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CMS Proposed Physician E & M Payment Changes: Potential Implications for Hospice, Palliative Care

Posted on Wednesday, August 15, 2018 6:22 PM

In July, Centers for Medicare & Medicaid Services (CMS) issued a rule proposing changes to payment and documentation requirements for physician evaluation & management (E & M) services provided in the office or outpatient setting.  E & M services that are billed (such as under hospital observation, inpatient or emergency department status; in nursing or assisted living facilities; or at home) will not be impacted at this time, although CMS could consider similar changes for those settings in the future.

E & M services are billed at one of five levels; level 1 is generally reserved for non-practitioner interactions, while levels 2 through 5 relate to practitioner-patient interactions. As the levels increase, it indicates the greater complexity of the case and the more time spent with the patient and paid accordingly.  The greater the level, the greater the documentation needed.  CMS is proposing to reduce the E & M documentation required for levels 2 thru 5 to that of level 2 visit, but they would also lower the payment.

For purposes of illustration, following are tables supplied by CMS to show how the proposed payment modifications for E & M services provided in the office or outpatient setting would impact existing 2018 payments:

Preliminary Comparison of Payment Rates for Office Visits New Patients


CY 2018 Non-facility 
Payment Rate

CY 2018 Non-facility Payment Rate under the proposed Methodology














Preliminary Comparison of Payment Rates for Office Visits Established Patients


Current Non-facility 
Payment Rate

Proposed Non-facility Payment Rate














While it is believed that most of the physician services billed by hospices and physician practice-based palliative care programs are billed using the Physician Fee Schedule and fall under the E & M codes, information received by the National Association for Home Care & Hospice (NAHC) indicates that the financial impact of CMS’ proposed changes on hospices and on palliative care programs that bill under Part B will vary significantly depending on an entity’s practice. 

Source: NAHC Report

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