J. Tod Fetherling

CEO / Data Geek

CMS-1693-F: The Final Rule's Impact on Providers and Patients

When the proposed rule came out in July 2018 by CMS, it really shocked me. In total, we project there will be 1.2 billion physician office visits (practice setting, clinic, and urgent care centers) in 2018. Being a former practice manager, I have been doing coding audits since the ’90s. The most used codes for physician office visits and urgent care centers are the New or Established Patient Visit. The CPT Codes for this billing event are 99201-99205 (New Patients) and 99211-99215 (Established Patients).

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The first place to begin a coding audit is with these codes. The most important element of a coding audit is to get a benchmark for each physician specialty and compare physicians based on these benchmarks. Below is a sample Coding Benchmark for Dr. Smith, a Cardiologist in New York State.

In this particular case, Dr. Smith is “under” coding compared to his peers. Almost all of his patients get billed at a 99203 or 99213 level. It is always important to note that a physician’s coding practice needs to follow their documentation. Therefore, if all of your patients get billed a 99203, then you need to provide the documentation to support this code in time and effort. This might be one of the reasons and some of the data CMS reviewed in trying to simplify billing practices by physicians.

At Perception Health, we conducted a quick analysis based on more than 327M Office Visits from our recently published Trailing Twelve Months (12/31/2018) dataset. We made an assumption that commercial insurers will follow Medicare on this new rule. (It’s a pretty big assumption.) We compared the current billing rates for the Total Commercially Insured Patient Visits and the Total Medicare Insured PatientVisits. In the table below, we show the details on the impact of this new Final Rule on the total physician office visit industry. In summary, we expect this rule will increase the total cost to $287,649,357 at a minimum. The maximum could be as high as $5,947,251,933. I think it is safe this new rule will increase costs by approximately $2B. What’s another $2B on top of a four-trillion-dollar marketplace?

The Proposed Rule has since been finalized on 2018-11-23 and published.

Source: CMS

From a historical context, the final rule helps simplify the billing process and increases the administrative overhead for a practice manager. The physician practice must now account for the minutes in treating the patients and keep an eye open for add-on codes as well as extended services codes. This will increase the need for modifiers within the claims submission. Fortunately for most clinics, this is a few years away before implementation. However, like all regulation, it is a good time to verify your practice management system/EMR has the capability to capture this billing practice or is planning to implement the rules within the EMR in advance of the final rule go live.

Ultimately, I believe the new final rule slated to go into effect in 2021 will benefit the Internal Medicine specialist the most. Family Physicians, Nurse Practitioners, and Physician Assistants will likely see a net decrease in practice revenue unless they have implemented modern EMR Practice Management Systems that will automate billing capture by the providing the modifiers based on Add-On and Extended Services for a visit to obtain extra reimbursement for their patient visits. Ultimately, the consumer will end up paying a higher rate for routine physician office visits.