 50 percent reduction is inappropriate and excessive. Because the modifier already discounts procedures, the overlap in work relative value units and practice expense has been previously reduced, which could lead to unwarranted or duplicative payment reductions.

Review of arthroplasty procedures

CMS received a public nomination to review total hip arthroplasty (CPT 27130) and total knee arthroplasty (CPT 27447) as potentially misvalued. The codes were reviewed by the Relative Value Scale Update Committee and CMS in 2013. There are no data to indicate a change in the work or number of postoperative visits over the past five years.

Update on global surgery data collection

Beginning July 1, 2017, CMS required certain surgeons in nine states to report postoperative visits with the no-pay CPT code 99024. Thus far, only 4 percent of 10-day global procedures had a visit reported. This suggests that postoperative visits are not typically furnished for 10-day global procedures, and CMS plans to assess potential alternative explanations. In contrast to reporting for 10-day global procedures, 67 percent of 90-day global procedures had a visit reported.

QPP changes

In year three of the program, CMS expanded the definition of Merit-based Incentive Payment System (MIPS)-eligible clinicians to include other providers, such as physical therapists, occupational therapists, and more.

CMS also proposed adding a third element to the low-volume threshold that would be based on the number of covered professional services provided. These new opt-in scenarios would allow for more voluntary participation, which AAOS has always supported and encouraged. The overall MIPS performance threshold—which determines the type of payment adjustment a clinician receives—would increase from 15 points to 30 points. Although AAOS understands that Medicare Access and CHIP Reauthorization Act restricts CMS’ flexibilities as it gears up to the 2024 program year, it believes that a more modest increase would be less taxing. It suggests CMS more slowly increase the threshold until MIPS participants have a greater sense of how they performed.

Among other changes, the proposed rule would shift 5 percentage points from the quality performance category to cost (now weighted at 45 points and 15 points, respectively). The new cost category weight is a more gradual increase than had been expected based on last year’s QPP rule. Improvement activities and promoting interoperability (formerly Advancing Care Information) will remain weighted at 15 and 25 percentage points, respectively. AAOS appreciates the measured pace of this process—especially as we wait for the program’s first-year results—and hopes CMS continues this level of engagement with stakeholders in other areas of the QPP. To reduce clinician burden and encourage more meaningful reporting, CMS reduced the number of objectives and quality measures, as well as revised the definition of high-priority measures. New policies will also allow a combination of reporting mechanisms (e.g., facility-based eligible clinicians can use facility-based scoring that will not require data submission). Other foreseeable provisions include continuing the complex patient bonus, as finalized for the 2020 MIPS payment year; extending the interim policy for automatically reweighting quality-improvement activities; and promoting interoperability performance categories for the transition year of MIPS for eligible clinicians who are affected by extreme and uncontrollable circumstances. Additionally, the proposed rule retains the small practice bonus but decreased its weight by reducing it from five points overall to three points and assigning it to the quality category. AAOS urged CMS not to finalize the small bonus payment changes as proposed.

There are few changes to the Advanced Alternative Payment Model (APM) policies. CMS proposes increasing the requirement for use of certified electronic health records technology from 50 percent of eligible clinicians in each APM entity in 2018 to 75 percent in 2019.


Upon initial review, AAOS appreciates the flexibilities included in this year’s rule and the Medicare Advantage Qualifying Payment Arrangement Incentive demonstration. It also commends CMS on its efforts to improve quality and access. The Academy would, however, like to see more avenues for orthopaedic surgeons to participate in advanced APMs. AAOS has commented on these proposals and will report on the finalized provisions later this year.