CMS Proposes Payment Change Rates for 2012 Physician Fee Schedule

The Centers for Medicare & Medicaid Services has proposed a rule
that would update payment policies and rates for physicians and non-physician
practitioners for services paid under the 2012 Medicare Physician Fee Schedule,
with a total payment projection of $80 billion.

The proposed 2012 rule expands what the Centers for Medicare &
Medicaid Services (CMS) referred to in a press release as “the potentially
misvalued code initiative.” The expansion is part of a CMS effort to
better ensure accurate Medicare payments for physician services.

Under current law, Medicare providers face across-the-board reductions
in payment rates based on the Sustainable Growth Rate (SGR) formula adopted in
the Balanced Budget Act of 1997. The law would mean a projected 29.5% reduction
in 2012 Medicare payment rates for services.

“This payment cut would have serious consequences, and we cannot
and will not allow it to happen,” CMS Administrator Donald M. Berwick, MD,
stated in the release. “We need a permanent SGR fix to solve this problem
once and for all. That’s why the president’s budget and his fiscal
framework call for averting these cuts and why we are determined to pass and
implement a permanent and sustainable fix.”

According to the release, the CMS is focusing this year on the highest
volume and dollar codes billed by physicians to determine whether the codes are
overvalued — and if evaluation and management codes are undervalued.

Further proposals include changes in payment adjustment for geographic
variation in the cost of practice. This process involves using American
Community Service
(ACS) data in place of Housing and Urban Development rental
data, as well as using ACS data in place of the data currently used for
non-physician employee compensation.

According to the release, further changes involve the expansion of
multiple procedure payment reduction to professional interpretation of advance
imaging services, the expansion of the list of services that can be furnished
through telehealth, the update of a number of physician incentive programs and
the implementation of the third year of a 4-year transition to new practice
expense relative value units based on data from the Physician Practice
Information Survey adopted in the 2010 Medicare Physician Fee Schedule.


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