The Centers for Medicare & Medicaid Services (CMS) announced final changes to policies and payment rates for services to be furnished during calendar year (CY 2010) by more than 1 million physicians and non-physician practitioners who are paid through the Medicare Physician Fee Schedule (MPFS). The MPFS sets payment rates for more than 7,000 types of services in physician offices, hospitals and other settings.
Current law requires CMS to adjust the MPFS payment rates annually based on an update formula which requires application of the Sustainable Growth Rate (SGR) that was adopted in the Balanced Budget Act of 1997. This formula has yielded negative updates every year beginning in CY 2002, although CMS was able to take administrative steps to avert a reduction in CY 2003, and Congress has taken a series of legislative actions to prevent reductions in CYs 2004 through 2009. In the absence of Congressional action for the CY 2010 physician update, the final rule with comment period will reduce the conversion factor for services on or after Jan. 1, 2010 by 21.2% rather than the -21.5% projected in the proposed rule. The difference is due to the use of the most recently available data on CMS spending for physicians’ services.
“The administration tried to avert the pending fee schedule cut in the FY 2010 budget proposal that it submitted to Congress, and remains committed to repealing the SGR,” Jonathan Blum, director of the CMS Center for Medicare Management, said in a press release. “In the meantime, CMS is finalizing its proposal to remove physician-administered drugs from the definition of ‘physicians’ services’ for purposes of computing the physician fee schedule update. While this decision will not affect payments for services during CY 2010, CMS projects it will have a positive effect on future payment updates.”