CMS Releases Physician Fee Schedule, Includes 27.4% Cut to Physician Payments

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CMS has released its final rule on the Medicare physician fee schedule for the 2012 calendar year, and among the biggest changes is a 27.4 percent Medicare payment cut to providers paid under the MPFS, less than the 29.5 percent reduction CMS estimated earlier this year.

This is the 11th time the sustainable growth rate, an annual growth rate used to determine physician payments under Medicare and is a part of the Balanced Budget Act of 1997, has resulted in a payment cut. Congress must either repeal or reform the SGR by the end of the year, or the 27.4 percent Medicare rate cuts will affect physicians starting Jan. 1, 2012.

CMS Administrator Donald Berwick said in a news release that President Barack Obama's administration is committed to fixing the SGR to ensure payment cuts do not take effect. "This payment rate cut would have dire consequences that should not be allowed to happen," Dr. Berwick said in the release. "We need a permanent SGR fix to solve this problem once and for all."

Department of Health and Human Services Secretary Kathleen Sebelius echoed Dr. Berwick's thoughts in an HHS news release, saying the SGR is flawed and needs to be permanently fixed instead allowing Congress to delay the reductions year after year. "The pattern of threatened SGR cuts and last-minute Congressional rescues is in itself not a sustainable solution and must be remedied," she said in the release.

If the SGR is repealed, Medicare spending on physician services would increase by roughly $300 billion over the next decade, but new cuts would have to found elsewhere in the national budget to offset those costs.

In total, CMS projects total payments under the MPFS in calendar year 2012 will be approximately $80 billion. Other provisions of the final rule include the following:

•    In the third year of a four-year transition, new changes will be made to practice expense relative value units. PE RVUs in the 2012 calendar year will be a 25 percent/75 percent blend of the previous PE RVUs based on the American Medical Association's Socioeconomic Monitoring Surveys and the new PE RVUs developed using data from the Physician Practice Expense Information Survey.

•    More than 450 work RVUs for services reviewed in the 2011 calendar year MPFS final rule were finalized. A comprehensive list of all final values being on page 457 of the final rule document.

•    Seventy high-expenditure procedural codes that have not been reviewed since the 2006 calendar year were provided as potentially misvalued codes. Some of the CPT codes include 93015 cardiovascular stress test, 22612 lumbar spine fusion and 27130 total hip arthroplasty.

•    Medicare will reduce payment by 25 percent as part of the multiple procedure payment reduction policy to advance imaging services delivered to the same patient by the same physician or group practice in the same session on the same day. Originally, CMS proposed a 50 percent reduction.

•    The list of services that can be delivered via telehealth for which Medicare will reimburse providers now includes CPT codes 99406 and 99407 for smoking and tobacco cessation counseling services.

•    The three-day payment window policy will apply to nondiagnostic services that are clinically related to an inpatient admission when preadmission services are delivered in a wholly-owned or wholly-operated entity and if the patient is later admitted as inpatient within the payment window. In these cases, Medicare will pay physicians for the preadmission services under the MPFS at the lower hospital facility rate, but the services must be delivered in an entity owned and operated by the hospital and within the three-day window. The implementation date of this proposal will be July 1, 2012, instead of Jan. 1, 2012.

•    Criteria for a health risk assessment are being collected in conjunction with annual wellness visits, which were covered starting Jan. 1, 2011. CMS also plans to increase AWV payments modestly to reflect the additional office staff time required to administer an HRA to Medicare beneficiaries.

•    Meaningful use of electronic health records by eligible professionals within the Medicare and Medicaid EHR Incentive Programs will be demonstrated by continued attestation for reporting clinical quality measures and participation in a Physician Quality Reporting System-Medicare EHR Incentive Pilot.

•    Under the PQRS, CMS finalized several requirements:

o    Reporting under the group practice option: A group practice is defined as a group of 25 or more individual eligible professionals.
o    Reporting as individual eligible professionals: Seven core measure aimed at promoting the prevention of cardiovascular conditions must be report; 44 EHR measures are reportable in the Medicare EHR Incentive Program; and a total of 23 measures groups for reporting including several new groups, such as cardiovascular prevention, dementia, Parkinson's, cataracts and others.

•    Section 3007 of the Patient Protection and Affordable Care Act requires CMS to apply a value modifier, which compares the quality of care delivered to the cost of that care, to physician payment rates. All physicians and physician groups under the MPFS will be held to the value modifier by 2017. The items relating to the value modifier include quality of care measures (e.g., cardiovascular and chronic conditions and preventive measures) and cost measures (e.g., total per capita cost and per capita cost for conditions such as chronic obstructive pulmonary disease, heart failure, diabetes and others).

CMS will accept comments on the final rule until Jan. 31, 2012, and will respond in the MPFS for the 2013 calendar year.

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Related Articles on Medicare Physician Fee Schedule:

MedPAC Approves Final SGR Repeal, Physician Payment Fix
AHA Submits Comments on 2012 Physician Fee Schedule, OPPS
CMS Issues Physician Fee Schedule Proposed Rule

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