2019 Medicare Payment Reform and the Law of Unintended Consequences

CMS recently released a proposed payment reform for 2019 which would simplify E/M codes and payments for patient office visits. The proposal would blend CPT codes 99202-99205 for new patient office visits into a single payment of $135. Similarly, CPT codes 99212-99215 for established patient office visits would be blended into a single payment of $93. The proposed reforms are intended to decrease providers’ documentation requirements for the history and physical exam in order to save time. Despite this admirable goal, no good deed goes unpunished, and the Law of Unintended Consequences is implicated.

To illustrate why, let me paint a picture of a busy primary care practice – mine!

A few years ago, before the advent of EMR and Pay for Performance, my partners and I (all physicians) cared for patients of all ages. Infants, children, and adults with simple colds or UTIs sometimes provided a little breather between complex disease visits which consumed more of our time and energy.

With Medicare’s increased focus on value-based care in recent years, however, we were incentivized to perform more intense chronic disease management than before, leaving us less time to care for acute problems. To compensate for this, we decided to hire nurse practitioners to improve patient access. Over time, the nurse practitioners absorbed many of the simpler acute-care visits, while we doctors devoted more and more of our time to chronic disease management in the geriatric population.

Although chronic disease management takes more time and effort (typically 25-30 minutes per visit), we did not mind because the 99214 code which typically applies to such visits allows for a higher reimbursement. Contrast that with simpler visit codes 99212 and 99213 which have lower reimbursement. Under the existing system, 99214 rewards a provider for the extra time spent managing chronic diseases as opposed to cranking through a bunch of 99212 or 99213 visits for colds, UTIs, allergies, and so forth.

Perhaps now you see where I am going with this as we fast forward to 2019 when the new blended codes would be implemented:

Let’s say I have 10 chronically-ill Medicare patients on my morning schedule for their six-month follow-up visits (you know the ones – the diabetic, hypertensive, hyperlipidemic, still-smoking, COPD-on-oxygen patients). Now, let’s say one of my partners has a schedule with 10 relatively healthy yoga-posing, yogurt-eating Medicare patients, each with a relatively simple acute-care problem (maybe a bee sting, head cold, bladder infection, or stubbed toe). With the blended rate, because we both get paid the same for each Medicare visit, my partner with the “easier” schedule will actually get the same reimbursement as me (technically, though, he comes out better, since seeing 10 easy patients in a couple of hours is better than spending all morning seeing 10 difficult ones).

Hopefully, the point is clear: if CMS implements the blended rates, chronic disease management be no longer be worth the blood, sweat, and tears. While I am sure the authors of the reforms did not intend that their remedy would produce this side effect, blended rates incentivize practices to seek healthier Medicare patients to care for while punishing clinics that take on sicker ones. Even worse, some offices might decide to focus solely on urgent care and stop offering chronic disease management completely.

Don’t get me wrong: I applaud the efforts of CMS to make documentation less onerous. I just worry that blended payments might reward urgent care clinics that generate lots of charges from acute care visits while putting a financial squeeze on offices that provide chronic disease management in the Medicare population.

Let’s hope my worries are unfounded.