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Medicare 2019 Hospital Outpatient (HOPPS) and Physician Fee Schedule (PFS) Final Rules Summary

By, Michelle Weiss, CHONC, MSHO Senior Reimbursement Consultant

CMS issued Final Rules early November 2018. The Rules will update the payment policies for services furnished to Medicare patients in 2019, with some changes delayed until 2021. The Rules become effective on January 1, 2019. Below are a few highlights that may be of importance to an oncology program.
Hospital Outpatient Prospective Payment System
(Note: This Final Rule also included changes to the Ambulatory Surgical Center, and Quality Payment Programs for 2019)
Comment period for this Rule ended on December 3. Below are some of the most notable changes

  • OPPS Updated Payment Rates by 1.35%
  • Drug Packaging Threshold
    • Increased from $120 in 2018 to $125 in 2019
      • Drugs and biologicals whose per day cost is less than or equal to the packaging threshold will not be reimbursed separately
  • New Drug Reimbursement – (drugs without an established Average Sales Price (ASP) data)
  • New Drug Reimbursement – (drugs without an established Average Sales Price (ASP) data)
    • Will be reimbursed at wholesale acquisition cost (WAC) +3%
  • Biosimilars
    • CMS will continue its policy of making all biosimilar biological products eligible for pass-through payment, rather than just the first biosimilar biological product for a reference product
    • Biosimilars without pass-through status acquired by disproportionate share hospital or rural referral centers qualifying for 340B will be reimbursed at ASP -22.5% of the actual biosimilars ASP
    • Instead of the ASP of the reference product
  • CAR T Therapy
    • CMS established a payment rate for the procedure to administer CAR T cells; 0540T at approximately $288.38 (APC of 5694)
      • 0540T is the only 1 of 4 adopted by CMS OPPS
    • Kymria and Yescarta will continue pass-through status with codes Q2041 and Q2042
  • Drug Administration
    • 46% of the administration codes will be increased by 2.30% - 2.66%
    • Remaining decreases are between -.11% – -3.09%
  • Radiation Oncology (CPT Codes 76873 – 77799)
    • Have received slight reimbursement increases and decreases with the highest decrease payment of 6.2% for 77789 chemo infusion and 77799 chemo push
  • Hospital Outpatient Quality Reporting Program
    • No new measures for 2019
    • Hospitals that don’t report receive a 2%reduction in payments
    • CMS will modify and remove a total of 8 measures through 2021
  • Off-campus hospital outpatient provider based department (PBD) changes include
    • Section 603 Status - Grandfathered – established prior to 11/2/15
      • Clinic Visits (also called facility fee) (G0463)
  • To be paid at same rate of non-excepted PBD and phased in over 2 years
    • Beginning in 2019 – 70% of OPPS Rate
    • Beginning in 2020 – 40% of OPPS Rate
      • Limits the Expansion of Clinical Families of Services
  • CMS proposed limiting OPPS payments to services within an approved clinical family that were provided during a historical baseline period. Any new services provided outside of these families would be paid at the physician fee schedule rate. CMS did not finalize this proposal “but will continue to monitor th expansion of services in off-campus PBDs
    • Non-excepted – established after 11/2/15
  • Expanding the 2018 reimbursement policy to reimburse ASP –22.5% for on-campus outpatient departments and excepted off-campus PBD for separately payable 340B acquired drugs to the
    non-excepted PBD’s
  • Non-excepted PBDs will be required to append modifier “JG” to the same claim line as the drug or biological HCPCS code to identify that it has been acquired under the 340B drug discount program along with the PN modifier to indicate it was provided in a non-excepted location
    • Rural sole community hospitals, children’s hospitals, and PPS-exempt cancer hospital are not included in policy changes and will continue to be required to report modifier TB along with 340B drugs. They will still be paid at ASP +6%

Physician Fee Schedule Final Policy, Payment, and Quality Provisions Changes

Also released on November 1, 2018 with a comment period ending on December 31, 2018. Key provisions include a minimal increase to the conversion factor, setting the conversion factor at $36.04, slightly up from $35.99 in 2018. CMS estimates the impact of changes for hematology/oncology and radiation oncology to be minimal at -1%.

Additional key provisions which may be of interest to oncology

  • Streamlining Evaluation and Management (E & M) Documentation and Payment
    • For 2019 and 2020 – implementing several documentation policies
      • Continue current coding and payment structure
      • Eliminated requirement to document the medical necessity of a home visit in lieu of
        an office visit
      • Practitioners may choose to document what has changed since the last visit, or on pertinent items that have not changed, and need not re-record the defined list of required elements if there is evidence that the practitioner reviewed the previous information and updated it as needed
      • Practitioners should still review prior data, update as necessary, and indicate in the medical record that they have done so
      • For E/M office/outpatient visits, for new and established patients for visits, practitioners need not re-enter in the medical record information on the patient’s chief complaint and history that has already been entered by ancillary staff or the beneficiary. The practitioner may simply indicate in the medical record that he or she reviewed and verified this information
    • For 2021 – changes to documentation, coding
      and payment that would be implemented
      • Reduction in the payment variation for E/M office/outpatient visit levels by paying a
        single rate for E/M office/outpatient visit levels 2 through 4 for established and new patients while maintaining the payment rate for E/M office/outpatient visit level 5 in
        order to better account for the care and needs of complex patients
      • Implement add-on codes that describe the additional resources inherent in visits along with a new “extended visit” add-on code
      • Permitting practitioners to choose to document E/M office/outpatient level 2 through 5 visits using medical decision making or time instead of applying the current 1995 or 1997 E/M documentation guidelines, or alternatively practitioners could continue using the current framework along with other flexibility in how visit levels are documented
    • CMS did not finalize the proposed reduction in payment for visits provided on the same day as procedures (Modifier 25 reduction)
  • Adoption of two newly defined physicians’ services furnished using communication technology
    • Brief communication technology-based service, e.g. virtual check-in (HCPCS code G2012)
    • Remote evaluation of recorded video and/or images submitted by an established patient
      (HCPCS code G2010)
  • Part B drug reimbursement will remain at ASP +6% with the exception of drugs without an established ASP, reimbursement will be changed from wholesale acquisition price (WAC) +6% to WAC +3%
    • Of note: WAC based payment amounts typically exceed amounts based on ASP
  • Drug Administration Services
    • Reduced reimbursement in virtually every administration code utilized by medical oncology
      due to changes in relative value units (RVUs) and practice expense (PE) inputs. The largest reductions were on
      • 96372 – injection -18.88%
      • 96360 – initial hydration – 18.85%
      • 96374 – initial IV push -15.94%

More information on these Rules:

Physician Fee Schedule:

Hospital Outpatient Prospective Payment System:

Quality Payment Program: Year 3 overview fact sheet:

QPP quick start guide for MIPS 2019 participation:

Keep an eye on the MSHO biweekly Reimbursement Bulletin for additional updates.

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