CMS Proposes Payment Policy and Rate Changes Under the Medicare Physician Fee Schedule for 2012

August 12, 2011, 9:04 AM

Centers for Medicare & Medicaid Services (CMS) proposed its update to the Medicare Physician Fee Schedule (MPFS) for the calendar year of 2012. Under this plan, more than one million providers of vital health services receive compensation for the care they provide Medicares beneficiaries. It proposes several things, but most importantly calls for a 29.5% percent reduction in payment rates to physicians and nonphysicians under this plan according to the statutory sustainable growth rate formula (SGR). CMS has voiced its displeasure with such a cut in reimbursement to such providers and asserts that it is not a correct valuation of their services. Its hands are tied however, because this formula can only be changed through legislation. Congress has confronted this problem every year since 2003, and has each year enacted legislation to chip away at these large reductions, saving providers from a large reduction in reimbursement for services provided to Medicare beneficiaries. Fortunately for Medicare beneficiaries and the providers treating such beneficiaries, Congress is again expected to implement legislation as a temporary fix to decrease this severe cut in reimbursement.

The proposed rule sets out other notable changes that all purport to ensure that Medicare reimburses physicians accurately for the services provided.

In what could be the most significant change in reimbursement methodology, the proposed rule aims to expand Medicares multiple procedure payment reduction (MPPR) policy for advanced diagnostic imaging services. Currently, the MPPR policy applies only to the technical component of diagnostic imaging services and not to the professional component. Upon implementation of the proposed rule, CMS will, in the event of multiple diagnostic imaging procedures performed on the same date of service, reimburse at 100% of the fee schedule amount for technical and professional components of the highest paid procedure, but will only reimburse at 50% of the fee schedule amount for both technical and professional components of any other diagnostic imaging procedure performed on the same date of service.

CMS is accepting comments on the proposed rule until August 30, 2011 and will review and respond to all comments by November 1, 2011. For more information, please click here to see the entire proposed rule. --Christopher L. McLean