Published 1/1/2019
Shreyasi Deb, PhD, MBA

CMS Finalizes Rules for 2019

On Nov. 1 and 2, 2018, the Centers for Medicare & Medicaid Services (CMS) finalized two major payment rules for 2019 that went into effect on Jan. 1: (1) the Medicare Physician Fee Schedule (MPFS) rule, and (2) the Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System rule.


Key changes in the MPFS rule include the following:

Evaluation and management (E/M) documentation

In calendar year (CY) 2019, CMS is finalizing several documentation policies to provide immediate burden reduction for physicians and other clinicians, but other changes to documentation, coding, and payment will not be implemented until CY 2021. For CY 2019 and CY 2020, practitioners should continue to use either the 1995 or 1997 E/M documentation guidelines to document E/M office/outpatient visits billed to Medicare.

CMS is finalizing the following policies this year:

  • The requirement to document the medical necessity of a home visit in lieu of an office visit will be eliminated.
  • For established patient office/outpatient visits, clinicians may focus their documentation on what has changed since the last visit and do not need to re-record the defined list of required elements.
  • Additionally, for E/M office/outpatient visits for new and established patients, physicians do not need to re-enter the history and physical information already input by ancillary staff. Physicians can simply indicate that he or she reviewed and verified that information.
  • Teaching physicians will not be required to re-enter potentially duplicative notations in medical records that may have previously been input by residents or other members of the medical team.

AAOS is supportive of these initiatives to reduce documentation burden; however, it does not believe that the proposal to provide a single payment rate for Levels 2–5 E/M visits is acceptable. A single payment rate based on a snapshot calculation of all providers and all Medicare patients disregards the complexity of a patient or the intensity of a service and does not conform to the resource-based relative value scale methodology used since 1992. The “average” visit level cannot be presumed on a granular level. Certain orthopaedic subspecialties (i.e., trauma, oncology, spine) and tertiary care subspecialists who see more complex patients or those with multiple conditions and tend to bill a higher percentage of Levels 4 and 5 visits will be negatively impacted.

AAOS also believes it is essential that CMS adhere to the multiyear timeline described in the proposed rule, with the goal of creating the most current and appropriate set of E/M guidelines. CMS should work closely with medical specialty societies to ensure that providers are involved and that guidelines accurately reflect levels of E/M services. Of note, the American Medical Association (AMA) has convened a Current Procedural Terminology (CPT)/Relative-value Update Committee (RUC) E/M Workgroup to tackle this complicated issue, and AAOS will be following its progress. AAOS expects that it will appropriately represent the interests of both proceduralists and nonproceduralists.

Identification and review of potentially misvalued services

In the final rule, CMS stated that seven high-volume CPT codes, including those for total hip arthroplasty (CPT 27130) and total knee arthroplasty (TKA) (CPT 27447), are potentially misvalued. The notion came from a public nomination suggesting that previous RUC review did not result in appropriate reductions in surveyed time and valuation. AAOS strongly disagrees with this assumption and does not believe that any further action is warranted. Since the codes were last reviewed in 2013, there has not been any evidence to suggest a change in physician work or practice expense. Additionally, the nature of the reevaluation request is problematic. CMS did not identify the source, nor did it make the full communication publicly available in the proposed rule.

AAOS advised against a review by the RUC and CMS and asked for increased transparency in nominations going forward. It is actively working with affected orthopaedic specialty organizations and other physician specialty groups, including gastroenterology and neuroradiology, AMA-RUC, and CMS to avoid a new survey or mitigate the impact of reevaluation of these codes. AAOS also is pursuing a structured regulatory and legislative advocacy plan around this issue.

New payments for telehealth services

For CY 2019, CMS is finalizing two newly defined physicians’ services furnished using communication technology:

  1. brief communication technology-based service (e.g., virtual check-in [Healthcare Common Procedure Coding System (HCPCS) code G2012])
  2. remote evaluation of recorded video and/or images submitted by an established patient (HCPCS code G2010)

AAOS is supportive of these and believes they will be especially helpful for rural patients and those who have transportation issues. Further, AAOS agrees with the AMA-RUC that these codes should have work relative value units of 0.50 and 0.70, respectively. AAOS supports reimbursing all means of patient contact work (e.g., telephone, email, patient portal, fax). Limitation of such services to those that are patient-initiated undervalues recent increases in care coordination efforts. Provider outreach to established patients could obviate the need for unexpected follow-up visits.


Key changes in the OPPS and ASC rule include the following:

Site-neutral payment expansion

This year, CMS is expanding site-neutral payments by finalizing several policies to reduce payment differences between hospitals and ASCs. To control unnecessary increases in the volume of covered hospital outpatient department services, CMS is applying an MPFS-equivalent payment rate for clinic visits—the most common service billed under OPPS—when provided at an off-campus provider-based department (PBD). CMS estimated this change will result in lower copayments for beneficiaries and savings for the Medicare program of $380 million for 2019.

This reduction will be phased in over a two-year period and will reduce OPPS payment rates for clinic visits to $81 (from an average of $116), with a beneficiary copayment of $16. That means beneficiaries will save an average of $7 in copayments each time they visit an off-campus PBD. AAOS supports this expansion of site-neutral payments, as it is likely to create a level playing field for independent orthopaedic surgeon practices that must compete with off-campus PBDs owned by hospitals. Further, it will reduce financial burden for Medicare patients and their families. Such policy change also is expected to stem the vertical integration in healthcare markets, thereby improving competition and the quality of outcomes.

Updates to ASC payment rates

Traditionally, CMS has updated ASC payment rates annually by the percentage increase in the Consumer Price Index for all urban consumers. In the new rule, however, it finalized its proposal to use the hospital market basket to make these updates. AAOS strongly supports this change, which will be helpful for orthopaedic surgeons and their patients as an increasing number of procedures move to the ASC setting.

Device-intensive policy

For a procedure to be device intensive, the device cost associated with that procedure must exceed a certain threshold of the total cost of the procedure, among other criteria. For CY 2019, CMS is finalizing the proposal to lower the device threshold from 40 percent to 30 percent. This will be beneficial for orthopaedic procedures that use high-cost devices, as re­imbursements in the OPPS and ASC settings will improve.

APC assignment of TKA and other musculoskeletal procedures

TKA was removed from the Medicare Inpatient Only (IPO) list in 2018 and assigned to Ambulatory Payment Classification (APC) 5115. Although CMS intended for this to affect only a small number of beneficiaries, many health systems and Medicare Advantage plans began to unilaterally deny inpatient TKA. AAOS believes, however, that TKA satisfies requirements for a higher APC because outpatient arthroplasty performed on the Medicare population requires a greater level of intensity in care coordination. Accordingly, in response to the proposed rule, AAOS commented that if an additional level is created between APC 5115 and 5116, it expects that TKA and any future arthroplasty procedures removed from the IPO list would warrant assignment to the higher APC level.

CMS, however, believes that the APC assignments of CPT code 27279 (arthrodesis sacroiliac joint) to APC 5116 and CPT codes 28740 (fusion of foot bones) and 28297 (correction hallux valgus) to APC 5114 remain appropriate based on their geometric mean costs. The agency also said in the final rule that C–APC 5115 is an appropriate APC assignment for the procedures described by CPT code 27447. CMS argued that because beneficiaries selected for outpatient procedures are expected to be less complex than those treated as hospital inpatients, it would be inappropriate for the OPPS payment rate to exceed the Medicare inpatient payment rate for TKA.

Separate payment for nonopioid pain management treatments

CMS finalized separate payment for nonopioid pain management drugs that function as a supply when used in a surgical procedure performed in an ASC. AAOS supported this incentive to increase the availability and use of nonopioid alternatives for pain management. For example, there has been some success with intravenous acetaminophen as an alternative to opioids, but comparatively high cost may have limited its use. Also, AAOS encourages the use of other effective forms of pain management, such as regional nerve blocks, icing wraps, transcutaneous stimulators, and topical analgesics.


AAOS has developed robust advocacy strategies and partnered with other stakeholders when applicable to respond to these important regulations, including updates to E/M documentation and payments and the potentially misvalued codes. AAOS continues to pursue the expansion of equality of payments for same services across settings of care.

Shreyasi Deb, PhD, MBA, is senior manager of health policy in the AAOS Office of Government Relations.