Published August 30, 2019

Key Provisions of the 2020 Medicare Physician Fee Schedule Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) published its 800-page 2020 Medicare Physician Fee Schedule Proposed Rule August 14, 2019.  The agency was accepting comments through September 27, 2019.  Any interested party could submit comments electronically via, referencing “CMS-1715-P.”  The 2020 Final Rule will be published by year’s end, likely before Thanksgiving.

Conversion Factor.  In the Proposed Rule, CMS announced that physicians will see a 0.14% increase in the Medicare conversion factor, from $36.04 in 2019 to $36.09 in 2020.   The calculation of the annual conversion factor is mandated under the Medicare Access and CHIP Reauthorization Act of 2015.  Any additional increase would require congressional action.

RVU Updates.  CMS estimates that its proposed updates to work, practice expense, and malpractice relative value units (RVUs) for 2020 will result in minor changes in total allowed charges for some specialties, as illustrated below:

MPFS Chart 1b

All other specialties are expected to experience no more than a 1% gain or loss in total allowed charges due to proposed RVU changes.  Keep in mind that CMS’ estimates are based on the entire specialty, and the impact of the proposed RVU changes can vary widely depending on the mix of services provided in a practice.

Appropriate Use.  Other big news in the Proposed Rule includes CMS’ announcement that it will not further delay the January 1, 2020, implementation of the long-awaited mandate requiring that clinicians consult appropriate use criteria through a qualified clinical decision support mechanism when ordering advanced imaging services. For a detailed explanation of these requirements, please refer to this MLN Matters article.

2021 E/M Changes.  CMS also remains on track to overhaul documentation and payment policies for evaluation and management (E/M) services.  CMS now proposes to adopt revised E/M code definitions developed by the AMA CPT Editorial Panel effective January 1, 2021.  CMS also intends to pay for each level of service rather than utilize a blended rate and to adopt revised work and practice expense inputs for E/M services.

CMS included in the Proposed Rule its estimated impact of the E/M changes on specific specialties’ total allowed charges in 2021, which range from a 16% increase for endocrinologists to a 10% decrease for ophthalmologists.

MPFS Chart 2c

New Medicare Reimbursement for Principal Care Management.  Since 2015, Medicare has reimbursed physicians for chronic care management (CCM) furnished to beneficiaries with multiple chronic conditions.  CCM involves non-face-to-face services furnished by clinical staff under general supervision of the billing practitioner, pursuant to a written care plan.  These services include, for example, care coordination, medication reconciliation, and patient education.  Generally, CCM is intended for the long-term management of high-cost patients by primary care providers.

CMS now proposes to reimburse physicians for principal care management (PCM) furnished to beneficiaries with a single chronic condition.  CMS contemplates that PCM services will be furnished under the supervision of a specialist for a limited time to stabilize the beneficiary’s condition.  The following summarizes the key differences between CCM and PCM services:

MPFS Chart 4_new

CMS offers no explanation why it assigned fewer RVUs (and thus lower reimbursement) to PCM than CCM, despite PCM requiring 10 more minutes of clinical staff time per month.  Hopefully, CMS will address this issue in the Final Rule.

As proposed, PCM becomes a strong alternative to CCM for specialists engaged in care management activities.  CCM has always been challenging for specialists as they often only manage one (or a subset) of a patient’s chronic conditions.  With PCM, that focus becomes the purpose—shorter-term care management of a single chronic condition—and specialists will likely find it easier to meet the code’s billing requirements.

MIPS Value Pathways

Also in the Proposed Rule, CMS introduces an updated framework for its key value-based payment program, called MIPS Value Pathways, or MVPs.

The Merit-Based Incentive Payment System (MIPS), when first introduced in 2015, was meant to streamline the various CMS quality reporting programs into a single program.  But unfortunately, that has not come to fruition, and MIPS itself is largely considered overly burdensome on providers.  There are hundreds of different ways to meet the baseline requirements and avoid a financial penalty, which sacrifices simplicity for unnecessary flexibility.

To address these challenges, and give clinicians the chance to report on fewer, more meaningful measures, CMS proposes starting a rollout of MVPs in 2021.

What are MVPs?  The proposed MVPs are best described as condition- or specialty-specific groups of cost, quality, and improvement measures.  CMS is proposing to pre-select and group those measures for providers, to relieve the burden of choice and re-focus the program on the most important health priorities (i.e., quality over quantity).

What are the benefits of MVPs compared to MIPS?  Simply put, MVPs are meant to make reporting simpler and generate more meaningful results.  CMS has identified the following benefits:

MPFS Chart 3_new

How will this change the reporting process?  Clinicians will no longer be required to select quality measures and improvement activities from a massive list of options.  Instead, CMS will assign (or make available a small list of) MVPs to groups or clinicians, based on the provider’s specialty or patient panel.  Clinicians will sacrifice choice and flexibility for a more standardized approach.  All measures within an MVP are required.

What will MVPs look like?  CMS included four examples of possible MVPs in the Proposed Rule, including preventive health, diabetes prevention and treatment, major surgery, and general ophthalmology.  Each includes four to five quality measures and two to three improvement activities.  It is likely CMS will follow the same formula for other specialty-specific MVPs.

MPFS Chart 5

Can groups still participate together?  Like the current MIPS program, group reporting will continue as an option for providers within a single TIN.  For single-specialty groups, the transition will be relatively seamless, as a single MVP will likely apply to all members of the group.  For multispecialty groups, however, CMS will likely require the group to report multiple MVPs.  The logistics of that approach are not well defined, so look for more clarification on this during the next 18 months.

How will this change the way clinicians are scored?  One of CMS’ guiding principles for MVPs is that they “should include measures and activities that would result in providing comparative performance data that is valuable to patients and caregivers in evaluating clinician performance and making choices about their care.”  A chief complaint against MIPS as currently constructed is that there is no way to effectively compare performance across providers, because there is so much variability in what measures are reported.  MVPs should address that by narrowing the scope of reporting.  As a result, it is fair to expect a wider range of performance across any one MVP, and more variation across providers.

What is the timing for MVPs?  CMS is proposing a transitional rollout of MVPs in 2021; it is expected that at least some MVPs will be defined and available for reporting.  If a clinician does not have an applicable MVP by 2021, that clinician would continue reporting MIPS as the clinician currently does.  In the Proposed Rule and various fact sheets, CMS refers to a 3- to 5-year complete transition period, during which MVPs will be modified and added.

For more information regarding Medicare physician payment policy, or for assistance with any matter involving strategy and integration, compliance, or valuation, contact one of our PYA executives below at (800) 270-9629.


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