The Centers for Medicare and Medicaid Services is making several proposals to refine Medicare payments to physicians under the Medicare Physician Fee Schedule, which is expected to increase payment rates for primary care services.
The MPFS sets payment rates for more than 7,000 types of services in physician offices, hospitals and other settings. The proposals include an update to the practice expense component of physician fees.
For 2010, CMS is proposing to include data about physicians’ practice costs from the Physician Practice Information Survey (PPIS), a new survey from the American Medical Association.
The Medicare law requires CMS to adjust the MPFS payment rates annually based on an update formula, which includes application of the Sustainable Growth Rate (SGR) that was adopted in the Balanced Budget Act of 1997. The formula has yielded negative updates every year since 2002, although CMS took administrative steps to avert a reduction in 2003 and Congress has taken action to prevent reductions every year since then.
Based on current data, CMS is projecting a rate reduction of 21.5 percent for CY 2010.
The administration announced in the FY 2010 President’s Budget that it would explore reforms, including an assessment of whether the cost of physician-administered drugs should continue to be included in the payment formula.
While working with Congress to develop a more appropriate mechanism for updating physician payment rates, CMS is proposing to remove physician-administered drugs from the definition of “physician services” for purposes of computing the physician update formula in anticipation of legislation to provide fundamental reforms to Medicare physician payments.
The proposal is not expected to change the projected update for services during CY 2010, but CMS forecasts that it would reduce the number of years in which physicians are projected to experience a negative update.
CMS is also proposing to stop payments for consultation codes, which are typically billed by specialists and paid at a higher rate than equivalent evaluation and management (E/M) services.
Other proposals include:
- Increasing the payment rates for the Initial Preventive Physical Exam (IPPE), also called the “Welcome to Medicare” visit, to be more in line with payment rates for higher complexity services.
- Redefining how Medicare recognizes the cost of professional liability insurance in its payment system.
- Addressing concerns from the Medicare Payment Advisory Commission and Government Accountability Office about rapid growth in high-cost imaging services. CMS is proposing to reduce payment for services that require the use of expensive equipment and implement a requirement in the MIPPA that suppliers of the technical component of advanced imaging services be accredited beginning Jan. 1, 2012 by designating accrediting organizations for these suppliers and using the imaging quality standards that have been developed by the AOs.
- Implementing provisions in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) that add Medicare benefit categories for cardiac and pulmonary rehabilitation services and chronic kidney disease education, beginning Jan. 1, 2010.
Refining practice expenses, eliminating payment for consultation codes and revising the treatment of malpractice premiums would increase payments to general practitioners, family physicians, internists and geriatric specialists by 6 percent to 8 percent (before taking into account the proposed update and other proposed changes to the fee schedule).
The proposed rule contains provisions to promote improvement in quality of care and patient outcomes through revisions to the Electronic Prescribing Incentive Program (e-Prescribing Program) and the Physician Quality Reporting Initiative (PQRI).
Eligible professionals or group practices that meet the requirements of each program in CY 2010 will be eligible for incentive payments for each program equal to 2 percent of their total estimated allowed charges for the reporting periods. CMS is proposing to simplify the reporting requirements for the electronic prescribing measure and provide eligible professionals with more reporting options. CMS is also proposing a new process for group practices to be considered successful electronic prescribers.
In addition, CMS is proposing to add more measures and more measures groups for eligible professionals to report under the PQRI, to provide a mechanism for participants to submit quality measure data from a qualified electronic health record and create a process for group practices to use for reporting the quality measures.
CMS will accept comments on the proposed rule until August 31 and will issue a final rule by Nov. 1, 2009. Unless otherwise specified, the new payment rates and policies will apply to services furnished to Medicare beneficiaries on or after Jan. 1, 2010.