MPFS 2012 — The 2012 Medicare Physician Fee Schedule is Finalized

CMS issued the final MPFS — the Medicare Physician Fee Schedule for 2012 — this past week. The key feature of the rule, for many folks, is the Sustainable Growth Rate-(SGR)-mandated 27.4% cut in Medicare professional serivces reimbursements. We now get to watch the drama unfold over the next eight weeks, as the MedPAC proposal to replace the SGR is bandied about, and the machinations of the supercommittee tasked with brokering a budget fix either do or do not get us closer to a reasoned approach to doing more with less.  The MedPAC idea is to drop the RBRVS conversion factor for specialty care payments 5.9% per year for two years, then hold it steady for 8 years, while keeping the primary care conversion factor flat for 10 years.  The net effect: physician payments will "only" double over the next 10 years.  (One clever idea squirreled away in the MedPAC report is that savings in the Medicare Shared Savings Plan (ACO) should be measured against a baseline of what Medicare would have spent on the care absent the changes in the proposed SGR fix — i.e., a higher baseline, with greater potential savings.  Another 50 clever ideas like this and we'll be talking about saving some real money.)

Well, the SGR will be fixed (or not) by Congress, not CMS.  The rest of the MPFS includes a variety of approaches to getting hands around the question of accuracy of the fee schedule.  For example, per the CMS presser:

• CMS is expanding its multiple procedure payment reduction policy to the professional interpretation of advance imaging services to recognize the overlapping activities that go into valuing these services.  This policy better recognizes efficiencies that are expected when multiple imaging services are furnished to the same patient, by the same physician or group practice, in the same session on the same day.

• CMS is adopting criteria for a health risk assessment (HRA) to be used in conjunction with Annual Wellness Visits (AWVs), for which coverage began Jan. 1, 2011 under the Affordable Care Act.  The HRA is intended to support a systematic approach to patient wellness and to provide the basis for a personalized prevention plan. CMS is increasing AWV payment modestly to reflect the additional office staff time required to administer an HRA to the Medicare population.

• CMS is expanding the list of services that can be furnished through telehealth to include smoking cessation services.  CMS is also changing the criteria for adding services to the telehealth list to focus on the clinical benefit of making the service available through telehealth.  This change will affect services proposed for the telehealth list beginning in CY 2013.

• The final rule updates or modifies aspects of a number of physician incentive programs including the Physician Quality Reporting System, the ePrescribing Incentive Program and the Electronic Health Records Incentive Program.

• The final rule also finalizes quality and cost measures that will be used in establishing a new value-based modifier that would adjust physician payments based on whether they are providing higher quality and more efficient care.  The Affordable Care Act requires CMS to begin making payment adjustments to certain physicians and physician groups on Jan. 1, 2015, and to apply the modifier to all physicians by Jan. 1, 2017.  CMS intends to work closely with physicians to ensure that efforts to improve the quality, safety, and efficiency of care do not diminish patient access to care.  The rule also finalizes CY 2013 as the initial performance year for purposes of adjusting payments in CY 2015.

• The final rule also implements the third year of a 4-year transition to new practice expense relative value units, based on data from the Physician Practice Information Survey that was adopted in the MPFS CY 2010 final rule.

In addition, CMS is expanding the "potentially misvalued code initiative," an effort to ensure Medicare is paying accurately for physician services and more closely managing the payment system.

Finally, after struggling over time with varying requirements for lab test "requisitions" and "orders," which resulted in a CY 2010 requirement for a signed order prior to labs being drawn/done, CMS is backing off of that requirement, in response to comments detailing the ways in which this would reduce patient convenience and have the potential to negatively affect care.

Other issuances out the same day include the 2012 OPPS /ASC rule and the ESRD PPS rule.

David Harlow 
The Harlow Group LLC
Health Care Law and Consulting