CMS Issues Physician Fee Schedule for Calendar Year 2010

On October 30, 2009, the Centers for Medicare and Medicaid Services (CMS) issued the final rule and payment rates for physicians and non-physician practitioners paid under the Medicare Physician Fee Schedule (PFS). Among other changes, the new PFS enacts a 21.2 % reduction in the conversion factor update, as mandated by the Sustainable Growth Rate (SGR) adopted by the Balanced Budget Act of 1997. Although Congress has previously acted to prevent the SGR reductions in calendar years 2003 to 2009, it has taken no such action for 2010. While virtually all observers expect Congress to step in and prevent the SGR reductions, either by modifying the SGR formula to effect a permanent remedy or by overriding the formula for just one or two years, CMS is bound by current law until Congress acts.

In addition to the SGR payment reduction, the PFS final rule enacts a number of new provisions, including:

• Phasing in use of the new Physician Practice Information Survey (PPIS) to calculate physician practice expense Relative Value Units (RVUs). CMS will begin phasing in use of the new survey data over a four year period. Practice expense RVUs for medical oncology will not be calculated using the PPIS data.
• Ceasing payment for consultation codes other than the G codes used to bill for telehealth consultations. CMS will increase payments for existing evaluation and management services.
• Increasing the equipment utilization rate assumption for medical equipment priced over one million dollars from 50 percent to 90 percent, phased in over a four year period. The new assumption rate will not apply to expensive therapeutic equipment.
• Increasing the Medicare share of payments for outpatient mental health services to 55 percent, as required by statute.
• Changing the requirements under the Physician Quality Reporting Initiative (PQRI) and the Electronic Prescribing Incentive Program, including simplifying the reporting requirements for electronic prescribing, adding new individual measures and measure groups to PQRI, and adding an electronic health record-based reporting mechanism to accept data from certain electronic health reporting products for certain PQRI measures.

The new PFS final rule and comment is scheduled to be published in the Federal Register on November 25, 2009.