Proposed physician fee changes credit negative for academic med centers, some rural hospitals, Moody's says

Alia Paavola - Print  | 

While the proposed changes to CMS' physician fee schedule for 2019 would be credit positive for community hospitals, the changes would be credit negative for academic medical centers and certain rural hospitals, according to a new report by Moody's Investors Service.

CMS proposed simplifying the billing process by reducing the number of evaluation and management codes to two billing codes from five. Under the changes, CMS would pay one standard rate for office visits that require an evaluation by physician. The other rate would apply to services provided by non-physicians. This change increases payments for less complex patients and reduces payments for complex cases.

Primary care physicians would see a higher rate of reimbursement while specialists would see a lower payment rate.

Since community hospitals employ large number of physicians, including more primary care providers, this change is credit positive for them. Conversely, the changes would be credit negative for academic medical centers, which tend to employ more specialists, and rural hospitals, which often employ specialist in hard-to-recruit specialties.

In the long term, according to Moody's, the proposed changes could force specialists to seek employment at hospitals instead of practicing independently.

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