The Centers for Medicare & Medicaid Services today proposed to update physician fee schedule rates by 0.25% in calendar year 2019, as required under the Medicare Access and CHIP Reauthorization Act of 2015. After this update and the budget-neutrality adjustment required by law, the proposed 2019 PFS conversion factor is $36.05, an increase from $35.99. The rule proposes no changes to site-neutral payment policies under Section 603 of the Bipartisan Budget Act of 2015. Specifically, CMS proposes to continue to allow nonexcepted provider-based departments to bill for nonexcepted services on the institutional claim and would maintain payment for nonexcepted services at 40% of the outpatient prospective payment system amount for CY 2019. Section 603 requires that, with the exception of dedicated emergency department services, services furnished in off-campus PBDs that began billing under the OPPS on or after Nov. 2, 2015 no longer be paid under the OPPS, but under another applicable Part B payment system. Among other changes, the rule also proposes to reduce payment for new Part B drugs from the rate of Wholesale Acquisition Cost plus 6% to WAC plus 3%. This rate would only apply while average sales price data are unavailable. In addition, the rule proposes updates to the Quality Payment Program to align the Promoting Interoperability performance category requirements with the Promoting Interoperability Program proposed for hospitals in the inpatient prospective payment system rule, and to increase the weight of the Merit-based Incentive Payment System cost category to 15% while lowering the weight of the quality category to 45%. CMS also proposes to expand the ability to serve patients through telehealth and virtual connection and to collapse the payment rates for levels two through five of evaluation and management codes, among other changes to coding and documentation requirements. “Today’s proposed policies from CMS will provide opportunities and challenges for hospitals and health systems and the patients and communities they are proud to serve each day,” said AHA Executive Vice President Tom Nickels. Specifically, AHA applauded CMS for reducing the regulatory burden physicians face and expanding the ability of physicians to serve patients through telehealth, but expressed continued disappointment with CMS’s policies regarding the relocation of existing off-campus outpatient departments and site-neutral payment. AHA members will receive a Special Bulletin with further details tomorrow. Comments on the proposed rule are due Sept. 10.