CY 2013 Medicare Physician Fee Schedule (PFS)

Proposed Rule Released by CMS        
   by Christina Sochacki R.N., J.D. & The Council for Affordable Health Coverage

[PDF]
 

Through 765-pages, the Centers for Medicare and Medicaid Services (CMS) has released its Calendar Year (CY) 2013 Proposed Rule for practitioners who are paid under the Physician Fee Schedule (PFS) and Medicare Part B. ¹

The proposed rule is expected to be published in the July 30, 2012 Federal Register, with comments due no later than September 4, 2012, and a final rule issued around November 1, 2012.

Overview:

Medicare Sustainable Growth Rate (SGR) targets are intended to control the growth in aggregate Medicare expenditures for physicians' services.  CMS calculates that current estimates of the SGR adjustment to physician reimbursement will result in an approximate 27 percent cut in payment rates for 2013.²  The 27 percent rate cut is based on March 2012 analysis from CMS.³  These payment cuts are estimated to produce an 18.9 percent decrease in the CY 2013 SGR.⁴  The SGR generated payment reductions have been overridden by Congress every year except one, however.⁵

Summary:

Overall, payments for primary care providers would increase and payments to select other specialties would decrease for CY 2013.  CMS’ estimate of the CY 2013 combined impact of all the proposed changes on total allowed charges ranges from a 7 percent increase for family practice to a decrease of 19 percent for radiation therapy centers.⁶  The proposed rule puts an emphasis on increasing reimbursement for primary care and care coordination services.  To achieve budget neutrality as required by the statute, specialist payments, particularly for cancer care providers, were reduced to increase payments to primary care.

Payment reductions by specialty include: ⁷

Specialty	Cumulative Impact*
Anaesthesiology	- 3 %
Cardiology	- 3%
Diagnostic Testing Facility	- 8%
Interventional radiology	- 3%
Nuclear Medicine	- 4%
Radiation Oncology	- 15%
Radiology	- 4%
Urology	- 2%

* This column shows the estimated CY 2013 combined impact

 on total allowed charges of all the proposed changes.

Highlights:

Potentially Misvalued Codes Under the Physician Fee Schedule

·       There are more than 1,000 identified potentially misvalued codes.  CMS proposes to review two new categories of potentially misvalued codes: 1) services with annual Medicare allowed charges that total at least $10,000,000; 2) stand-alone practice expense procedure time and services with anomalous time. 

·       Specifically, CMS proposes to reduce the procedure time assumptions in developing RVUs for intensity modulated radiation treatment (IMRT) delivery and stereotactic body radiation therapy (SBRT) delivery.  CMS and the Medicare Payment Advisory Commission (MedPAC) have identified these services as potentially misvalued.

Additional Multiple Procedure Payment Reductions (MPPR

·         CMS would expand the MPPR to create a 25 percent reduction to the technical component of second and subsequent diagnostic procedures performed in cardiovascular and ophthalmology diagnostic services, including many procedures performed by interventional radiologists.

Durable Medical Equipment (DME) Face-to-Face Encounters

·         To help combat fraud and reduce improper payments, CMS proposes to implement a face-to-face requirement as a condition of payment for certain high dollar DME items.

Changes to Physician Quality Reporting System (PQRS)

·       The rule would implement a number of changes to the PQRS to align CMS’ physician-focused quality improvement program with other quality programs, reporting systems.  The proposed changes are aimed at easing the administrative burden for providers.
·       Changes include: 

o   Aligning criteria for PQRS reporting using EHRs with those for meeting the clinical quality measures (CQMs) component of meaningful use under the EHR Incentive Program.

o   Decreasing the minimum threshold of patients on which eligible professionals are required to report using registries from 30 to 20 under PQRS.

o   Defining satisfactory PQRS reporting for 2015 as reporting 1 PQRS measure or measures group.

o   Expanding the definition of group practice to include groups of 2-24 eligible professionals for purposes of PQRS reporting under the Group Practice Reporting Option (GPRO) and for being a successful electronic prescriber using the eRx GPRO. 

o   Continuing the use of the attestation method and the PQRS-Medicare EHR Pilot for reporting CQMs established last year.

Physician Compare Website 

·        CMS launched the Physician Compare website in December 2010 to provide consumers with information such as a physician's name, address and Medicare participation status.  CMS is proposing to expand the website in its next phase to include ACOs and group practices participating in PQRS.

Implementation of the value-based payment modifier

·         Beginning in CY 2015, CMS would apply the value-based payment modifier, required under the Affordable Care Act (ACA), to groups of 25 or more physicians initially in 2015, and then to all physicians in 2017.  Physician groups who are deemed to provide lower-quality care than their peers will receive a payment reduction of 1 percent in 2015 for the value-based payment modifier.  For eligible physician groups who do not meet the PQRS reporting criteria, by submitting at least ten electronic prescriptions by June 30^th, there would be an additional 1.5% payment reduction in 2015.

Hospital Outpatient Quality Reporting Program (OQR)

·         CMS is attempting to align CQM reporting with the Hospital OQR program and the Meaningful Use program, to reduce the burden of multiple reporting systems on providers.  CMS will consider adoption of e-measures, to enable the more efficient collection of data.

·         If finalized, hospitals would be required to report on 23 measures for the CY 2013 payment determination and 24 measures for the CY 2015 payment determination. 

ASC Quality Reporting Program

·         CMS proposes to impose additional requirements on ASCs under its ASC Quality Reporting (ASCQR) Program, including procedural requirements for data reporting, requirements for updating policies, data completeness requirements, and a methodology for applying the 2 percent reduction when reporting requirements are not satisfied.  CMS is seeking comments on the appropriate approach for future selection of quality measures.

PQRS-EHR Incentive Pilot

·         To align the Electronic Prescribing (eRx) program with other incentive and quality programs CMS has proposed additional hardship exemptions from application of the eRx program payment adjustment.

·         CMS would allow hardship exemptions from requirements of the eRx Incentive Program for participants in the EHR Incentive Program.  The two additional hardship exemptions would be for:

o   Eligible professionals or group practices who achieve meaningful use. Eligible professionals or group practices who achieve meaningful use.  CMS contends that the eRx requirements in Meaningful Use are more rigorous than in the eRx incentive program.

o   Eligible professionals or group practices who demonstrate intent to participate in the Meaningful Use Program through the adoption and registration of a certified EHR system.  Eligible professionals may not claim the intent exemption if they have already adopted a certified EHR or have received an incentive payment.

Payment for New Preventive Telehealth-Eligible Services – HCPCS G Codes

·         Several preventative services would be added to the list of Medicare covered telehealth services, including: screening and behavioral counseling services for alcohol misuse, depression, obesity, and sexually transmitted infections; and annual face-to-face intensive behavioral therapy for cardiovascular disease.

Ordering Requirements for Portable X-ray Services

·         CMS proposes to allow non-physician practitioners (NPPs) and limited-license physicians to order portable x-ray services. Currently, CMS regulations limit ordering of portable x-ray services to a doctor of medicine or osteopathy.

Key Takeaways:

·       The SGR program is not sustainable.   Payment cuts to Medicare providers will generate cost shifting – and increased costs – to those covered by private insurance. 

·       Uncertainty generated by threatened SGR driven payment reductions may cause access problems and some providers may opt out of Medicare or refuse to see new Medicare patients.

·         Aligning quality measures across program silos will help reduce regulatory cost burdens.

·       Expanding telehealth services will expand access to health.  Telehealth remains underutilized in Medicare, and holds potential for cost savings by directing Medicare patients to lower costs, less capital intensive settings.  Additional changes to the Medicare statute are necessary to expand Medicare’s coverage of telehealth in suburban and urban settings.

·       Value based payment systems are a good model to reward quality over volume.  Care must be taken to ensure adjustments are based on accurate, reliable data. 

— Christina Sochacki, R.N., J.D. is the Vice President of Legal and Government Affairs at the Council for Affordable Health Coverage.
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1. The proposed rule is available at, http://www.ofr.gov/OFRUpload/OFRData/2012-16814_PI.pdf; See also, addenda and other documents referenced in the proposed rule, available at, http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices-Items/CMS-1590-P.html.

2. A 27.4% reduction had been scheduled for CY 2012.

3. Analysis available at, http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SustainableGRatesConFact/Downloads/sgr2013p.pdf.

4. CMS provides its most recent estimate of the SGR and physician update for CY 2013 at, http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SustainableGRatesConFact/index.html?redirect=/SustainableGRatesConFact/.

5. See, The Medicare Physician Payment Innovation Act of 2012 (a bill that would permanently repeal the sustainable growth rate formula within the Medicare physician fee schedule), press release.. Available at, http://www.house.gov/apps/list/press/pa13_schwartz/pr_may9_sgrintro.html.

6. Table 84, p 683. Available at, http://www.ofr.gov/OFRUpload/OFRData/2012-16814_PI.pdf. 

7. Table 84, p 683, available at, http://www.ofr.gov/OFRUpload/OFRData/2012-16814_PI.pdf.