2010 MPFS Final Rule Still Holds Surprises

The Centers for Medicare & Medicaid Services (CMS) announced, Oct. 30, final changes to 2010 Medicare Physician Fee Schedule (MPFS) policies and payment rates. Taking into account all changes in the final rule, CMS projects a payment increase between 5 and 8 percent for health care professionals paid under the MPFS. That’s the good news …

The bad news is, the final rule with comment period projects the annual update to the 2010 MPFS to be -21.2 percent. That’s better than the proposed 21.5 percent cut, but not much. In the absence of Congressional intervention, physicians and non-physicians still face sweeping payment cuts for over 7,000 services they may furnish in a physician’s office, hospital, or other setting in 2010.

The MPFS establishes payment rates based on an update formula which requires application of the Sustainable Growth Rate (SGR). Every year, since 2002, this formula has yielded negative updates to the conversion factor; and every year, Congress has stepped in to thwart the reduction. This year, however, physicians may not be so lucky.

Physician Payment Reform

The SGR is now tightly woven into health care reform, which continues to be under much debate. A recent attempt made by Sen. Debbie Stabenow (D-Mich.) to segregate the SGR from the various health care bills currently in circulation failed in the Senate (amednews, Silva). Not giving up without a fight, the U.S. House of Representatives unveiled, Oct. 29, H.R. 3961. This bill would repeal Medicare’s SGR formula and replace it with a payment system that provides for more predictable updates from Medicare (AMA Health System Reform Bulletin, Oct. 29). At this article’s deadline, H.R. 3961 had only made it as far as the House Ways and Means Committee.

“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,” said Jonathan Blum, director of the CMS Center for Medicare Management.

The health care industry has, without a doubt, many surprises in store for them regarding health care reform. The 2010 MPFS final rule, however, is not nearly as surprising.

More Payment Changes

As stated in the proposed rule, CMS is removing physician-administered drugs from the SGR formula.

“While this decision will not affect payments for services during CY 2010, CMS projects it will have a positive effect on future payment updates,” continued Blum.

CMS is also finalizing the proposal to include data about physicians’ practice costs from the American Medical Association’s (AMA) Physician Practice Information Survey (PPIS) to establish practice expense (PE) relative value units (RVUs). CMS will phase this change in over a four year period. The practice expenses for medical oncology, however, will continue to be determined using specialty supplemental survey data.

The Society of Cardiovascular Computed Technology (SCCT) said in a statement on its Web site, “The implementation of the PPIS dramatically cuts payment rates for cardiovascular and radiology services.”

According to the SCCT, “this data was not appropriately reviewed or validated. Cuts of this magnitude—whether enacted this year or spread over four years—cannot be absorbed.” Also in the statement, the SCCT lists specific codes that will be impacted the most.

The proposal to stop making payment for consultation codes other than the G codes that are used to bill for telehealth consultations, and to redistribute the resulting savings to increase payments for the existing evaluation and management (E/M) services also made it into the final rule. CMS said it will adjust the payment for the surgical global period to reflect the higher value of the office visits furnished during the global period.

CMS also still intends to increase payment 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.

Meanwhile, two significant modifications to the MPFS proposed rule include increasing the equipment utilization percentage that is assumed for purposes of setting PE RVUs. CMS will increase the equipment utilization rate assumption used to determine the practice expense for expensive equipment priced over one million dollars from 50 to 90 percent, but will phase in this change over a four year period. This change does not apply to expensive therapeutic equipment.

MIPPA Provisions

The final rule with comment period also implements a number of provisions in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) including:

Adding new Medicare benefit categories for cardiac and pulmonary rehabilitation services and for chronic kidney disease (CKD) education beginning Jan. 1, 2010. The final rule with comment period outlines what these programs will entail, how they will be paid under the MPFS and the criteria for covering these services.
Increasing the Medicare share of payments for outpatient mental health services to 55 percent from 50 percent, beginning a gradual transition to bring payment parity for mental health and medical services furnished to Medicare beneficiaries.
Implementing a requirement that suppliers of the technical component of advanced imaging services be accredited beginning Jan. 1, 2012. The accreditation requirement will apply to mobile units, physicians’ offices, and independent diagnostic testing facilities that create the images, but will not apply to the physician who interprets them.

Regarding equipment utilization, the SCCT said, “This is an additional reduction to the practice expense RVUs and reimbursement will be cut.”

Quality Reporting

A number of provisions included in the final rule 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). Specifically, the final rule simplifies the reporting requirements for the electronic prescribing measure, provides eligible professionals with more reporting options, and establishes a new process for group practices to be considered successful electronic prescribers. Eligible professionals or group practices that meet the requirements of each program in 2010 will be eligible for incentive payments for each program equal to 2.0 percent of their total estimated allowed charges for the reporting periods.

CMS is adding measures for eligible professionals to report under the PQRI, providing a mechanism for participants to submit quality measure data from a qualified electronic health record (EHR) and creating a process for group practices to use for reporting the quality measures.

Read the CMS fact sheet for more information about the e-Prescribing Program and PQRI provisions.

The 2010 MPFS final rule with comment will appear in the Nov. 25 Federal Register. CMS will accept comments on designated provisions of the final rule with comment period until Dec. 29.

View a copy of the final rule with comment period.