2018 Medicare Physician Fee Schedule Overview

CMS Releases CY 2018 Medicare Physician Fee Schedule

On November 2, 2017, the Centers for Medicare and Medicaid Services (CMS) released the CY 2018 Physician Fee Schedule (PFS) Final Rule, which will be published in the Federal Register on November 15, 2017. 

The Conversion Factor

The CY 2018 conversion factor (CF) is 35.9996, which is an increase to the 2017 PFS conversion factor of 35.8887. The CF reflects the 0.50 percent increase established under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, reduced by -0.09 percent, due to the misvalued code target recapture amount required under the Achieving a Better Life Experience (ABLE) Act of 2014, and reduced by 0.10 percent to reflect the budget neutrality adjustment. If this conversion factor holds throughout the year, CMS projects the impact for ophthalmology would be 0 percent.

Ophthalmic Biometry and Ophthalmic Ultrasound Codes Cut, but Deep Cuts Avoided

To meet budget neutrality, CMS used a high expenditure screen to identify potentially misvalued codes. This screen identified the Ophthalmic Biometry and Ophthalmic Ultrasound codes for re-evaluation. ASRS supported the RUC-recommended work RVUs for Ophthalmic Biometry codes as opposed to the deeper cuts suggested by CMS and the recommended RUC values were accepted.

CPT Code

CPT Descriptor

Global Period

2017 Payment Non-Facility

2018 Payment

Percent Change


Ophthalmic ultrasound, diagnostic; B-scan and quantitative A-scan performed during the same patient encounter






Ophthalmic ultrasound, diagnostic; quantitative A-scan only






Ophthalmic ultrasound, diagnostic; B-scan (with or without superimposed non-quantitative A-scan)






Ophthalmic biometry by ultrasound echography, A-scan;






Ophthalmic biometry by ultrasound echography, A-scan; with intraocular lens power calculation






Ophthalmic biometry by partial coherence interferometry with intraocular lens power calculation





*These values are estimates and are not adjusted for the Geographic Price Cost Index

 CMS Response to Comment Solicitation on Telehealth Services

CMS reiterated that Medicare telehealth is restricted by statute and while it has the authority to add to the list of services through its annual process, it cannot change limitations related to geography, patient setting or type of practitioner furnishing the service. CMS stated that it would continue to work within its authority to expand telehealth service codes. In response to ASRS comments regarding remote patient monitoring, CMS agreed that remote monitoring services can be a significant part of ongoing medical care and that it should recognize these services for separate payment as soon as practicable. Until then, CMS changed the status of CPT code 99091 from “bundled” to active, so that information interpreted by a physician or other qualified health care professional, that requires a minimum of 30 minutes of time, will now be paid. For CY 2018, CMS will adopt the RUC-recommended work RVUs of 1.10 for CPT code 99091.

 Relief Under Physician Quality Reporting System (PQRS), Value Based Payment Modifier (VM) and Meaningful Use – Stage 3

CY 2016 was the last reporting period for PQRS, which was replaced by the Merit-based Incentive Payment System (MIPS) under the Quality Payment Program (QPP). To better align PQRS requirements with current MIPS reporting requirements, CMS modified its previously finalized reporting criteria to avoid the 2018 PQRS payment adjustment. Under PQRS, eligible professionals (EPs) and group practices who did not satisfactorily report data on quality measures in 2016 are subject to a downward payment adjustment of 2.0 percent in 2018 to their PFS services. 

Using data already submitted for the CY 2016 reporting period, CMS finalized its proposal to apply criteria to better align incentives and transition to MIPS, to determine whether a physician has met "satisfactory reporting." Specifically:

  • The number of required measures will be reduced from 9 to 6 with no domain requirement;
  • Physicians reporting via claims or qualified registry would no longer be required to report a cross-cutting measure; and,
  • Physicians reporting via QCDR would no longer be required to report an outcome or "high priority" measure.

Likewise, CMS finalized its proposal to change its previously-finalized policies for the 2018 Value Modifier (VM). Groups of any size and composition would be subject to the same upward adjustments under quality tiering and would be held harmless from any downward adjustments based on performance. CMS will:

  • Reduce the automatic downward payment adjustment for not meeting minimum quality reporting requirements from -4.0 percent to -2.0 percent for groups of 10 or more clinicians; and from -2.0 percent to -1.0 percent for solo practitioners and groups of 2-9;
  • Hold harmless all groups and solo practitioners who met minimum quality reporting requirements from downward payment adjustments for performance under quality-tiering; and,
  • Align the maximum upward adjustment amount to 2 times the adjustment factor for all.

For Stage 3 and Modifications to Meaningful Use, CMS finalized the options for CQM submissions in the Medicare EHR Incentive program in 2016 to align PQRS reporting with the Merit-based Incentive Payment System. For the CY 2016 Reporting Period, CMS will revise the reporting criteria for CQMs from 9 to 6 measures with no domain requirement for those reporting through the PQRS Portal.

 MACRA Patient Relationship Categories and Codes

Section 101(f) of MACRA amended Section 1848 of the Social Security Act (SSA) to create a new subsection entitled, “Collaborating with the Physician, Practitioner, and Other Stakeholder Communities to Improve Resource Use Measurement.” This new SSA subsection required that CMS establish and implement patient condition groups and codes, and patient relationship categories and codes. To that end, CMS finalized five voluntary patient modifiers to attribute patients to clinicians and capture the role that clinician played in that patient’s cost of care. While not a condition of payment, Medicare claims submitted for items and services furnished on or after January 1, 2018, should include the applicable HCPCS modifiers in the table below, as well as the NPI of the ordering physician (if different from the billing physician). CMS intends to educate stakeholders using a wide variety of clinical examples for training purposes. CMS did not indicate when the voluntary period would end, rather it stated that it understands that there will be a learning curve and that these modifiers would be voluntary until clinicians gain familiarity. More details of these categories can be found on the CMS Quality Payment Program website: http://www.qpp.cms.gov.

 TABLE: Patient Relationship HCPCS Modifiers and Categories


HCPCS Modifier

Patient Relationship Categories



Continuous/broad services



Continuous/focused services



Episodic/broad services



Episodic/focused services



Only as ordered by another clinician

 Response to Comments Solicited Regarding Revising Evaluation and Management (E/M) Guidelines

In the CY 2018 MPFS proposed rule, CMS solicited comments on ways to further reduce administrative burden for E/M guidelines and care management services. ASRS recommended that CMS seek input from the entire medical community before moving forward to revising E/M documentation guidelines and CMS agreed. CMS is currently considering the best approaches for collaboration and will take all of the comments it received into consideration for future rulemaking.

Durable Medical Equipment (DME) Infusion Drugs

Medicare pays 106 percent of the average sales price (ASP) for most drugs covered under Part B. However, the payment methodology for infusion drugs administered in conjunction with durable medical equipment (DME) was 95 percent of the drugs’ average wholesale price (AWP). The 21st Century Cures Act (Cures Act) (Pub. L. 114–255, enacted on December 13, 2016) revised the payment methodology for DME infusion drugs so that payment amounts for infusion drugs administered in conjunction with DME instead use the ASP-pricing methodology of ASP plus 6 percent. CMS finalized its proposed policy to incorporate the ASP-based infusion drug payment amounts. While ASRS did not provide specific comments on this proposal, the society will continue to monitor this issue to determine whether this policy will result in underpayment for retina drugs approved to be distributed through DMEs.

 Medicare Part B Biosimilar Biological Products will be Separately Coded and Paid

Medicare will now separately code and pay each biological product recognizing that the products are not identical and interchangeable. This replaces the current policy that requires that all biosimilars related to a single reference product be assigned a shared HCPCS code and reimbursement is based on the average sales price (ASP) of all of the biosimilars with that HCPCS code plus the prevailing percentage adjustment. This was a positive change that had been requested in the letter to CMS by ASRS.

 The ASRS will continue to review the rule and provide updates on the implementation of the Final Rule as appropriate. 

Link to the Final Rule

 (Updated November 7, 2017)

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