Medicare payment policy for office visits – the most commonly billed type of physician services in the United States – is currently under intense debate. Today, Medicare pays physicians for office visits using five levels of codes based on clinical complexity, medical decision-making, and time. The payment is higher for higher-level codes, in accordance with the Medicare Physician Fee Schedule established in 1989.

The Centers for Medicare and Medicaid Services (CMS) recently proposed a revamp of the Medicare payments system for office visits. In a paper published in the New England Journal of Medicine, assistant professor of health care policy Zirui Song, MD, PhD, and John D. Goodson, MD, discuss the goals of this proposal and investigate why it may not work in favor of many physicians and patients.

CMS plans to collapse fees for code levels 2 through 5 into a single uniform payment. Physicians would receive the same payment for a level 2 visit that they would for a more complex level 4 or 5 visit. Song and Goodson are concerned that this could discourage physicians from seeing patients with complex needs, who require more time and effort, and instead promote bringing patients back for shorter and more frequent visits. Because the single payment would be set between today’s level 3 and level 4 fee, this policy could lower revenue for many cognitive specialties whose payments largely come from office visits, especially those who see a larger share of medically complex visits. Conversely, the policy could raise revenue for specialties that currently see more level 2 and 3 visits. While some providers might offset lower revenue from office visits by doing more visits or substituting towards procedural services, others may not have the ability to do so.

CMS’s proposal would also reduce documentation requirements for levels 2 through 5 to what is currently required for a level 2 visit. While level-2 documentation is minimal, it may not actually be easily achieved, especially for patients with medically complex needs. Additional documentation would likely still be needed for higher-complexity visits, as well as to justify payments for many Medicare services, such as medical equipment.

Song and Goodson suggest that CMS need not couple this effort to reduce documentation burden with collapsing prices across levels of work intensity. Instead, other means of reducing documentation while preserving the incentive to see medically complex patients should be considered. For example, separate codes for office visits could be designed for cognitive and procedural specialties to recognize cognitive effort. Additionally, they suggest that the existing visit definitions, which were established in the 1990s, could be revised to better account for how physicians’ time is used.

While Song and Goodson appreciate CMS moving to reduce administrative burden, they believe that “if professional societies, researchers, and policymakers collaborate to develop a more robust understanding, based on contemporary evidence, of what constitutes various levels of work intensity for the cognitively intensive care required by patients, such data would inform efforts to more reasonably define service codes, valuations, and documentation requirements.”