On November 2, 2017, the Centers for Medicare & Medicaid Services (CMS) issued the final rule for physician services furnished under the Medicare Physician Fee Schedule (PFS) for calendar year (CY) 2018. The final changes update policies, payment rates and quality provisions for professional services effective January 1, 2018. Read the AUA's comment letter on the final rule.

CMS issued the proposed MPFS rule on July 13.

The charts below show the effect of the 2018 Medicare Physician Fee Schedule on some of the most utilized CPT codes by urologists in the facility and non-facility setting.

Facility	Non-Facility

Amended PQRS, EHR and Value Modifier Policies

• The AUA commends CMS' for the decision to retroactively reduce the number of Physician Quality Reporting System (PQRS) quality measures from nine to six for the 2016 performance period to avoid a negative payment adjustment in CY 2018 payment year. In 2016, the last year of the PQRS program, clinicians were required to report nine quality measures across three National Quality Strategy domains or be subject to a 2.0 negative payment adjustment in 2018.
• Similar changes for the clinical quality measure (CQM) reporting requirements under the Medicare Electronic Health Record (EHR) Incentive Program for clinicians who reported electronically through the PQRS portal. CMS changed the PQRS reporting criteria to provider a smoother transition to the Merit-based Incentive Payment System (MIPS) under the Quality Payment Program.
• In addition, previously finalized payment adjustments under the Value-based Payment Modifier (VM) will be reduced by 50 percent in 2018. For example, if you failed to sufficiently report to PQRS in 2016, individual and group practices of 10 or less clinicians will receive a -1.0 percent payment adjustment instead of a -2.0 percent payment adjustment, and group practices of 10 or more clinicians will receive a -2.0 percent payment adjustment instead of -4.0 percent payment adjustment.
• Clinicians who met the minimum PQRS reporting requirements will be held harmless from a downward payment adjustment under the quality-tiering methodology.
• CMS also will not report 2018 VM data in the Physician Compare downloadable database, as previously planned.

Conversion Factor and Payment Update for Urology Services

• The conversion factor for CY 2018 will be $35.9996, a slight increase above the CY 2017 conversion factor of $35.8887. The change reflects a -0.10 percent budget neutrality adjustment, the 0.5 percent update established under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), and an adjustment of -0.09 due to the misvalued code target recapture amount.
• The overall impact from work, practice expense and malpractice RVU changes will be -1 percent for urology services under the PFS for CY 2018.

Final CY 2018 Work RVUs for New, Revised and Potentially Misvalued Codes

• For CY 2018, CMS will adopt the RUC recommended work RVU of 13.16 for CPT code 52601 (Transurethral Electrosurgical Resection of Prostate), as proposed. 
• In October 2016, the CPT Editorial Panel deleted CPT Category III code 0438T and created new CPT code 55874 (Transperineal placement of biodegradable material, peri-prostatic, single or multiple injection(s), including image guidance, when performed). For CY 2018, the work RVU for this code will be 3.03, as proposed. 

Telehealth Services

• For CY 2018, CMS will add seven new codes to the list of telehealth services for low dose computed tomography eligibility, interactive complexity, health risk assessment, care planning for chronic care management and psychotherapy for crisis.

Appropriate Use Criteria

• CMS has further delayed implementation of the Medicare Appropriate Use Criteria (AUC) Program for Advanced Diagnostic Imaging. The program will begin with an educational and operations testing year in 2020, which means clinicians would be required to start using AUC and reporting this information on their claims.
• The agency also plans to implement an 18-month voluntary reporting period beginning mid-2018.
• In the interim, clinicians may earn created for the Improvement Activities performance category under MIPS for using clinical decision support mechanisms.

Payment Policy for Biosimilar

• Effective January 1, 2018, CMS will separately code and pay for biological biosimilar products under Medicare Part B. Newly approved biosimilar biological products with a common reference product will no longer be grouped into the same billing code.

Part B Drug Payment: Infusion Drugs Furnished through an Item of Durable Medical Equipment (DME)

• CMS finalized proposed revisions to conform to statutory provisions of the 21st Century Cures Act that transition payment for infusion drugs or biologicals furnished through a covered item of DME from average wholesale price (AWP) to average sales price (ASP) pricing methodology on January 1, 2017. 

Payment Rates for Off-Campus Provider-Based Hospital Departments 

• For CY 2018, CMS finalized a new policy for services furnished in hospital off-campus provider-based departments (PBDs) that began billing under the Outpatient Prospective Payment System (OPPS) on or after November 2, 2015. CMS currently pays for these services under the PFS based on a percentage of the OPPS payment rate. The new policy will reduce payment rates for PBDs from 50 percent of the OPPS payment rate to 40 percent. 

Payment Reduction for Traditional X-Ray Imaging

• Effective January 1, 2018, CMS will require use of a modifier to implement statutory provisions of the Consolidated Appropriations Act of 2016 to reduce PFS payments for x-rays taken using computed radiography technology in the physician office setting.
• Modifier "FY" (X-ray taken using computed radiography technology/cassette-based imaging) will result in a 7 percent reduction for x-ray services from CY 2018 through CY 2022. In CY 2023, the reduction will increase to 10 percent.
• The modifier must be reported for the technical component, even if the service is billed globally. 

The final rule was published in the Federal Register on November 15, 2017.

More details on the final rule are available in the CMS Fact Sheet. If you have questions about the final rule, please contact paymentpolicy@auanet.org.