Medicare releases 2018 physician fee schedule

The 2018 Medicare physician fee schedule rates were released late last week. This year’s annual update is 0.41% which applies across the board. However, as expected, reimbursement for skin prick testing (CPT Code 95004) will drop by about 21% in 2018 to a national rate of $5.40 before geographic adjustment. 

The reason for this decrease in reimbursement is that the service was revalued by the Centers for Medicare and Medicaid Services (CMS). The Medicare statute requires that Relative Value Units be established for three categories of resources: work, practice expense (PE), and malpractice expense.  This revaluation began in 2015 when the service components were targeted by CMS due to a steep increase in utilization that we believe occurred as other specialties started to perform more skin testing. We do not believe utilization by allergists was responsible for this rise in utilization.

Nevertheless, CMS required that the service be reviewed by the AMA’s Relative Value Update Committee. This took place in early October 2016. The College, working jointly with the AAAAI and the American Academy of Otolaryngic Allergy, was closely involved in the review process. Although we were successful in getting costs substantially increased for certain components of the service such as the cost of the antigen, the overall reimbursement impact is negative. This is due to the correction of a longstanding inaccuracy in one of the PE costs used in the reimbursement formula that was discovered during the review. The overall impact is a cut of 36.8% phased in over two years.

At the same time, 2018 will also bring some modest increases for other services. Intradermal testing will go up by 4.5%; exhaled nitric oxide testing by 5.5%; and venom immunotherapy by between 2.7% and 4.6%. There are no changes to allergy injections and allergy immunotherapy (CPT Code 95165) except that Rapid Desensitization (95180) increases slightly by 2.39%. A complete table of allergy codes is now available.  

CMS estimates the total impact of all 2018 changes will be a -3.0% in Medicare revenues for the allergy/immunology specialty.

Advocacy Issue: 
Billing, Coding & Payments