Physician Fee Schedule Rule

 The Centers for Medicare and Medicaid Services (CMS) released a 1700-page proposed rule for the 2020 Medicare physician fee schedule (PFS). The rule covers diverse topics, including geographic payment adjustments and professional liability insurance relative values as well as new payments for managing patients with opioid use disorder. This memo focuses on two key issues that have been major priorities for the physician community in our advocacy with CMS over the past year: revisions to the office visit codes and payment rates, and modifications to the Merit-based Incentive Payment System (MIPS) to make the program less fragmented and more clinically relevant. A more comprehensive summary of the rule will be developed in coming days.

Office Visits – Evaluation and Management

As the CMS Administrator told the AMA House of Delegates in June, the CMS policy in last year’s rule was never intended to be the end of the discussion, but a beginning and a demonstration of the Administration’s sincere commitment to reducing burden for physicians. The AMA and CMS worked in partnership to significantly modify the office visit policy included in the proposed rule. While retaining the important modifications to reduce documentation burden, CMS will implement coding and payment modifications in 2021 that are based on the resources required to perform various levels of office visits. This will ensure that physicians treating the sickest patients are not unfairly penalized, while providing simpler solutions to coding and documentation.

Last July, CMS announced a plan to collapse payment for office visits. The AMA coordinated a response from 170 national medical specialty societies and state medical associations urging a different solution. The CPT Editorial Panel and AMA/Specialty Society RVS Update Committee (RUC) convened a Workgroup, led by Peter Hollmann, MD, and Barbara Levy, MD, to propose revisions to CPT guidelines and code descriptions. The CPT Panel adopted these changes in February 2019 to document office visits on either medical decision making or time spent on the date of the encounter. Fifty national specialty societies and other health professional organizations surveyed their members to determine the physician work and direct practice costs required in the provision of the newly described office visits. The surveys demonstrated that the physician work for office visits should be increased and the RUC submitted recommendations to CMS to do so in May 2019.

We are very pleased that CMS has accepted the CPT framework and RUC recommendations. Two aspects of the CMS proposal depart from these recommendations, however, and exacerbate the negative payment impacts from this policy change on physicians in certain specialties.

Key Elements of Office Visit Proposed Rule:

  • Effective January 1, 2021, CMS will adopt the CPT guidelines to report office visits based on either medical decision making or physician time.
  • CMS adopted the RUC work recommendations for the office visit codes. The work value increases represent $3 billion in redistributed spending, resulting in a 3% reduction in the conversion factor.
  • CMS adopted the RUC physician time recommendations. Coupled with the work value increases and some modifications in direct practice costs, these changes lead to an additional $2 billion in redistributed spending, resulting in an additional 2% across-the-board reduction.
  • Two departures from the CPT and RUC recommendations that we will need to work with the Federation to address in comments are:
    • As it did last year, CMS would implement an add-on payment for office visits for primary care and patients with serious or complex conditions. This proposal redistributes an additional $2 billion, resulting in an additional 2% reduction to the Medicare conversion factor.
    • Although the surgical specialties participated in the RUC survey and their data and vignettes were incorporated into the RUC recommendations, CMS proposes not to apply the office visit increases to the global surgery packages.


The attached Table 111 illustrates the specialty payment impacts if CMS finalizes the proposal without modification. Redistributions will be significant, with family medicine increasing by 12% and many specialties that do not perform office visits decreasing by 7% or more. Also attached is Table 115, which reflects impacts if CMS does not implement the new add-on code, showing a 7% increase to family medicine and cuts of -5% to specialties that do not perform office visits. Both impact tables should be viewed with caution as we believe they contain some errors.

The January 2021 office visit guidelines and descriptions; an initial AMA Ed Hub tutorial; detailed RUC recommendations, data, and a vote report are all posted on the AMA website and may be obtained via

MIPS – Merit-based Incentive Payment System

The AMA is encouraged by results showing 95% of eligible clinicians successfully participated in MIPS in 2017, increasing to 98% in 2018 based on initial results. We continue to hear the current program is too costly; however, and requires reporting for reporting’s sake, diverting time from patient care. We have worked with the physician community and CMS staff extensively to try to come up with solutions. For the past year, we have discussed a proposed solution that would make MIPS more clinically relevant and less burdensome by tailoring participation around episodes of care, conditions, or public health priorities.

In the 2020 proposed rule, CMS embraced the AMA’s proposed concept for streamlining MIPS. The agency outlined a high-level framework and seeks feedback on an episode-based approach to MIPS, which it is calling the MIPS Value Pathways (MVP). The attached MVP diagram is included in the rule.

In the AMA’s view, an MVP-type approach could be a turning point for the program because an option that ties MIPS to episodes of care has the potential to be more clinically relevant, less burdensome, and a stepping stone to alternative payment models. We do have concerns with several specific aspects of MVP that CMS has proposed, such as a return to the use of controversial population health administrative claims measures that the AMA successfully fought to eliminate from the initial MIPS program. The AMA will work closely with the state medical and national specialty societies to address these concerns and provide detailed recommendations to ensure MVP is a practical solution to the problems with the current MIPS program. The MVP framework outlined in the proposed rule is a first step. CMS does not plan initial implementation of an MVP approach until 2021.

The AMA press release on the rule is below.

AMA: Relief from Administrative Burdens is a Key Theme in the Proposed Medicare Fee Schedule Rule

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