2012 Medicare Payment Rate Changes for Physician Fee Schedule

On July 1, CMS (Center for Medicare & Medicaid) issued a proposed rule that represents a 29.5% cut to Medicare physician payments unless Congress steps in to correct it.

See the CMS press release at http://go.cms.gov/kssRvx

Dr. Donald Berwick, head of CMS was quoted in the press release saying, “This payment cut would have serious consequences, and we cannot and will not allow it to happen,” said Dr. Donald M. Berwick, CMS administrator, in a statement. “We need a permanent SGR fix to solve this problem once and for all. That’s why the President’s budget and his fiscal framework call for averting these cuts and why we are determined to pass and implement a permanent and sustainable fix.” Physicians groups have clamored for the SGR (Sustainable Growth Rate) formula to be overhauled as part of the deficit reduction process, but that would also come with a $300BB price tag.

Some provisions of the proposed rule include:

  • Physician Quality Reporting System (PQRS) – adding 26 new measures

  • Value-based modifier-CY 2013 as the initial performance year

  • Meaningful use

  • Misvalued code Initiative

  • Payment for certain Part B drugs

  • 2012 e-prescribing incentive

  • Multiple procedure payment reduction (MPPR)

  • Physician payment during 3-day payment window

Comments are due back to CMS before August 30th. The final rule is expected by November 1st.

5 Most Common 5010 Transaction Rejections

After extensive testing of 5010 claims transactions with Medicare, Medicaid, Blue Cross Blue Shield and commercial payers, clearing houses have identified the 5 most common rejections that practices need to fix to insure that there claims will pass the new 5010 edits.

1. Billing Provider Address – Claims are rejecting because the field contains a PO Box or Lock Box address.

2. 9 Digit Zip Code – required for the billing provider. This can be obtained by going to the US postal services website.

3. Provider Accept Assignment Code – claims will be rejected that do not contain a value value for the payers that are live for 5010 transaction (if Live the assignment needs to be “A” for assigned).

4. Priority (Type) of Admission or Visit – payers who are live for 5010 transaction will need a value code for the admission or visit priority. Contact your billing software vendor or your clearing house to insure that you are providing this priority type in the electronic transaction file.

5. Drug Quantity – the CTP segment has been modified to require the drug quantity when a drug is billed. Contact your billing software vendor to insure that the drug quantity is being included in the electronic claims transactions.

Practices must adopt the latest version of the HIPAA electronic transaction standards, Version 5010, by Jan. 1, 2012. These electronic transaction standards include claims, insurance eligibility verification, remittance advice and others.