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Policy Watch
The CMS Decision on Payment to Physicians Is in: What's Next?



THE MEDICARE RULE on E/M coding is expected to change neurology practice in every setting.

The AAN has prepared its response to the CMS 2019 proposed rule on E/M codes, anticipating three possible scenarios.

By the time you read this, the Centers for Medicare & Medicaid Services (CMS) should have just published their decision about how physicians are paid for outpatient visits in 2019, and the AAN staff and committee members are reading, digesting, and analyzing how this Final Rule will affect our members.

In response to the proposed rule released in July, the AAN submitted a 39-page comment letter to CMS, as well as congressional letters of opposition with 90 signatories from the House of Representatives, and 24 signatories from the Senate. They authored another letter to CMS with sign-on from 133 groups comprising both physician and patient organizations. In the intervening two months since submitting its response, the Academy has been working to prepare members for one of three scenarios: 1) CMS has listened to our organization and others and has abandoned its proposal to flatten its evaluation and management (E/M) outpatient fee structure; 2) CMS has ignored our concerns and is proceeding with its plan irrespective of opposition; and 3) CMS has delayed its decision and given the medical community more time to come up with an alternative solution and/or prepare for its execution.


Staff and members of the AAN's Center for Health Policy and its Medical Economics and Management Committee (MEM) have been developing a response plan for these potential outcomes, but believe that, as much as we may wish it, abandoning the flattening of E/M outpatient fee structure, is least likely.

CMS introduced this idea as its solution to reduce provider documentation burden and has aligned it with their Patients over Paperwork initiative. In fact, CMS Administrator Seema Verma has turned to social media on a regular basis to refute the arguments posed by medical organizations like ours. For example, on September 10, she tweeted: “CHARGE: This E/M Codes proposal would negatively impact physician compensation. The proposal is budget neutral across the board, although it would move some dollars around...and we believe any negative payment adjustments will be outweighed by the dramatic reduction in administrative burden, allowing clinicians to spend more time with their patients.”

“Another reason CMS is unlikely to abandon its plan is that it would be unable to support new payment initiatives for expansion of services (such as telemedicine) to create access and possibly decrease total cost of care without decreasing the amount spent in other areas,” said Gregory J. Esper, MD, MBA, FAAN, vice chair of clinical affairs for Emory neurology, and associate chief medical officer of Emory Healthcare. “They've reduced payments already for many procedures, like our electromyography codes, but E/M has been untouched since 2010.

“If history tells us anything — remember the 2010 consult code loss? — CMS will do what is required in an attempt to maintain budget neutrality,” he added.


Many of us predict that given the unforgiving timeline — two months to prepare for an entirely new system of documentation, a novel set of Current Procedural Terminology (CPT) codes for use in our electronic health records and billing systems, and potential Relative Value Unit (RVU) losses with implications for employee compensation and patient scheduling — that the second outcome is unlikely. It would also disregard the overwhelmingly negative response from the physician community. Moving forward full steam ahead would be sure to throw the healthcare system into chaos. It would also create a series of unintended consequences that may backfire for CMS and harm patients (read “Why the 2019 CMS Proposed Fee Schedule Could Portend Financial Catastrophe for Neurology’; Neurology Today, October 4, 2018).


Unless CMS can think up an unexpected alternative, it is likely that it will ask the medical community to help revamp the current system. To get ready, the AAN is already working with several organizations, including the American Medical Association (AMA) CPT/ Relative Value Update Committee (RUC) group and the Coalition for Patient-Centered Evaluation and Management (E/M) Services, on revisions of the E/M system.

There are two major contenders to restructuring E/M reimbursement: payment exclusively based on time and payment exclusively based on medical decision-making, and a variety of hybrids of the two. Neurology Today spoke to our RUC and CPT representatives and asked them to explain who would benefit under each system.

“The fairest alternative to the current system is reimbursement based on time,” said Marc Raphaelson, MD, who has represented the AAN on the AMA RUC group since 2009. Dr. Raphaelson sees it as the only way to preserve the care of complex patients.

“The medical decision-making system no longer distinguishes neurology patients from those in family practice or internal medicine,” he said.

Dr. Raphaelson explained that under our current system, the billing profile for those specialties has become similar to the neurology profile, whereas ten to twenty years ago the neurology billing profile was skewed toward higher reimbursement than those specialties.

“Many neurologists have learned to beat the clock by using bullets to calculate higher E/M levels, but even more primary care specialists have learned to do this and are beating the clock on a regular basis,” he said.

Dr. Raphaelson supports a time-based proposal for several reasons. First, in a resource-based payment system, such as the one we have now, the main cost for an E/M visit is the provider's time. Second, CMS already has a time-based system. The 1995-1997 Documentation Guidelines for E/M Services developed a new coding system, based on the intensity and complexity of the history, physical exam, and medical decision making (HPMDM). In surveying these services, RUC found that each of the five types of E/M services could be performed in a “typical” time. RUC valued each service based largely on the typical times, and the difficulty of the office visit contributed only a little to its value. Those recommended times and values were adopted by CMS. Thus, CMS already has a time-based system for paying doctors: the “typical” times associated with every E/M code.


DR. GREGORY J. ESPER: “Another reason CMS is unlikely to abandon its plan is that it would be unable to support new payment initiatives for expansion of services (such as telemedicine) to create access and possibly decrease total cost of care without decreasing the amount spent in other area.”

Bruce H. Cohen, MD, FAAN, chair of the AAN Coding Subcommittee, and CPT advisor, said he agrees with Dr. Raphaelson's rationale. But, he added, “the problem with reimbursement based on time alone is that there is no incentive to reward efficiency.”

“With bullets, those neurologists who are super-efficient or those that use HPMDM to get to level 5 on established patients can see four level 5 established patients in an hour or one level 5 new patient in 30 minutes,” Dr. Cohen said. “So, many people believe that time alone is going to be difficult for many doctors to accept because it puts a limit on the day's billing, he explained.

Neil A. Busis, MD, FAAN, CPT alternate, and the former chair of MEM, concurs. “The problem with time is that it does not directly reward experience, expertise, speed, or efficiency. It could measure non-medical conversation along with the real elements of the E/M encounter for a given visit,” he explained. “And it does not account for complexity unless there is a modifier.

“If total time is used, and the work of the encounter is spread across the day, it may be difficult to accurately document the total time without logging into and out of a time monitoring program over and over again,” he pointed out.


DR. NEIL A. BUSIS: “The problem with time is that it does not directly reward experience, expertise, speed, or efficiency. It could measure non-medical conversation along with the real elements of the E/M encounter for a given visit. And it does not account for complexity unless there is a modifier.”

Medical decision-making (MDM) is appealing as an alternative in that, theoretically at least, it measures what physicians really do, Dr. Busis offered. “The problem is that no one has ever figured out how to measure it accurately. The CPT definitions are too vague to be used verbatim and the more concrete methodologies vary among different regions and payers,” he explained.

Traditionally, diagnoses, data reviewed, treatment options, and risk of diagnoses, tests, and treatments are used to determine MDM but it's quite hard to do it consistently accurately in the real world, Dr. Busis contends.

Dr. Cohen and Dr. Busis also agreed that if you know the rules, it's easy to game the system.

Dr. Raphaelson argues that the HPMDM system is technologically obsolete. Why? Because we can copy and paste enough information in every note to make every visit a high-level visit as defined in the Guidelines. Who meets a level 4 visit? “Basically, anyone who has two or more stable chronic illnesses, even if well controlled, or one chronic illness with mild exacerbation, progression, or side effects of treatment, and requires prescription drug management,” Dr. Raphaelson explained. “And everybody has two or more diagnoses: Obesity, hypertension, hyperlipidemia, headache, insomnia, sleep apnea, thyroid disorder, depression, anxiety, neck/back pain, arthralgia, reflux, seasonal allergies, upper respiratory illness, urinary tract infection — you pick them.”

And almost everybody who is an established patient, returning for care, is on a prescription medication for regular or prn use, he added.


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Indeed, a September 20 review by the New England Journal of Medicine showed that 50 percent of visits by internal medicine are levels 4 and 5, and slightly over 50 percent of family practice visits are levels 4 and 5. “These patients are not as complex as the typical neurology patient, although they may meet the HPMDM guidelines,” Dr. Raphaelson said. “We might agree that internal medicine and family practice patients are, indeed, more complex than they were 10 to 20 years ago, but so are neurology patients, and we hit a ceiling at level 5 when describing the complexity of our patients,” he noted. “We would need, say, seven levels to distinguish complex patients but that will be acceptable politically,” he said.

Regardless of which argument prevails, Dr. Esper believes that when all is said and done, CMS is motivated by a vision to provide high-value care to Medicare beneficiaries, and as representatives of the senior consumer they will force doctors to provide high-value care by accelerating Advanced Alternative Payment Models. “The reduced E/M codes may motivate us to adopt those at a more rapid pace,” he concluded.


In 2015 neurologists Kevin Kerber, MD; Marc Raphaelson, MD; and others set out to determine whether the Centers for Medicare & Medicaid Services (CMS) Physician Fee Schedule confers higher value for physician work in procedure and test codes than in Evaluation and Management (E/M) codes.

“We found that the physician work is valued at average 0.04 RVU/minute, or about 2.4 RVU/hour, for almost all types of medical services with about 15 percent variability around that median value,” said Dr. Raphaelson.

If the time estimates were correct, the range of pay among specialties would be only about 20 percent. “The inaccurate times for so many procedures disadvantage E/M services,” he said. “If we were to reconstruct the physician fee schedule, we might simply value the service time at 0.04 RVU/minute, then modify it by 15 to 20 percent depending on the intensity or complexity of the service,” he suggested.

—Orly Avitzur, MD, MBA, FAAN


•. Berenson RA, Lazaroff A. The false choice of burden reduction versus payment precision in the physician fee schedule Health Aff 2018. August 15, 2018.
    •. Song Z, Goodson JD. The CMS proposal to reform office-visit payments N Engl J Med 2018; 379(12):1102–1104.
      •. Kerber KA, Raphaelson M, Barkley GL, Burke JF. Is physician work in procedure and test codes more highly valued than that in evaluation and management codes Ann Surg 2015;262(2):267–272.
        •. More about the AAN response and access to a financial calculator to assess the impact of the E/M changes: