Update on 2012 Medicare Physician Payment Rates

The payroll tax extension legislation that was passed by Congress and signed by the President on December 23, 2011, delayed the 27.4 percent Medicare physician payment cut for two months.  It also extended the floor on the work geographic practice cost index (GPCI), and extended the therapy caps exception process.

The two-month extension provided for a zero percent update to the Medicare conversion factor. However, the final rule indicated that there would be a 0.18% increase in the conversion factor for budget neutrality. This change was effective January 1, 2012.  The budget neutrality increase is due to the Centers for Medicare & Medicaid Services (CMS) adoption of the RVS Update Committee recommendations for mis-valued codes.  The 2011 conversion factor was $33.9764.  The 2012 conversion factor will now be $34.0376.

Because Congress acted so late in 2011 to prevent the payment cut, claims must still be held for a period of time to allow CMS time to develop the new payment rate files and the Medicare claims administration contractors time to install and test the files. CMS expects that most, if not all contractors will be ready to process claims under the revised rates on or before January 18, 2012.

The table below lists the physician fee schedule update for the nursing facility codes with the new updates reflected. The figures do not include any geographic adjustments.

Code	2011 Pay (CF =33.9764)	2012 Pay (CF =34.0376)	Change in Pay 2011-2012	% Change in Pay 2011-2012
99304	$88.00	$89.86	$1.86	2.1%
99305	$123.67	$126.96	$3.29	2.7%
99306	$157.31	$161.00	$3.69	2.3%
99307	$42.13	$42.54	$0.41	1%
99308	$64.89	$66.03	$1.14	1.8%
99309	$85.28	$86.80	$1.52	1.8%
99310	$126.39	$129.00	$2.61	2.1%
99315	$61.50	$69.78	$8.28	13.5%
99316	$79.84	$100.07	$20.23	25.3%
99318	$90.04	$91.90	$1.86	2.1%

^{Source:Medicare Program; Payment Policies under the Physician Fee Schedule, Five-Year Review of Work Relative Value Units, Clinical Laboratory Fee Schedule: Signature on Requisition, and Other Revisions to Part B for CY 2012, Addendum B}

If Congress fails to pass a new extension or address the SGR after the two-month extension, the 27.4 percent cuts could be implemented. See article below with table showing new rates if a cut occurs.

AMDA Analyzes 2012 Medicare Physician Fees

The Centers for Medicare & Medicaid Services (CMS) has released its final fee schedule rule officially titled Medicare Program; Payment Policies under the Physician Fee Schedule, Five-Year Review of Work Relative Value Units, Clinical Laboratory Fee Schedule: Signature on Requisition, and Other Revisions to Part B for CY 2012. CMS proposes that the conversion factor for 2012 will be $23.9635.  Almost every year for more than a decade, Congress has acted to temporarily prevent the pay cuts from taking effect. Therefore, AMDA’s analysis of the fee schedule includes calculations with and without the 2012 reduction.

The table below lists the physician fee schedule update for the nursing facility codes if the pay reduction does not take effect. The figures do not include any geographic adjustments.

The table below lists the physician fee schedule update for the nursing facility codes if the final rule’s 27.4 percent for services in 2012 takes effect. The figures do not include any geographic adjustments.

The table below lists the Relative Value Units (RVU) for the nursing facility codes. The table includes the recent increase in physician work RVUS for the nursing facility discharge day management codes (99315, 99316) AMDA achieved recently.

Source: Medicare Program; Payment Policies under the Physician Fee Schedule, Five-Year Review of Work Relative Value Units, Clinical Laboratory Fee Schedule: Signature on Requisition, and Other Revisions to Part B for CY 2012, Addendum B.

Additional areas in the final rule:
Physician Quality Reporting System
In terms of criteria for satisfactory reporting for 2012, the proposed rule requested public comment on whether geriatricians should be included in the proposed CY 2012 core measure reporting requirement. AMDA had commented that geriatrics should be included as a specialty for mandatory reporting purposes when and if the measures include consideration of the special characteristics of this population.  

CMS decided not to finalize the proposed requirement stating that the agency had “insufficient time to properly update our analysis systems to check for an eligible professional’s specialty, [therefore CMS is] not finalizing our proposed requirement that physicians practicing in internal medicine, family practice, general practice, and cardiology report on at least 1 Physician Quality Reporting System core measure.”

Physician Fee Schedule Finalizes Higher Values for NF Discharge Codes

The Centers for Medicare & Medicaid Services (CMS) has released its final fee schedule rule officially titled Medicare Program; Payment Policies under the Physician Fee Schedule, Five-Year Review of Work Relative Value Units, Clinical Laboratory Fee Schedule: Signature on Requisition, and Other Revisions to Part B for CY 2012. The rule finalizes CMS’ acceptance of an increase in recommendations for the nursing facility discharge day management services work relative value units AMDA, the American Academy of Family Physicians, and the American Geriatrics Society presented in October 2010.

Code                                                       Current RVU       2012 RVU
99315 Nursing fac discharge day               1.13                        1.28
99316 Nursing fac discharge day               1.50                        1.90

AMDA projects that the acceptance of the recommendation to increase the physician work values for the nursing facility discharge codes is $4,317,621.

(The payment impact = change in work RVUs * allowed services * 2011 conversion factor.)

“The increased values are very appropriate and place the discharge codes in line with the reimbursement for the rest of the family of nursing home codes.  AMDA appreciates the response we had from survey respondents who were instrumental in deriving these values,” said Charles Crecelius, MD, PhD, CMD, who presented on behalf of AMDA before the RUC.

The final rule also announced that Medicare payment rates will be reduced by 27.4 percent for services in 2012 unless Congress intervenes. This reduction is less than the 29.5 percent reduction that CMS had estimated in March of this year because Medicare cost growth has been lower than expected. The conversion factor for 2012 will be $ $24.6712.   

Clinical Laboratory Fee Schedule: Signature on Requisition

In CMS’ 2011 Physician Fee Schedule Final Rule, they proposed to retract the policy that required a physician’s or nurse practitioner’s (NPP) signature on requisitions for clinical diagnostic laboratory tests paid on the basis of the clinical laboratory fee schedule. After careful consideration of all comments received from stakeholders, CMS is finalizing their proposal to retract the policy and reinstate the prior policy that the signature of the physician or NPP is not required on a requisition. This requirement was scheduled to go into effect January 1, 2011. However, AMDA opposed this requirement and urged CMS to delay implementation of this provision. AMDA pointed out that implementing this requirement is particularly troublesome in skilled nursing facilities. In the 2009 Medicare Fee Schedule proposed rule, CMS acknowledged that the complexity of care required by many residents of SNFs may be significantly greater than the complexity of care generally associated with patients receiving office visits. AMDA agreed, stating that most of these medically complex patients require frequent and immediate laboratory tests. In the letter to CMS, AMDA pointed out that many laboratory test orders come in the middle of the night, “If a physician is not present at the nursing facility when the resident may need the test, this could cause a delay in diagnosis, because some physicians will wait until the morning to order tests. In turn, this failure to diagnosis may lead to worsening conditions or an unexpected discharge from the nursing facility and into a hospital emergency room.” In December 2010, CMS delayed implementation of this requirement. Soon after, CMS discovered how difficult and burdensome this requirement would be to physicians and NPPs. It was then CMS decided to retract the policy. AMDA also sent a letter to CMS supporting their decision. CMS based this decision on comments from stakeholders, such as an example in the long term care setting, when a physician may not be available in person on a daily basis. CMS states in the final rule “we now believe we underestimated the potential impact [this policy would have] on beneficiary health and safety…we understand there are concerns that certain populations of patients, such as nursing home patients [who] may have laboratory tests ordered urgently by a distant physician or NPP to obtain information that is imminently needed in order to assess a need for immediate referral to a hospital, or emergency department.”

Following a release of the final rule, Department of Health and Human Services Secretary Kathleen Sebelius issued a statement acknowledging that physicians are facing steep payment cuts as a result of a flawed 1997 law. She states “Almost every year for more than a decade, doctors have faced this annual threat and the Congress has in turn acted to temporarily prevent these deep reductions from taking effect. We have not and will not let deep cuts to doctors’ payments occur.  The Obama Administration is 100 percent committed to fixing the flawed Medicare payment system and protecting Medicare beneficiaries’ access to doctors.”

Another important area within the final rule included CMS’ decision not to finalize their proposal to have the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC) review Evaluation and Management (E/M) codes that were noted as the highest Physician Fee Schedule expenditures for each specialty. AMDA opposed the proposal, which would have required a review of the nursing facility family of codes.

In a joint letter, AMDA, the American Academy of Home Care Physicians (AAHCP), and the American Geriatrics Society (AGS) recommended that cognitive services could be properly valued by restructuring the CPT codes to accurately describe the services physicians perform by considering other related activities such as medication regimen review, advance directives/end-of-life care, coordination of care among multiple health professionals and the variety of non face-to-face services that are becoming increasingly prevalent, such as literature review and multi-platform communication.

The societies explained “The current CPT codes were developed more than 20 years ago and describe an episode of care for patients with defined problem(s) that were intended to be resolved within the timeframe of the visit event. They do not describe the longitudinal care provided to patients with multiple chronic conditions who require extensive care coordination, lifestyle education, and caregiver support – none fully valued in the mid-1980 Harvard Study and therefore not included even in today’s relative value unit (RVU) valuations.” CMS acknowledged the comment in the rule.

CMS stated its intent to continue to work with stakeholders on how to value and pay for primary care and patient-centered care management, and would welcome ideas from the medical community for how to improve care management through the provision of primary care services.

CMS’ decision was applauded by the AAHCP, AGS, and AMDA. Speaking for AAHCP Public Policy Chair, Dr. George Taler, Constance Row, Executive Director of the AAHCP said, “The AAHCP joins with its colleagues at the AGS and AMDA in welcoming CMS’s decision to withdraw its proposal for review of all E/M codes in favor of an approach that includes study of the results of existing chronic care management and payment structure initiatives and working with professional societies to fashion subsequent proposals. The AAHCP believes the Independence at Home demonstration, scheduled to begin in 2012 will contribute important information to the needed discussion of future directions.”

AGS Advisor to the RUC, Alan Lazaroff, MD, comments, "This is an important victory for AGS, along with our colleagues at AMDA - Long Term Care, and AAHCP. We are delighted that CMS has been so responsive to our concerns regarding E/M codes. We will continue to work hard to re-frame physician payments to more accurately reflect the work of geriatrics health professionals caring for older patients with multiple chronic and complex conditions. CMS' consideration of policy alternatives to the E/M review is a positive first step in the right direction."

AMDA Advisor to the RUC Dennis Stone, MBA, MD, CMD, agrees adding “CMS’ decision is a huge leap forward in our battle to identify and value managing the complexities of chronic disease and its multiple co-morbidities. Efforts to bundle this significantly unique body of work into the universal E/M codes has consistently run into the same wall as when the AMA tried to mandate universal documentation guidelines several years ago. A post-surgical visit is not a geriatric chronic disease visit in needed documentation or value.  CMS is now giving those who provide transitional coordination, complex medication regimen review, end-of-life care oversight the ability to do what other specialties have done for years...separately identify that work and get paid for it.  At last we might be able to say...'there’s an App for that’.”

Next week’s Health Policy Advisor will provide more analysis of the November 1st final rule.

NOTE: AMDA advocated before the AMA/Specialty Society Relative Value Scale Update Committee (RUC), which makes annual recommendations regarding new and revised physician services to the Centers for Medicare & Medicaid Services (CMS). In 2007 and 2010, the AMA RUC supported AMDA’s recommendation to CMS, and AMDA successfully obtained higher physician work values for the nursing facility family of codes. When AMDA has this representation, your professional voice is at its strongest. Please consider membership in the American Medical Association to ensure that AMDA can continue representing your needs at this critical time in medicine.

Facing 29.5% Physician Pay Cut in 2012, Berwick Calls for Permanent SGR Fix

The Centers for Medicare & Medicaid Services (CMS) has released its annual proposed fee schedule officially titled Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2012. Medicare payment rates could be reduced by 29.5 percent for services in 2012, if the proposed rule takes effect. “This is the eleventh time the SGR formula resulted in a payment cut, although the cuts have been averted through legislation in all, but CY 2002,” states a CMS news release. 

“This payment cut would have serious consequences and we cannot and will not allow it to happen,” said Dr. Donald M. Berwick, CMS Administrator. “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.”

CMS proposes that the conversion factor for 2012 will be $23.9635. 

The table below lists the physician fee schedule update for the nursing facility codes. The figures do not include any geographic adjustments.

The table below lists the payment rate if the conversion factor remains the same as 2011.

The table below lists the Relative Value Units (RVU) for the nursing facility codes. The table includes the recent increase in physician work RVUS for the nursing facility discharge day management codes (99315, 99316) AMDA achieved recently.

The proposed rule also implements or discusses provisions of the Affordable Care Act and the Medicare Improvements for Patients and Providers Act of 2008. In addition, this proposed rule discusses payments for the Physician Quality Reporting System; the Electronic Prescribing Incentive Program; and the Physician Resource-Use Feedback Program and the value modifier. AMDA is reviewing the proposed rule and will publish an analysis in future issues of Health Policy Advisor.

Comments on the proposed rule are due August 30, 2011. CMS will respond to comments in a final rule to be issued by November 1, 2011.

The Centers for Medicare & Medicaid Services (CMS) has released the 2009 utilization data that was used for the final rule Medicare Program; Proposed Revisions to Payment Policies Under the Physician Fee Schedule, and Other Part B Payment Policies for Calendar Year 2011. The data shows that while the number of services has increased by 2.1%, the total allowed charges went up nearly 7%. “This is a continued reflection of AMDA’s leadership in obtaining new and revised codes and then achieving increased work RVUs,” said AMDA Director of Government Affairs Kathleen Wilson, PhD. The new physician work values AMDA achieved for the nursing facility family of codes initially became effective on January 1, 2008.

Summary Table: Nursing Facility Codes Allowable Charges & Services

Frequency Data for the Nursing Facility Services Family of Codes

To view the frequency data for all of the CPT codes, click here. Follow the link to the entitled “2009 Utilization Data Crosswalked to 2010 [ZIP, 11MB].”

AMDA’s Guide to Long Term Care Coding, Reimbursement and Documentation may help you get the reimbursement you deserve. Get yours today at www.amda.com/order