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Policy Watch

Why the 2019 CMS Proposed Fee Schedule Could Portend Financial Catastrophe for Neurology

Avitzur, Orly, MD, MBA, FAAN

doi: 10.1097/01.NT.0000547378.32357.d0
Practice Matters
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ARTICLE IN BRIEF

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The proposed 2019 CMS Physician Fee Schedule changes in E/M coding could have a dire impact on neurology departments. Neurology leaders discuss how and why the proposed coding changes could imperil their science and education mission as well as patient care.

This past July, the Centers for Medicare & Medicaid Services (CMS) dropped a bombshell. In its new proposed physician fee schedule for 2019, CMS said doctors who participate with Medicare will be paid the same flat fee for an outpatient visit ($92 for established patients, $134 for new patients) regardless of the length of time or complexity of the visit. The possible impact? The proposed rule, which would go into effect in January, could threaten not only the viability of neurology practice but also every neurology department's academic mission to support science and education, ultimately compromising the pipeline to neurology.

The plan, as written, is poised to impact most neurologists who care for the sickest and most complex patients. The proposed payment rate is just slightly above the reimbursement of present day level 3 codes, which currently call for a medical-decision making of a low complexity. For physicians who typically see complicated patients and bill a large number of the 99204 and 99205 new patient codes, and 99214 and 99215 established visit codes, this means a sizeable loss of revenue.

The proposal also creates an incentive for employers of physicians in practices, hospitals, and health systems to reduce the scheduled time for all visits in order to increase the volume — after all, a one-minute visit will reimburse the same amount as a 45-minute visit. As a result, experts predict that employers will be incentivized to instruct their practitioners to shorten the time of their appointments, address only one medical problem per visit, and to send complex patients to academic centers.

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REVENUES WILL DECREASE

Neurology departments, already operating on tight margins, will likely feel a greater squeeze as the most time-consuming patients are shifted further out of the community and into their waiting rooms. This comes at a time when the codes for long-term EEG monitoring — services that bolsters the bottom line in many departments — are being reviewed, and when we expect the release of several more ultra-high-priced, neurologic drugs, further taxing a system that is still struggling to manage the cost of administering nusinersen (Spinraza), eteplirsen (Excondys 51), and edaravone (Radicava), among others.

Kenneth L. Tyler, MD, FAAN, the Louise Baum endowed chair of the department of neurology at the University of Colorado School of Medicine, has examined a recent analysis of the proposed changes and estimates that his department would likely lose almost $500,000 in revenue each year on the new E/M proposal, even if a specialty add-on bonus were to be included.

“We will still see about a 15 percent Medicare revenue drop,” Dr. Tyler calculated, and with 30 percent of his department's patient mix comprised of Medicare, this will net around a 4 to 5 percent total revenue drop. “We haven't previously ‘throttled’ or restricted Medicare patients,” he said, “but if this goes through, we will almost certainly have to limit their access and give preference to those with more appropriate coverage.”

Gregory J. Esper, MD, MBA, FAAN, vice chair of clinical affairs for Emory neurology, and associate chief medical officer at Emory Healthcare, said they are also in the process of modeling the financial consequences across all of the Emory Clinic. “I believe these cuts would be disastrous for our section profit/loss statements, especially given the extensive time we need to take care of patients.”

Dr. Esper, who chairs the AAN Health Services Research Subcommittee, explained that access is already limited by the time required to care for complex patients often seen in disproportionate numbers at academic medical centers. He fears that Emory's care models would be unable to change rapidly enough to avoid a tremendous revenue hit.

“I can't imagine Emory neurologists will say that it's fine to increase their patient load by 30 to 50 percent in the same amount of time because it will compromise the care they can provide,” he said. “When you make life and death decisions with ALS patients, discuss the ramifications of new antiepileptic medications, or take care of a patient with Parkinson's disease who is so disabled that it takes her ten minutes to walk from the waiting room to the clinic room when called, it is neither fair to the patient nor the neurologist to ask them to cram a 30-minute visit into a 10- or 15-minute visit so that they can replace the loss in revenue from a misguided policy.”

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A. Gordon Smith, MD, FAAN, chair of the department of neurology at Virginia Commonwealth University (VCU) and chair of the AAN Education Committee, is also concerned about how an influx of complex patients from the community will impact academic centers across the country. “We can't and don't want to close our practices. Access is already a significant issue at every academic institution and certainly, here at VCU,” he observed. “I worry about how we can all reabsorb the extra workload.”

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DOWNSTREAM REVENUE ACCOUNTING

Dr. Smith also has concerns about how this will affect the compensation systems of employed neurologists. Like many compensation systems, VCU has a relative value unit (RVU) based plan in which employed physicians receive a base salary, which is benchmarked, and an incentive bonus based on additional productivity targets. “If the department's productivity declines precipitously due to seeing sicker patients and incurring cuts in reimbursement, we will have to absorb a substantial loss,” he said.

“The impact will be disproportionally greater on specialties like neurology and rheumatology, which provide a higher percentage of non-procedural care,” Dr. Smith continued. “And with the uncertainty of long-term EEG monitoring codes, there is the potential for further negative impact in 2020.”

“If you look at the new RVU projections, they are dreadful,” Dr. Smith said. “I worry it will create a race to the bottom. If these changes go through it will be imperative for institutions to understand and compensate specialties like ours for downstream revenue — funds generated by inpatient admissions, outpatient visits, and ancillary services provided by neurology departments.”

John D. England, MD, FAAN, chair of the department of neurology at the Louisiana State University Health Sciences Center in New Orleans, added: “Administrators at medical schools and hospitals are already being petitioned to provide neurology departments with ‘downstream revenue’ accounts and most of us have tapped into this nearly as much as we can. If the proposal is enacted, other specialties that are primarily non-procedural will argue for more downstream accounting and the pie is only so large...”

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SCIENCE AND EDUCATION MISSION

And what about the mission of science and education? “Since most academic neurology departments depend upon clinical revenues to fund much of their operations, a decline in clinical revenue will threaten the entire enterprise,” Dr. England said. “Clinical revenue through E/M visits and contractual clinical dollars help to subsidize the other missions of research and education, and with a substantial decline in clinical revenue, departments will be forced to see more patients just to stay even.”

Clinical neuroscientists and educators will need to see more patients just to support their salaries and as a consequence, these physicians will have less protected time for research and education, he explained. “Of course, this is a vicious cycle which will result in less productivity for research and less ability to compete for grants. Young clinician-neuroscientists already have a tough road ahead of them, and I predict that such changes will ultimately threaten their careers in science.”

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COMPROMISED PATIENT CARE

Ultimately, the proposed changes will have an impact on patient care. Lyell K. Jones, MD, FAAN, associate professor of neurology at the Mayo Clinic in Rochester, MN, and chair of the AAN Registry Committee, said, “A direct and obvious effect will be the disincentive for providers to take care of patients who require longer patient visits.”

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“The long term, indirect effects of this collapsed rate proposal are equally dystopian,” Dr. Jones said. “Mirroring the disincentive to take care of patients with complicated disorders, CMS is creating a potent incentive for providers to see patients in shorter office visits, which would effectively be paid at a higher rate than the past — patients who need longer visits may be pressed into brief office visits, increasing the risk of medical error.”

Dr. Jones, who serves as chair of Payment Model Operations at Mayo, cautioned, “Given time constraints, patients may have to return for additional visits, increasing costs to the patient such as copays, travel costs and time for missed work.”

He also warns that with less time to sort out complicated problems in the office, utilization of intensive diagnostic resources such as expensive imaging may increase. Dr. Jones anticipates that Medicare's plan may ultimately backfire.

“By creating a powerful behavioral incentive to see more patients in shorter visit slots, the overall costs to the system may increase at a higher rate, resulting in the opposite of CMS's intended effect on costs,” he warned.

Dr. Esper who serves as vice president of Lean Promotion at Emory Healthcare, which contributes to process improvements aiding the approach to value-based care, said: “Emory has many thousands of covered lives in commercial and Medicare Advantage plans and the resource investment has already been substantial. However, we may need to reassess and redesign our care models depending on what happens with the revenue stream.”

“With decreased MIPS reimbursement (see Web extra), the cuts in Evaluation & Management codes and increased operating expenses required to comply with regulatory laws, I believe the outlook for academic medicine, and medicine in general, is bleak if this course continues,” Dr. Esper said.

But some experts believe that there will be some winners in this proposal and that the payments received by a large group practice that includes primary care providers, surgeons and subspecialists should be revenue neutral.

“An initial discussion with a member of our administration suggested that neurology (and other subspecialty services impacted negatively) will still be valued with this proposal and that these departments should not be ‘punished,’” said Bruce H. Cohen, MD, FAAN, chair of the AAN's Coding Subcommittee and director of the Akron Children's Hospital NeuroDevelopmental Science Center. “However, we do not really know if this benevolent and appropriate position will be adopted by other medical centers.”

“The reduction in payments will likely result in physicians changing their practice patterns, which may include a decision to reduce their participation in Medicare among other consequences,” Dr. Cohen added.

All agree that the most severe impact will be on patient care. Said Dr. Esper: “My concern is that any system that requires you to do much more with much less at the flip of a switch will break, and those who suffer most will be the patients.”

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WHAT MEMBERS CAN DO

  • Assess your practice's E/M billing patterns to estimate how you may be impacted by the proposed payment changes.
  • Review the amount of time your practice spends on each level of E/M service to understand scheduling changes that may be necessary.
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WHAT IS CMS PLANNING FOR MACRA?

In an interview with Neurology Today, Lyell Jones, MD, FAAN, associate professor of neurology at the Mayo Clinic in Rochester, MN, and chair of the AAN Registry Committee, explained how the 2019 proposed rule could impact the Quality Payment Program (QPP), also called Medicare Access and CHIP Reauthorization Act (MACRA), the 2015 law that created the program).

Dr. Jones noted that through these programs CMS has indicated its clear commitment to value programs. These programs, including the Merit Based Incentive Payments System (MIPS) and Advanced Alternative Payment Model (AAPM) pathways in QPP, are generally designed to reduce system costs over time while maintaining or improving quality of care. In short, despite rumors to contrary, MACRA isn't going anywhere anytime soon.

In the 2019 proposal, most of the changes are to the MIPS pathway and are in line with expectations. MIPS incentives in 2019, which would be applied to 2021 payments, will once again widen to a range of incentive of up to 6 percent and potential penalty of up to -6 percent (+/- 6%). The performance threshold needed to avoid penalties will increase to 30 points, from 3 points in 2017 and 15 points in 2018. The low volume participation threshold will remain relatively high, which will benefit small and solo neurology practices who wish to be exempt from MIPS. However, with a smaller pool of practices participating, the available pool of funds to redistribute in this cost-neutral program will remain smaller than anticipated.

As we saw in 2017, practices who don't participate or meet the performance threshold are exposed to the full negative incentive (-4 percent in 2017, -6 percent in 2019), but have a limited upside (the highest performers in 2017 received 2 percent bonuses, and most were less than 1 percent). Critics of the program point out that the asymmetry between penalties and bonuses in MIPS create a more potent incentive to avoid the program than make the investments needed to perform well in the program.

One of the critiques of the QPP is that it creates few opportunities for specialists like neurologists to participate in the AAPM (Advanced Alternative Payment Model) pathway, the other arm of MACRA compliance. Large neurology departments, as constituents of academic institutions and health systems, may have greater opportunities to pursue participation in population-based AAPMs such as Accountable Care Organizations (ACOs). These models provide benefits ranging from avoidance of MIPS penalties to potential bonuses from CMS. Department chairs and practice leaders should work with institutional leadership to determine if ACOs or other payment models will be pursued, and if so how they will affect not only the finances but the clinical care delivered by the department.

There is a broad and unwavering consensus from payers that they will continue to explore and adopt value payment models. While the form and structure of these payment models may change with the political environment, reducing costs of care is one of the few truly bipartisan issues among policymakers. CMS specifically has been very consistent in its stated commitment to value-based payment.

—Orly Avitzur, MD, MBA, FAAN

© 2018 American Academy of Neurology