CMS releases 2018 Physician Fee Schedule

Perhaps the most controversial change in the Physician Fee Schedule is CMS' decision to cut 20% from payments of certain services to off-campus provider-based hospital departments.

Physicians will receive a small increase in Medicare payments under the 2018 Physician Fee Schedule.

The Centers for Medicare & Medicaid Services issued a final rule (PDF) on Thursday for the 2018 Physician Fee Schedule, which increases payments by 0.41%.

The new rate, CMS said in a fact sheet, reflects the additional 0.50% update established under the Medicare Access and CHIP Reauthorization Act of 2015, reduced by 0.09%, due to the misvalued code target recapture amount, required under the Achieving a Better Life Experience Act of 2014. The final conversion factor is $35.99, an increase from $35.89 in 2017.

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In addition, CMS said in an announcement that beginning in 2018 the agency will update payment for biosimilars, lower-cost alternatives to certain types of drugs known as “biologicals.” This change promotes competition to ensure that millions of patients will have access to new lower cost therapies, the agency said.

Furthermore, the agency said it would transform access to Medicare telehealth services by paying for more services and making it easier for providers to bill for these services. Improving access to telehealth services reflects CMS’ work to modernize Medicare payments to promote patient-centered innovations.

Perhaps the most controversial change in the Fee Schedule is the agency’s decision to cut 20% from payments for certain services to off-campus provider-based hospital departments. These services are no longer paid under the Outpatient Prospective Payment System, and CMS has changed the payment rates for these services from 50% of the OPPS payment rate to 40%. The agency said it believes that this adjustment will provide a more level playing field for competition between hospitals and physician practices by promoting greater payment alignment.

But Blair Childs, senior vice president of public affairs at Premier, an alliance of approximately 3,900 U.S. hospitals and health systems and approximately 150,000 other providers and organizations, said the alliance was disappointed by the action because it fails to reflect the higher costs that these sites incur relative to free-standing physician offices.

“This decision will reverse momentum toward providing care across the continuum. At this transitional moment where the industry is moving from fee-for-service to value-based payment, this decision undermines the movement to provide care outside the walls of the hospital, potentially leading to increased Medicare spending,” Childs said.