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.

CMS Releases 2011 Physician Fee Schedule

The Centers for Medicare & Medicaid Services (CMS) just released the 2011 Medicare final physician fee schedule and a related press release and fact sheets. The regulation implements several provisions from the recently enacted Patient Protection and Affordable Care Act as well as the Medicare Improvements for Patients and Providers Act of 2008. The regulation discusses polices that affect payments under the Medicare physician fee schedule for services furnished on or after Jan.1, 2011.

The new physician fee schedule will:

  • Reduce the 2011 Medicare conversion factor by 6.1 percent (on top of the approximate 23 percent cut scheduled to occur Dec. 1 unless Congress intervenes)
  • Implement payment incentives for primary care services furnished by certain primary care providers
  • Implement payment incentives for general surgeons performing major surgery in Health Professional Shortage Areas
  • Reduce payment rates for services using diagnostic MRI and CT imaging equipment by increasing the equipment utilization assumption
  • Increase the established multiple procedure payment reduction (MPPR) for the technical component of certain single-session imaging services to consecutive body areas from 25 to 50 percent, regardless of modality or location on the patient’s body
  • Exercise the agency’s expanded authority to adjust misvalued codes under the physician fee schedule
  • Recalculate RVUs to reflect a rebased Medicare Economic Index
  • Implement geographic practice cost indices adjustments
  • Eliminate out-of-pocket costs for beneficiaries for most preventive services
  • Allow group practices with fewer than 200 eligible professionals to participate in the PQRI group practice reporting option as well as the eRx Incentive Program
  • Implement an MPPR of 25 percent (as opposed to the proposed 50 percent MPPR) for the practice expense component of the second and subsequent outpatient therapy services paid under Part B furnished by a single provider to a beneficiary on a single date of service
  • Implement the new patient disclosure requirement for practices providing MRI, CT and PET scans in their offices in reliance on the in-office ancillary services exception to the Stark law.

The following analyses and reviews will be helpful to determine the impact of the 2011 fee schedule on your practice.

MGMA analysis of the 2011 physician fee schedule impact

2011 physician fee schedule by select procedure code

2011 physician fee schedule by specialty