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CMS releases final 2020 Medicare physician fee schedule

November 12, 2019
Area(s) of Interest: Payor Issues and Reimbursement Practice Management 


The Centers for Medicare and Medicaid Services (CMS) recently released its final rule updating the Medicare physician fee schedule, quality payment program and other Medicare payment policies for 2020.

The rule covers diverse topics, including major evaluation and management (E/M) payment changes, updates to the quality reporting program and geographic payment adjustments. Below is an overview of some key topics included in the final rule.

New E/M coding system for 2021

The final rule includes major changes to the E/M coding system. CMS will implement coding and payment modifications in 2021 that are based on the resources required to perform various levels of office visits. This will ensure that physicians treating the sickest patients are not unfairly penalized, while providing simpler solutions to coding and documentation.

CMS largely accepted the CPT guidelines and recommendations proposed by the American Medical Association (AMA)-convened workgroup, which align E/M office visits with two elements – time or medical decision-making – for reporting purposes. The CPT coding changes will retain five levels of coding for established patients, reduce the number of levels to four for new patients and revise the code definitions. A new CPT code for extended office visit time will also be implemented.

However, some aspects of the final rule depart from AMA’s recommendations and will exacerbate the negative payment impacts from this policy change on physicians in certain specialties. Although the surgical specialties were incorporated into AMA’s guidelines, the final CMS rule does not apply the office visit increases to the global surgery packages. The national surgical specialty societies are considering legal action to stop the policy from taking effect.

While the California Medical Association (CMA) supports the positive changes to the E/M system, we are opposed to the omission of the global surgical codes in the new E/M coding system. This final rule will disrupt the relativity between procedures across the entire Medicare fee schedule and create inappropriate specialty differentials in payment for physicians providing the same service.

Quality Payment Program

While CMS continues to promise action on its “Patients Over Paperwork” initiative, the agency did very little in the  final rule to reduce administrative complexity in the 2020 rule. Over CMA’s and AMA’s objections, CMS has increased data completeness requirements from 60% to 70% beginning in 2020. This means physicians will need to report on quality measures for at least 70% of their patients.  

CMS did, however, reverse its initial proposal to increase the weight of the physician expenditure “cost category.” CMS agreed with recommendations from CMA, AMA and others in organized medicine not to increase the weight of the cost category due to a lack of sufficient feedback for physicians so they can understand how they are evaluated on costs. 

CMS importantly reduced the impact of costs beyond a physician’s control by revising the Total Per Capita Cost and Medicare Spending Per Beneficiary methods and eliminated costs that were erroneously attributed to physicians. The new formula will also exclude physicians in specialties unlikely to be providing primary care to a patient. These are small but important wins for physicians.

California Geographic Payment Locality Transition

The 2020 Medicare Physician Fee Schedule will implement the final phase of the California geographic payment fix, which is transitioning California payment localities to Metropolitan Statistical Areas. CMA is analyzing the GPCI changes and we will issue more details once our analysis is finished.

Additional highlights from the final rule include:

  • Telehealth: There are several new Telehealth G codes eligible for payment.
  • Medication Assisted Treatments for Opioid Use Disorders: Last year, federal legislation authorized Medicare payment for certain opioid  use disorder treatment and medication assisted treatments. Those new payment rates and services are outlined in the proposed rule, including bundled payments.
  • Care Management: CMS finalized its policy to increase payment for Transitional Care Management.

For more information, see AMA’s summary of the final rule.

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