2018 providers starting new practices should know how to avoid decreased medicare fee adjustments

How many family doctors are dropping out of Medicare?

Some 9,539 doctors dropped out of Medicare practice in 2012. That’s risen dramatically from 3,700 in 2009. Now, 81 percent of family doctors will take on seniors on Medicare, a survey by the American Academy of Family Physicians found. That figure was 83 percent in 2010. Some 2.9 percent of family doctors have dropped out of Medicare altogether.

How much will Medicare payments for clinic visits be cut?

This year, the policy's two-part phase-in cut Medicare payments for clinic visits to outpatient departments by 30%, according to the rule finalized in November. By 2020, the payment rates will be cut by 60% compared with what they were last summer.

What changes are coming to Medicare in 2018?

As we head into the 2018 enrollment period, you should be aware of three notable changes to Medicare or the Medicare Advantage market, along with one aspect of Medicare that surprisingly didn't change for some folks. 1. Rejoice! Part D premiums are going down

Does Medicare payment keep up with innovation and inflation?

With Medicare playing a vital role in the delivery of health care in the U.S., Congress must take steps to ensure that Medicare payment keeps pace with innovation and inflation and is reflective of the cost of medical care and the value of services provided to beneficiaries.

When did Medicare change the physician fee?

Final Policy, Payment, and Quality Provisions Changes to the Medicare Physician Fee Schedule for Calendar Year 2019. On November 1, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that includes updates to payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee ...

When will Medicare start providing opioid treatment?

Additionally, the SUPPORT for Patients and Communities Act establishes a new Medicare benefit category for opioid use disorder treatment services furnished by opioid treatment programs (OTP) under Medicare Part B, beginning on or after January 1, 2020.

What is the PFS conversion factor for 2019?

With the budget neutrality adjustment to account for changes in RVUs, all required by law, the final 2019 PFS conversion factor is $36.04, a slight increase above the 2018 PFS conversion factor of $35.99.

What is the 2019 PFS rule?

The calendar year (CY) 2019 PFS final rule is one of several final rules that reflect a broader Administration-wide strategy to create a healthcare system that results in better accessibility, quality, affordability, empowerment, and innovation.

What percentage of a PTA is furnished by a PTA?

CMS is also finalizing a de minimis standard under which a service is furnished in whole or in part by a PTA or OTA when more than 10 percent of the service is furnished by the PTA or OTA, instead of the proposed definition that applied when a PTA or OTA furnished any minute of a therapeutic service.

How long are the add ons for ambulances?

The Bipartisan Budget Act of 2018 extended the temporary add-on payments for ground ambulance services for 5 years. The three temporary add-on payments include: (1) a 3 percent increase to the base and mileage rate for ground ambulance transports that originate in rural areas; (2) a 2 percent increase to the base and mileage rate for ground ambulance transports that originate in urban areas; and (3) a 22.6 percent increase in the base rate for ground ambulance transports that originate in super rural areas. These provisions were set to expire on December 31, 2017, but have been extended through December 31, 2022. The Bipartisan Budget Act also increased the payment reduction from 10 percent to 23 percent for non-emergency basic life support transports of beneficiaries with end-stage renal disease for renal dialysis services furnished other than on an emergency basis by a provider of services or a renal dialysis facility. This provision is effective with ambulance services furnished on or after October 1, 2018. CMS has revised the applicable regulations to conform with these requirements.

What is practice expense?

Practice expense (PE) is the portion of the resources used in furnishing a service that reflects the general categories of physician and practitioner expenses, such as office rent and personnel wages, but excluding malpractice (MP) expenses.

When will Medicare split the conversion factor?

Under MACRA, Medicare will once again split the conversion factor beginning in 2026. This time, however, payment rates will vary based not on specialty, but on payment model. Physicians who remain in traditional fee-for-service payment arrangements will be paid less for services they provide than physicians who participate in payment models known ...

What factors go into determining Medicare physician compensation?

A number of factors go into determining overall Medicare physician compensation, such as the number of RVUs assigned to a given service; however, without an overall realistic update in place, payments will continue to lose ground to inflation.

What penalties did MACRA eliminate?

In addition, MACRA eliminated penalties associated with prior Medicare quality programs, such as the Physician Quality Reporting System (PQRS), the EHR Incentive Program, and the Value-based Payment Modifier.

How is Medicare reimbursement calculated?

For a given service or bundle of services, the relative value units (RVUs) assigned to that service are multiplied by a dollar amount referred to as the conversion factor.

What factors affect physician payment?

Another factor that could affect physician payment is potential changes to office/outpatient E/M codes. In the calendar year (CY) 2019 Medicare Physician Fee Schedule (MPFS) final rule, CMS set forth a policy that would have combined levels 2–4 new E/M codes, and paid physicians at a blended rate of the previous E/M code levels starting in CY 2021. But in the CY 2020 MPFS proposed rule, CMS proposed a dramatically different change to E/Ms that would instead maintain the separate levels, but increase the values of E/Ms, again starting in CY 2021. Unfortunately, this current proposal will not apply the increased E/M values to the E/M values incorporated into global codes. At this time there is great uncertainty regarding how CMS will move forward, but there is a strong likelihood that potential increased payments for E/Ms will shift payment from surgery to primary care, given budget neutrality requirements for physician payment.

When does Medicare 0 percent expire?

Medicare payment rates are about to enter a six-year period of 0 percent updates, during which early MACRA incentives also are set to expire, meaning many physicians will be faced with lower payment rates based on factors out of their control, not on the quality of care they are providing.

When did Medicare release its annual report?

In April 2019 , Medicare released its 2019 Annual Report of the Boards of Trustees of the Federal Hospital Insurance (HI) and Federal Supplementary Medical Insurance Trust Funds, which analyzed the long-term solvency of Medicare and how depletion of the HI trust fund could affect physician reimbursement over time.

What would be a major step toward improving the financial sustainability of the Medicare program in particular?

Reducing or eliminating avoidable, unnecessary, and ineffective care, and redeploying those savings to provide better financial protection and lower federal outlays, would be a major step toward improving the financial sustainability of the Medicare program in particular, and the U.S. health system in general.

How does the Affordable Care Act help Medicare?

The Affordable Care Act (ACA) has provided the Medicare program with an array of tools to improve the quality of care that beneficiaries receive and to increase the efficiency with which that care is provided. Notably, the ACA has created the Center for Medicare and Medicaid Innovation, which is developing and testing promising new models to improve the quality of care provided to Medicare beneficiaries while reducing spending. These new models are part of an effort by the U.S. Department of Health and Human Services to increase the proportion of traditional Medicare payments tied to quality or value to 85 percent by 2016 and 90 percent by 2018. This issue brief, one in a series on Medicare’s past, present, and future, explores the evolution of Medicare payment policy, the potential of value-based payment to improve care for beneficiaries and achieve savings, and strategies for accelerating its adoption.

What is Medicare Shared Savings Program?

The ACA created the Medicare Shared Savings Program (MSSP) for accountable care organizations ( ACOs), which are groups of providers who accept joint responsibility for the quality and cost of the Medicare patients they treat and can share in the savings they generate as compared with a cost target. 21 The ACA also created the Center for Medicare and Medicaid Innovation (CMMI) to develop and test value-based alternative payment methods. 22,23 Many of those initiatives represent more far-reaching reforms, and put providers at financial risk for a portion or all of the cost of providing Medicare services. Among the most prominent activities being conducted by the CMMI are several aimed at transforming primary care, and several of its models involve a bundled payment for specified sets of hospital and/or postacute care related to specific procedures or conditions. 24

What is Medicare payment policy?

Medicare payment policy has evolved from the cost- and charge-reimbursement approach that was the predominant model when the program was enacted to the establishment of prospective payment systems in the 1980s and 1990s and, more recently, to movement toward value-based payment. 1 The enactment of the Affordable Care Act of 2010 (ACA) and the recent announcement of value-based payment goals for Medicare, along with the enactment of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), have accelerated that movement and provided Medicare with the means to accomplish the goals of better health care, smarter spending, and a healthier population. 2,3 The first two papers in this series focused on Medicare’s accomplishments over its first 50 years, the impact of the ACA on the program, and the challenges that remain; this paper focuses on the evolution of Medicare payment policy and the potential of payment reform to help address those challenges. 4,5

What is the HHS Secretary's authority?

One powerful tool that the HHS secretary possesses is the authority , granted by the ACA, to adopt innovations found to save money and improve quality for use throughout the Medicare program. In addition to continuing to test how well different incentives improve value, HHS is focused on improving the way care is delivered through learning networks such as the recently announced Health Care Payment Learning and Action Network. 40 It also aims to increase the availability of information to guide decision-making, by increasing the use of health information technology, enhancing transparency, and generating information through the Patient-Centered Outcomes Research Institute that can guide care decisions.

What is Medicare bonus?

Medicare provides bonuses to hospitals and other providers that achieve top-level scores on patient outcomes and care experiences. As of 2015, 1.5 percent of base payments for more than 3,500 hospitals is withheld and used to reward top-performing hospitals for the quality of their care and their patients’ experiences of care; this amount increases to 2.0 percent by 2017. 13 A similar program was initiated in 2015 for physicians in larger practices, and will expand to include all physicians by 2018. 14

How much did Medicare spend in 1985?

Between 1975 and 1985, annual Medicare spending per beneficiary rose from $472 to $1,579 —a growth rate of 12.8 percent per year, or 5.3 percent when adjusted for economywide inflation. 6.

Why is the Medicare population growing?

They’ve done this in several ways. At the same time, the Medicare population is growing because of the retirement of baby boomers now and over the next couple of decades. The number of doctors not accepting Medicare has more than doubled since 2009.

Is Medicare a low income program?

Medicare now faces the same tell-tale signs of trouble as Medicaid, the low-income health program. One-third of primary care doctors won’t take new patients on Medicaid. While the number of Medicare decliners remains relatively small, the trend is growing.

Is Medicare losing doctors?

The federal health program that serves seniors and individuals with disabilities is losing doctors who’ll see its patients. The Centers for Medicare and Medicaid Services says the number of doctors who’ll take Medicare patients is falling.

What happens if you don't sign up for Medicare?

That means if you don't sign up for Medicare, you may have gaps in coverage and be subject to a lifetime late-enrollment penalty of 10% of the current Part B premium for every year you should have been enrolled in Part B but were not.

How much will Medicare premiums be in 2021?

Making Financial Moves That Boost Your Medicare Premiums. Most people pay $148.50 per month for Medicare Part B premiums in 2021. But if you're single and your adjusted gross income is more than $88,000 (or more than $176,000 for joint filers), you'll have to pay from $207.90 to $504.90 per month in 2021.

How long do you have to sign up for Medicare at 65?

Instead, you may choose to keep coverage through your employer so you don't have to pay the Part B premiums. But you need to sign up within eight months after you leave your job or you may have to wait until the next enrollment period (January through March, for coverage to begin on July 1). That means you could go for several months without coverage. You may also get hit with the 10% lifetime late-enrollment penalty.

How long does it take to get a Medicare supplement plan?

If you buy a Medicare supplement plan within six months of enrolling in Medicare Part B, you can get any plan in your area even if you have a preexisting medical condition. But if you try to switch plans after that, insurers in most states can reject you or charge more because of your health.

What happens if you don't fill in the gaps?

If you don't make the right choices to fill in the gaps, you could end up with high premiums and big out-of-pocket costs. Worse, if you miss key deadlines when signing up for Medicare, you could have a gap in coverage, miss out on valuable tax breaks, or get stuck with a penalty for the rest of your life.

When is Medicare Part D open enrollment?

Open enrollment for Medicare Part D and Medicare Advantage plans runs from October 15 to December 7 every year, and it's a good time to review all of your options. The cost and coverage can vary a lot from year to year —some plans boost premiums more than others, increase your share of the cost of your drugs, add new hurdles before covering your medications, or require you to go to certain pharmacies to get the best rates. And if you've been prescribed new medications or your drugs have gone generic over the past year, a different plan may now be a better deal for you.

How old do you have to be to get Medicare?

But if you aren't receiving Social Security benefits, you'll need to take action to sign up for Medicare. If you're at least 64 years and 9 months old, you can sign up online. You have a seven-month window to sign up—from three months before your 65th birthday month to three months afterward (you can enroll in Social Security later).

What is the alternative to Medicare?

The aforementioned alternative to Medicare, known as Medicare Advantage (MA), has been an increasingly popular option for eligible enrollees. Between 2005 and 2015, the number of eligible Medicare enrollees who chose an MA plan instead of traditional Medicare rose from 13% to 30%.

Did Avalere Health drop Part D?

Normally, this data would take a long time to pore over, but Avalere Health did the grunt work, thankfully. When all is said and done, Avalere's experts found that Part D (prescription drug plan) premiums are set to drop slightly in 2018 as a result of higher-than-predicted rebates.

Is there a maximum out of pocket for Medicare?

Traditional Medicare doesn't offer these coverage options, and there is no maximum annual out-of-pocket expense. In 2018, MA providers will offer plenty of $0 monthly premium plans to act as a lure to attract seniors, but the number of plans with out-of-pocket expenses capped at $4,000 or less will be significantly lower, according to Avalere.

Is Part D insurance falling?

However, just because Part D premiums are falling doesn't mean you should blindly remain enrolled in the same Part D plan as you had in 2017. Premiums and coverage commonly change from year to year on most plans, meaning what offered the best value in 2017 may not be the best value for you in 2018. You'll want to closely examine ...

Will Part B premiums increase in 2018?

Lastly, it's worth pointing out what was brushed over above: Part B premiums aren't expected to increase in 2018. While that's great news for newly eligible enrollees, as well as those folks who haven't enrolled for Social Security as of yet, it's not necessarily great news for those protected by the hold harmless clause.

What is the new rule for Medicare?

That legislation standardized Medicare payments for clinic visits to physicians' offices and new hospital outpatient facilities , but allowed most hospital-affiliated departments that existed at that time to continue receiving ...

How much will Medicare cut in 2020?

By 2020, the payment rates will be cut by 60% compared with what they were last summer. The Centers for Medicare & Medicaid Services estimates that the change will save the federal government $380 million this year and patients an average of $7 every time they visit a hospital-owned clinic.

Why is Olympic Medical Center a lucrative business?

It was a lucrative business strategy because such clinics could charge higher rates, on the premise that they were part of a hospital. Medicare's recent rule change puts a damper on all that. Eric Lewis' plans of expanding his community hospital's reach have been derailed. As CEO of Olympic Medical Center, he oversees efforts to provide care ...

What is site neutral payment?

Part of a strategy called "site neutral" payment, the new policy has its roots in the Obama administration and was part of the Bipartisan Budget Act of 2015. "You don't care about where [your treatment is] happening.

Can patients pay for ER convenience?

Patients Can Pay A High Price For ER Convenience. But those plans were put aside, Lewis says, because of a change in federal reimbursements this year. Medicare has opted to pay hospitals that have outpatient facilities "off campus" a lower rate — equivalent to what it pays independent doctors for clinic visits.

Why is Medicare for All important?

The reason: "Medicare for All" bills mandate major payment reductions for America's health care workforce. Vermont Sen. Bernie Sanders' bill, for example, would use today's Medicare payment system for reimbursing doctors, hospitals and other medical professionals. Medicare rates are fixed by law and regulation, ...

How many doctors will be in the US in 2030?

By 2030, Americans already face a serious and potentially dangerous physician shortage, ranging between 15,800 and 49,300 primary-care doctors, and between 33,800 and 72,700 non-primary care doctors. Accelerated retirements, job-based burnout and growing demoralization fuel that shortfall.

What is the Sanders bill?

Sanders's bill, however, would expand Medicare's payment rates to the coverage of more than 300 million U.S. residents. Projecting a dramatic 40 percent reduction in provider reimbursement relative to private insurance, Charles Blahous, a former Medicare trustee, observes, "The cuts in the Sanders M4A bill would sharply reduce provider ...

Is Medicare for All good?

It would accelerate the shrinkage of the medical workforce. "Medicare for All" may sound good to some American s – until they take a closer look at how it would actually work. Take something pretty basic: how it would affect the number of medical professionals we have in this country. "Medicare for All" would drive out many doctors and nurses – ...

Is private health insurance outlawed?

Doctors and hospitals routinely depend on private health insurance to close the gap. The Senate and House "Medicare for All" bills, however, would outlaw private health insurance, and thus eliminate the freedom of medical professionals to negotiate payments outside of the government monopoly. Under current law, we already have some idea ...

Is Medicare a fixed rate?

Medicare rates are fixed by law and regulation, not some private market-style " negotiation.". Those rates are set significantly below private sector rates, and often do not cover the true costs of providing medical services.

The Conversion Factor and Cost Containment

See more on bulletin.facs.org

Other Factors Affecting Surgeon Compensation

Medicare Solvency and Effects on Future Physician Reimbursement

MedPAC Report to Congress

ACS Advocacy Efforts

Acknowledgment

Background

Evolution of Medicare Payment Policy

Moving The Focus of Payment Policy from Volume to Value

• Medicare has made significant improvements in the original payment methods modeled on the private insurance payment practices of the 1960s, and recent actions by Congress and the Department of Health and Human Services (HHS) have focused on accelerating that change. The ACA includes an array of provisions that are laying the foundation for fundamen...

See more on commonwealthfund.org

Strategies For Expanding Value-Based Payment