Several Postponements Benefit Practices

When President Obama signed into law legislation to temporarily prevent the scheduled Medicare sustainable growth rate (SGR)-related payment cut for physicians and other practitioners from taking effect on Jan. 1, he also extended a number of other “expiring provisions” affecting your practices.

While the physician fee schedule update will be 0 percent, other changes to the relative value units (RVUs) used to calculate the fee schedule rates must be budget neutral. According to a CMS press release, “To make those changes budget neutral, the conversion factor must be adjusted for 2012.” CMS is developing the 2012 Medicare Physician Fee Schedule (MPFS) to implement the zero percent update.

CMS and Congress implemented several changes or postponements of policies:

1. The following three geographic components of the MPFS payment are adjusted: physician work, practice expense, and malpractice expense. Section 303 of the Temporary Payroll Tax Cut Continuation Act of 2011 (TPTCCA) extends the existing floor on the physician work geographic practice cost index through February 29, 2012.

2. CMS has increased the payment amount for the initial and annual wellness visit—which has no cost sharing for patients—to account for the introduction of health risk assessment (HRA).

3. The law extends the 2011 5 percent increase in payments for certain mental health services through February 29, 2012.

4. Primary care physicians, nurse practitioners, clinical nurse specialists, and physician assistants may be eligible to receive an incentive payment equal to 10 percent of their allowed charges for primary care services under Medicare Part B. This incentive is paid in addition to any physician incentive payments for services furnished in Health Professional Shortage Areas.

5. The exceptions process for outpatient therapy caps has been extended. Outpatient therapy service providers may continue to submit claims with the KX modifier Specific required documentation on file when an exception is appropriate, for services furnished Jan. 1 – Feb. 29, 2012.

Therapy caps are determined on a calendar year basis; therefore, all patients begin a new cap year on Jan. 1. For physical therapy, speech language pathology, and occupational therapy services combined, the limit on incurred expenses is $1,880. Deductible and coinsurance amounts applied to therapy services count toward the amount accrued before a cap is reached, and also apply for services above the cap where the KX modifier is used.

6. In the MPFS regulation published in the Federal Register Nov. 2, 1999 CMS finalized a policy to pay only the hospital for the technical component (TC) of physician pathology services furnished to hospital patients. To allow those independent laboratories to be separately paid for the TC of a physician pathology service provided to a hospital patient sufficient time to negotiate new arrangements with hospitals, the implementation of this rule was administratively delayed until 2001. Subsequent legislation formalized a moratorium on the implementation through 2011.

Congress has temporarily restored the moratorium through Feb. 29, 2012. Eligible independent laboratories may submit claims to Medicare for the TC of physician pathology services furnished to patients of a hospital, regardless of the beneficiary’s hospitalization status on the date the service was furnished.

7. The following ambulance policies have also been extended through Feb. 29, 2012:

  • The 3 percent increase in the ambulance fee schedule amounts for covered ground ambulance transports that originate in rural areas, and the 2 percent increase for covered ground ambulance transports that originate in urban areas;
  • The provision relating to air ambulance services that considers any area designated as a rural area as of December 31, 2006 shall continue to be treated as a rural area for purposes of making payments under the ambulance fee schedule for air ambulance services; and
  • The provision relating to payment for ground ambulance services where the base rate of the fee schedule is increased when the ambulance transport originates in an area included in those areas comprising the lowest 25th percentile of all rural populations arrayed by population density.

8. Congress has extended the Outpatient Hold Harmless provision through Feb. 29, 2012 to rural hospitals with 100 or fewer beds, and to all sole community hospitals and Essential Access Community Hospitals, regardless of bed size.

9. The 2011 payment rate for bone mass measurement has been extended through Feb.29, 2012. This extension will be reflected in the revised 2012 MPFS.


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