• CMS Publishes Final Physician Fee Schedule Rule
  • December 2, 2009 | Author: Donna S. Clark
  • Law Firm: Baker & Hostetler LLP - Houston Office
  • On October 30, 2009, the Centers for Medicare & Medicaid Services (CMS) published the final rule with comment establishing the Medicare Part B physician fee schedule for CY 2010 (Rule). The fee schedule, which will be published in the Federal Register on November 25, 2009, reflects a 21.2 percent cut in Medicare payments as mandated by the sustainable growth rate, adopted by Congress in 1997. As with prior years, Congress is expected to intervene to override the proposed reduction.

    Payment Provisions
    Since January 1, 1992, Medicare has paid for physician services under a fee schedule methodology based on national uniform relative value units (RVUs) which are calculated on the basis of resources used in furnishing a service. Three RVU components are established for each service--physician work, practice expense and malpractice expense, which then are adjusted to reflect geographic practice cost differences. The RVUs are converted to a dollar amount by application of a conversion factor.

    As stated above, the conversion factor established for FY 2010 reflects 21.2 percent reduction. In an effort to make a positive update more plausible in the future, CMS eliminated physician-administered drugs from the definition of physician services applicable to the calculations of the fee schedule update. CMS noted that additional measures to fix the update issue will necessitate congressional action.

    For FY 2010, a new data source is used to calculate the practice expense component of RVUs other than medical oncology--the Physician Practice Information Survey (PPIS). CMS states that the PPIS, conducted by the American Medical Association in 2007 and 2008, yields more recent data and includes data from both physicians and nonphysician practitioners. Equipment usage assumption also is relevant for calculating practice expense RVUs. Currently set at 50 percent, the utilization rate for high-priced ($1 million) equipment will be increased to 90 percent. CMS declined to increase the utilization rate for high-priced therapeutic equipment. The new practice expense calculations will be phased in over a four-year period.

    Specific Services
    Telehealth Services -- CMS has added individual health and behavior assessment and intervention services and follow-up skilled nursing facility inpatient consultations to the list of covered telehealth services.

    Consultation Codes -- As a result of a 2006 OIG report on use of consultation codes, which identified a 75 percent error rate, CMS has eliminated the use of consultation codes for all services except telehealth services, effective January 1, 2010. Physicians now will bill an initial hospital or nursing facility visit code and new and established office visit codes in lieu of consultation codes. The work RVUs for these codes have been increased (6 percent for office and 0.3 percent for hospital and facility codes).

    Mental Health Services -- As mandated by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), CMS is eliminating the outpatient mental health limitation, which currently limits Part B payment to 50 percent of the approved amount for outpatient mental health treatment. Payment is increased to 55 percent for 2010 and additional increases will be phased in over five years, ending in 2014.

    Teaching Anesthesiologists and CRNAs -- As required by MIPPA, payment will be made at the regular fee schedule rate for a teaching anesthesiologist’s involvement in training residents in either a single anesthesia case or two concurrent anesthesia cases. Similarly, a teaching certified registered nurse anesthetist (CRNA) will be paid at the regular CRNA rate for involvement in training student nurse anesthetists in two concurrent anesthesia cases.

    Cardiac Rehabilitation and Intensive Cardiac Rehabilitation -- The Rule establishes new conditions and standards for these programs.

    Pulmonary Rehabilitation Services -- The Rule implements coverage and establishes standards for a pulmonary rehabilitation program, effective January 1, 2010.

    Kidney Disease Patient Education -- The Rule implements coverage of these services for patients with Stage IV chronic kidney disease, effective January 1, 2010.

    Incentive Programs
    PQRI -- The Physician Quality Reporting Initiative (PQRI), implemented in 2007, is a voluntary reporting program that provides an incentive payment to eligible professionals, including physicians, who satisfactorily report data on quality measures for covered professional services. The incentive payment for 2010 is two percent of the Medicare Part B allowed charges of the eligible professional. Effective January 1, 2010, group practices, defined as those with a minimum of 200 eligible professionals, as well as individuals, will be permitted to report on quality measures and receive the incentive payment. Also, additional reporting options are offered for 2010, including reporting through a qualified electronic health record (EHR) product. CMS added 30 new individual PQRI measures for 2010 and six measure groups. As required by MIPPA, CMS will post on its website the names of eligible practitioners and group practices that satisfactorily report quality measures.

    Incentives for Electronic Prescribing -- This program, established by MIPPA, promotes the use of electronic prescribing by authorizing incentive payments of two percent of total Medicare Part B allowed charges to eligible professionals or group practices who are successful electronic prescribers. The Rule establishes required functionalities and Part D electronic prescribing standards for qualified electronic prescribing systems for 2010 and criteria for successful reporting, which includes additional options, including a qualified EHR product. Group practices, as well as individuals, are eligible to participate in this incentive program; however, participation is limited to group practices that have been selected to participate in the PQRI (i.e., those with at least 200 professionals). In addition to the financial incentive, the names of successful electronic prescribers are published on a CMS website.

    Advanced Diagnostic Imaging Services
    As required by MIPPA, Medicare payment for the technical component of advanced diagnostic imaging services (MRI, CT, PET, and nuclear medicine) only may be made to accredited suppliers, effective January 1, 2012. CMS will designate accreditation organizations by January 1, 2010, and the Rule sets required components for designation status and procedures for granting and withdrawing designated status. CMS-designated accreditation organizations will apply standards relating to qualifications for technical personnel, qualifications and responsibilities for medical directors and supervising physicians (who can be the same person), quality control mechanisms, equipment performance specifications and safety measures.

    Physician Self-Referral
    Phase III of the Stark regulations provided that physicians “stand in the shoes” of their physician organizations; thus, if the organization has a financial relationship with an entity that furnishes designated health services (DHS), the physician also will have a direct relationship with the DHS entity. When applying exceptions to arrangements involving physicians who are “standing in the shoes” of their physician organizations that require a written contract, the Rule clarifies that not all physicians in the organization must sign the written contract, although CMS also notes that relevant referrals for determining compliance with the exception include the referrals of all members of the physician organization.

    CMS also solicits comments to the new definition of DHS entity, which includes both entities billing for DHS and those performing DHS. Although the new definition was effective October 1, 2009, CMS declined to clarify the scope of services that would constitute performing the DHS. The new definition of entity has resulted in the restructuring of under arrangements transactions. CMS now is soliciting comments to determine if further guidance is necessary and, if so, what clarifications would be beneficial. Specific questions for clarification are set forth in the Rule.

    The Rule also addresses issues relating to the DME competitive bidding program, Medicare Part B drug payment issues and payment for oxygen and oxygen equipment. The Rule has been published as a final rule with comments, which are due by December 29, 2009.