The Centers for Medicare and Medicaid Services (CMS) proposed changes to policies and payment rates for services rendered during calendar year (CY 2010) under the Medicare Physician Fee Schedule (MPFS). The MPFS sets payment rates for more than 7,000 types of services in physicians’ offices, hospitals, and other settings. The changes would affect payments to physicians and nonphysicians who are paid under MPFS.
CMS is required to update the MPFS rate annually based on a specific formula. 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 2004-2009. The recent proposals put forth by CMS are intended to increase rates for services for CY 2010, which is currently projected to have a rate reduction of -21.5%.
For CY 2010, CMS is proposing to include data from the Physician Practice Information Survey (PPIS), conducted by the American Medical Association, in the MPFS update formula.
Additionally, CMS is proposing to remove the cost of physician-administered drugs from the definition of “physician services.”
“As part of health care reform, the Administration supports comprehensive, but fiscally responsible reforms to the physician payment formula,” wrote the CMS Office of Public Affairs in an announcement. “Consistent with this goal, the Administration announced in the FY 2010 President’s Budget that it would explore the breadth of options available under current authority to facilitate such reforms, including an assessment of whether the cost of physician-administered drugs should continue to be included in the payment formula.”
Other changes proposed by CMS include:
• A proposal was made to refine how Medicare recognizes the cost of professional liability insurance in its payment system. CMS wrote, “This would promote payment equity by redirecting the portion of Medicare’s payment for professional liability insurance to those physicians that have the highest malpractice costs.”
• CMS proposed to stop making payment for consultation codes. These codes are typically billed by specialists and paid at a higher rate than equivalent evaluation and management (E/M) services. Resulting savings would be redistributed to increase payments from the existing E/M services.
• CMS proposed to revise the Electronic Prescribing Incentive Program (e-Prescribing Program) and the Physician Quality Reporting Initiative (PQRI) to promote improvement in quality of care and patient outcomes.
“The impact to sleep professionals is the consideration of the practice expense component and the consideration of the individual physician’s cost of malpractice insurance. Both of these increases to the physician fee schedule are a result of cooperation between the AMA and CMS,” says Peggy Miller, senior consultant at DME Defender, Houston. “The most positive change for any professional would be the incentive payments for e-prescribing.”
Additional proposed changes were put forth by CMS. CMS is accepting comments until August 31 and will respond with a final rule to be issued by November 1, 2009. Unless otherwise specified, the new payment rates and policies will apply to services furnished to Medicare beneficiaries on or after January 1, 2010.