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Takeaway: Final rule not as favorable to TDOC; implements telehealth provisions of Opioid bill; win for labs and E/M codes get reprieve

TDOC, LH, DGX | MEDICARE RULE-A-RAMA ROUNDING THE TURN | PHYSICIANS FEE SCHEDULE FINALIZED - IRF Update

Last night, CMS released the CY2019 Physicians’ Fee Schedule. CMS finalized several provisions favorable to the cause of telehealth, if not that of TDOC.

Telemedicine. CMS has decided that they can reinterpret current law to permit reimbursement of new categories of reimbursement in the Medicare program. Those are:

  • Brief Communication Technology-based Service e.g. Virtual Check-in (HCPCS: G2012). Effective Jan. 1, 2019, CMS will permit physicians to submit for reimbursement of virtual visits that are designed to assess whether an office visit is necessary. If an office visits results, then payment will be bundled. If an office visit does not result the virtual visit will be separately payable. The service would only be available to established patients. An established patient will be as defined as: a patient is one who has received professional services from the physician or qualified health care professional or another physician or qualified health care professional of the exact same specialty and subspecialty who belongs to the same group practice, within the past 3 years.
  • Remote Evaluation of Pre-recorded Patient Information (HCPCS: G2010). Effective Jan. 1, 2019, CMS would permit reimbursement for remote professional evaluation of patient-transmitted store and forward video or image technology. CMS has originally proposed to permit reimbursement for services provided to established and new patients. Bowing to pressure from the AMA, CMS will require the patient be established. 

These new services will benefit white label solutions like American Well and SnapMD. As proposed, the second of the new services would have been a good fit for TDOC's DTC business. However, the requirement that a patient be established is not as much of a positive. TDOC and other telehealth providers will need to find a way to establish those last minute patients with dermatological conditions.

The rule unbundles Inter-professional Internet Consultation (CPT 994X6, 994X0), 99446, 99447, 99448 and 99449) from a patient encounter to allow them to be separately billable.

CMS implemented provisions of the Bi-Partisan Budget Act of 2018 that expands telehealth services to stroke patients and ESRD beneficiaries using home dialysis.

Finally, in what has to be the speedest response to legislation in the history of the agency, CMS also finalized rules for the delivery of telehealth substance abuse and mental health services which were mandated by the recently enacted Opiod legislation. The final rules:

  • Add the home of an individual as a permissible originating site for telehealth services furnished on or after July 1, 2019 for patients with SUD diagnosis or co-occurring mental health disorder. Geographical requirements for Medicare telehealth services do not apply.
  • Add a new benefit category for opioid use disorder treatment services furnished by Opioid Treatment Programs (OTPs) beginning on or after Jan 1, 2020. The final rule requires that opiod use disorder treatment services include FDA-approved opioid agonist and antagonist treatment medications, SUD counseling, individual and group therapy, toxicology testing and other services determined appropriate.

By hustling out these rules, CMS provides the necessary signals to providers to ramp up their infrastructure to accomodate the new law.

Drugs. CMS finalized its proposal, effective Jan. 1, 2019, to pay for new drugs at WAC plus 3 percent - a 3 percent reduction from current regulation. The change would only apply to the first three months on the market until ASP data is available. Consistent with the president's drug price initiatives, the lower reimbursement is meant to reduce cost-sharing for beneficiaries using new and frequently high priced drugs.

Laboratories. In response to industry concerns, CMS revised the definition of “applicable laboratory.” Currently, any lab that receives more than 50 percent of revenues from Medicare must submit commercial claims data to CMS for calculating PAMA rates. Medicare was defined as Medicare FFS and Medicare Advantage. CMS finalized its proposal that Medicare Advantage payments be excluded from the 50 percent threshold criteria. The industry believes that the redefinition of "applicable lab" will increase the number of those reporting and increase PAMA reimbursement, especially for the routine tests that are LH and DGX's bread and butter. The change is effective with the reporting period that begins Jan. 1, 2019.

Hospital Outpatient Department. CMS is proposing to retain the 40 percent payment reduction for new off-campus hospital outpatient departments. The industry was hoping to roll this reduction back but were unsuccessful. In fact, CMS reiterated its view that Congress’s intent is a site neutral payment system and their objective, as data becomes available, is to execute.

Physicians Services. CMS backed down from a proposal to reduce the five Evaluation and Management codes - the most frequently billed designations in all of health care - to one. The industry strongly objected to the proposal which would have, in effect, reduced reimbursement for treatment of more complex patients. The final proposal reduces the E/M codes from four to two, leaving level five for complex patients alone.

Call with questions. There are 2,378 pages in this rule and we just gave you the interesting stuff.

Emily Evans

Managing Director
Health Policy


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