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'Final' 2012 Fee Schedule Still Assumes Large Cuts

By: ALICIA AULT, Elsevier Global Medical News

If current law stands, physician fees will be cut by 27.4% in 2012, not the 29.5% originally projected, according to the final payment rule issued in November by the Centers for Medicare & Medicaid Services.

The slight decrease is due to lower-than-expected Medicare cost growth, CMS officials said. Unless Congress steps in, the reduction will go into effect Jan. 1 as mandated by Medicare’s Sustainable Growth Rate (SGR) formula.

Both President Obama, in his budget, and CMS officials have called for an overhaul of the SGR. The agency repeated that call with the issuing of the fee rule.

"This payment rate cut would have dire consequences that should not be allowed to happen," CMS Administrator Donald Berwick said in a statement. "We need a permanent SGR fix to solve this problem once and for all."

Under the final rule, which sets the conversion factor at $24.6712 for calculating 2012 fees, Medicare will issue some $80 billion in payments next year, according to CMS estimates.

In addition to addressing physicians’ fees, the final rule includes many cost-cutting and efficiency-oriented provisions. For instance, the CMS is expanding its look at codes that may be overvalued. Previously, the agency focused on high-cost codes in cardiology and radiology. In 2012, it will take a broader look at high-cost codes in each specialty (see box, page 2). The goal is to rebalance payments so that primary care is not undervalued, according to the final rule.

The agency is also taking a knife to payments for imaging services by going after multiple images taken of the same patient at the same practice on the same day. The CMS had proposed a 50% cut in the professional component of fees for those services, but the final rule makes a 25% reduction.

The final rule made several changes to the electronic health records (EHRs) incentive program and also to the Physician Quality Reporting System (PQRS). For EHRs, physicians now have several portals through which to submit data, not just one established by the CMS. The agency also more closely aligned the PQRS requirements with the meaningful-use requirements under the EHR incentive program.

The rule also establishes policies for paying physicians for higher quality and more-efficient care in the future under provisions of health reform. Such payment adjustments will begin in 2015 and be applied to all physicians by 2017.

Under the rule, the "value-based modifier" will use the PQRS core set (which focuses on cardiovascular conditions) and the core, alternative core, and additional EHR incentive program measures (which focus on several chronic conditions and preventive measures).

Payments to group practices will be based on the core set of the Group Practice Reporting Option measures and measures of preventable hospital admissions for heart failure and chronic obstructive pulmonary disease.

The cost measures will be both total per capita cost and per capita cost for selected conditions including chronic obstructive pulmonary disease, heart failure, coronary artery disease, and diabetes.

For provisions that are open to comment, the CMS will accept comments until Jan. 3, 2012, and then respond in the 2013 fee rule.CfA

Alicia Ault is associate editor with Elsevier Global Medical News.

Related Story

Fee Schedule Has Some LTC Victories

The Medicare fee schedule marks the Centers for Medicare & Medicaid Services' acceptance of an increase in the relative value units (RVUs) for nursing facility day-management services, according to an analysis by AMDA's government affairs department.

The RVU for code 99315 climbs from 1.13 to 1.28, and that for code 99316 goes from 1.50 to 1.90, cushioning the blow of the 27.4% cut due for most Medicare fees Jan. 1 if Congress doesn't intervene. The two RVU changes could add $4.3 million to the incomes of long-term care physicians in 2012, against what fees would have been under the old RVUs, the government affairs department calculated (see table above).

"The increased values are very appropriate and place the discharge codes in line with the reimbursement for the rest of the family of nursing home codes," said Charles Crecelius, MD, PhD, CMD, AMDAs representative to the AMA's Relative Value Scale Update Committee (RUC).

The final rule also included the CMS's decision not to finalize its proposal to have the RUC review many evaluation and management codes. AMDA had opposed the review, which would have included the nursing-facility family of codes.

In a joint letter Aug. 30, AMDA, the American Academy of Home Care Physicians, and the American Geriatrics Society explained, "The current CPT [Current Procedural Terminology] codes were developed more than 20 years ago and describe an episode of care for patients with defined problem(s) that were intended to be resolved within the timeframe of the visit event. They do not describe the longitudinal care provided to patients with multiple chronic conditions who require extensive care coordination, lifestyle education, and caregiver support ...." The CMS acknowledged the comment in the final rule and stated its intent to work with stakeholders on how to value primary care and patient-centered care management.

AMDA's adviser to the RUC, Dennis Stone, MD, CMD, said, "CMS's decision is a huge leap forward in our battle to identify and value managing the complexities of chronic disease and its multiple comorbidities ... A postsurgical visit is not a geriatric chronic disease visit in needed documentation or value. CMS is now giving those who provide transitional coordination, complex medication regimen review, and end-of-life care oversight the ability to do what other specialties have done for years ... separately identify that work and get paid for it."

In another victory for physicians serving nursing facilities, the CMS final rule also retracted the policy that would have required a physician's or a nurse practitioner's signature on requisitions for many diagnostic laboratory tests.

The policy had been scheduled to go into effect last Jan. 1, but the CMS agreed to reconsider. At that time, AMDA pointed out that implementing this requirement would be particularly troublesome in skilled nursing facilities.

The final rule states that CMS officials "understand there are concerns that certain populations of patients, such as nursing home patients and patients confined to their homes, may have laboratory tests ordered urgently by a distant physician or [nurse practitioner] to obtain information that is imminently needed in order to assess a need for immediate referral to a hospital, emergency department or other facility."


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