The Evaluation and Management Transformation Begins! 2019 Physician Coding and Reimbursement Policy HIghlights

On November 1, 2018, the Centers for Medicare and Medicaid Services (“CMS”) issued what could arguably be some of the most anticipated updates to the Medicare Physician Fee Schedule (“MPFS”) in program history. The focus of revisions to payment policies and payment rates under the MPFS applies to services provided by physicians, non-physician practitioners (“NPPs”) and other healthcare professionals paid under the MPFS furnished on/after January 1, 2019. 

Documentation of Office/Outpatient E&M visits

In the 2019 MPFS, CMS finalized historic changes impacting office and outpatient E&M services, the most significant of which will not be fully realized until 2021. Though providers will continue to follow existing 1995 or 1997 documentation guidelines, interim modifications will affect outpatient E&M visits beginning January 1, 2019 discussed in more detail below.

Intending to simplify and streamline documentation requirements for established patient office or outpatient E&M services, when relevant information is already contained in the medical record, practitioners may now choose to focus their documentation on what has changed since the last visit. CMS emphasized in the final rule that the intent is in eliminating redundant information and allowing practitioners to focus on only what has changed since the last visit by updating clinically relevant elements of the history.

Similarly, for both new and established patients, CMS indicates that practitioners need not re-enter information on the patient’s chief complaint and history that has already been entered by ancillary staff or the beneficiary. When information is already documented, the billing practitioner can review the information, update or supplement it as necessary, and indicate in the medical record that he or she has done so. Suggesting this is an optional approach for the billing practitioner, CMS specifies that this applies to any part of the history for either new or established patients.

The Medicare Administrative Contractor (“MAC”), National Government Services (“NGS”) has issued guidance which cautions practitioners as to documentation of the History of Present Illness (“HPI”), which is integral relative to capturing clinically relevant changes and establishing medical necessity for an E&M service.

“In many circumstances, clinical skill is needed to determine the scope and course of questioning relative to this process; the provider remains obligated to assess previously recorded information and to expand upon it as medically necessary.” 

Due to the potential risk involved with this change, we recommend reviewing the revised guidance with physician peers and developing a formal plan to roll out the changes within each organization to ensure documentation is audit proof.  Incorporating reminders for practitioners within the Electronic Health Record (“EHR”) to clearly notate complaint and history information, particularly HPI as prescribed currently by NGS, will enable practitioners to more easily defend their documentation as potentially more guidance is released by CMS or other MAC’s, as well as ensure quality documentation practices. 

Medical Necessity of Furnishing Home Visits

Prior to 2019, CMS required that the medical record must document the necessity of an evaluation and management service rendered in a patient’s home in lieu of an office or outpatient visit. Effective January 1, 2019, this requirement has been eliminated such that documenting the medical necessity of furnishing a visit in the home rather than in the office is no longer required.

Teaching Physician Documentation Changes

Documentation requirements have been amended, the presence of a teaching physician during the E&M service may be demonstrated by notes in the medical record recorded by a physician, resident or nurse effective January 1, 2019 and beyond. CMS stipulates the teaching physician is responsible for reviewing and verifying accuracy of notations previously included by residents and members of the medical team, requirements for teaching physician documentation of E&M services have now been relaxed. The medical record must document the extent of the teaching physician’s participation in the review and direction of services furnished to each beneficiary, and that additional documentation in the medical record is required if the notations previously provided did not accurately demonstrate the teaching physicians involvement in an E&M service.  

Payment for New Communication Technology-Based Services

Reflecting how health professionals can more effectively and efficiently use technology to connect with their patient at home, CMS has finalized payment for new services that will foster the use of communication technology. 

Referred to as a virtual check-in, HCPCS Code G2012 will be compensable when a patient “checks in” with a practitioner via telephone or other telecommunication device to determine whether an office visit or other service is needed. Additionally, HCPCS G2010 allows for payment when a practitioner reviews patient-transmitted photos or video to assess whether a visit is needed. 

Chronic care management and care coordination are among services incorporated into the new code set and the 2019 MPFS will allow practitioners to use technology to gather data, specifically for the purpose of remote monitoring.  CPT codes 99453, 99454 and 99457, have been added to the 2019 MPFS enabling a payment mechanism for care management via remote monitoring. 

Interprofessional internet consultations have also been incorporated into the MPFS enabling a payment mechanism for collaboration between a consultative physician and the patient’s treating physician.  Per CPT guidelines, codes 99446, 99447, 99448 and 99449 are time-based codes requiring both consultative discussion and a written report generated by the consulting physician, while newly compensable CPT codes 99451 and 99452 only require a written report. 

Expanding Telehealth

CMS is not only expanding the list of services payable via telehealth to include prolonged preventive service codes, G0513 and G0514, but they are also expanding the list of originating sites, particularly for beneficiaries with ESRD receiving home dialysis, as well as patients with symptoms of acute stroke.

Renal dialysis facilities, as well as the homes of ESRD beneficiaries receiving home dialysis, have been added to the list of permissible originating sites for purposes of furnishing the home dialysis monthly ESRD-related clinical assessments. Mobile stroke units have also been added as originating sites for telehealth services for purposes of diagnosis, evaluation, or treatment of symptoms of an acute stroke. 

Additionally, effective July 1, 2019 the home of an individual will be added as a permissible originating site for telehealth services furnished for purposes of treatment of a substance use disorder or a co-occurring mental health disorder.

Physician Fee Schedule – Increase in Conversion Factor

The 2019 Physician Fee Schedule conversion factor is up slightly from 2018. The conversion factor is set to $36.04, .05 above the 2018 PFS conversion factor of $35.99, to include the budget neutrality adjustment accounting for changes in RVUs.

Payment Rates for Non-Excepted Off-Campus Provider-Based Services

To align payments for non-excepted off-campus provider-based services with the MPFS, CMS established a relativity adjuster off the OPPS. In 2017, CMS finalized the MPFS as the applicable payment system for most non-excepted off campus provider-based services. In 2017 the relativity adjuster was fifty percent (50%) of the MPFS. In 2018 the relativity adjustment was forty percent (40%) of the OPPS, which  will remain in effect for 2019. 

Wholesale Acquisition Cost-Based Payment Reduction for Pricing New Part B Drugs

Reduction of the add-on payment applied to wholesale acquisition cost (“WAC”) pricing during the first quarter of sales for new drugs when Average Sales Pricing (“ASP”) is unavailable was finalized per the 2019 MPFS. MAC’s will use an add-on percentage of up to three percent (3%), rather than six percent (6%), when utilizing WAC pricing if ASP is unavailable. 

Discontinuing Functional Status Reporting Requirements for Outpatient Therapy Services

CMS finalized their proposal to discontinue functional status reporting requirements for services furnished on or after January 1, 2019. CMS caveats that while they are removing the claim reporting requirement "documentation instructions continue to require that therapists document in the beneficiary’s medical record, either in the evaluation or in the plan of care containing the evaluation, objective, measurable beneficiary physical function.”

Outpatient Physical Therapy and Occupational Therapy Services Furnished by Assistants

In advance of a payment adjustment impacting services rendered in whole or in part by physical or occupational therapy assistants, two new payment modifiers, CQ and CO respectively, were finalized in the 2019 MPFS. Reporting of modifiers CQ and CO becomes mandatory January 1, 2020. Implementation of these payment modifiers precedes the fifteen percent (15%) payment adjustment beginning January 1, 2022 and will apply when ten percent (10%) or more of a therapy service is rendered by either a physical or occupational therapy assistant.

Criteria for Advanced Diagnostic Imaging

Appropriate Use Criteria (“AUC”) will begin a testing year in 2020 whereby ordering professionals will use a qualified Clinical Decision Support Mechanism (“CDSM”) when ordering applicable imaging services. Furnishing professionals will be required to report AUC consultation information on the Medicare claim. 

2019 MPFS finalized three (3) hardship criteria for exclusion from the AUC program to include (1) insufficient internet access; (2) EHR or CDSM vendors issues; or (3) extreme and uncontrollable circumstances. Ordering professionals experiencing a significant hardship will be able to self-attest to their hardship status. 

Additionally, CMS added Independent Diagnostic Testing Facilities (“IDTF”) to applicable settings for AUC so that the program will be more consistently applied in outpatient settings.  CMS will allow AUC consultations to be performed by clinical staff under direction of the ordering professional, facilitating delegation of this requirement.

Changes to Outpatient E&M Coding and Payment Structure, Effective CY 2021

As we reported in our August 2018 HotStone, CMS proposed broad changes to office/outpatient, new and established visit codes (CPT 99201 through 99215) documentation and reimbursement protocols.  Many of the more sweeping changes have been delayed and will become effective in CY2021.  A condensed summary of the documentation and reimbursement changes is provided below: 

A . Documentation Changes Effective CY 2021 
Documentation changes effective calendar year 2021 will offer practitioners increased flexibility in determining E&M services 2-5. Practitioners will select the level of service based on one of the following options: 

  1. Use current framework (1995 or 1997 documentation guidelines). 

  2. Determine level of service based on Medical Decision Making (“MDM”).  All other documentation elements would need to meet current minimum E&M level 2 requirement. 

  3. Face to face time with patient. In addition to time, documentation must include medical necessity of visit. 

B. Collapsed Payment Rate  

  1. Single payment rate for E&M office/outpatient visit levels 2 through 4 for both established and new patients, specifically CPT codes 99202-99204; 99212-99214. 

  2. Level 5 visits; CPT codes 99205 for new patients and 99215 for established patients, will remain separately carved out and will not be collapsed into the single blended reimbursement rate. 

C. E&M Add-on Codes 

  1. Implementation of add-on codes for increased reimbursement for level 2 through 4 E&M visits which account for visit complexity; not restricted by specialty. 

  2. Adoption of a new add-on code for use with E&M visit levels 2 through 4, to account for additional time spent during extended patient visits.

Given the magnitude of these changes, we recommend and encourage providers to remain vigilant in their documentation practices and stay attune to guidance from CMS and the MAC’s. 

SunStone offers services specifically geared to assisting hospital based and independent multi-specialty physician groups manage the ever-changing professional regulatory environment.  If you have any questions, please contact Joli Fitzgibbons, Senior Manager at or Cathy Archuleta, Manager at