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Key Updates from the CMS 2011 Final Physician Fee Schedule

CMS’s 2011 Final Physician Fee Schedule (the “Fee Schedule”) provides for over 2000 pages of new rules and regulations pertaining to physician reimbursement under Medicare for 2011. With the passing of the Patient Protection and Affordable Care Act (“PPACA”) and the Healthcare and Education Reconciliation Act (collectively referred to as the “Affordable Care Act”), physicians have found many new conditions tied to their reimbursement for rendering services to Medicare beneficiaries. Some of the notable changes are below:

• Sustainable Growth Rate (“SGR”) – The SGR is an annual growth rate that applies to physicians’ services paid by Medicare. According to the Fee Schedule, by January 1, 2011, the SGR for physicians will be cut by a total of 24.9%–once on December 1, 2010 and once on January 1, 2011. This SGR cut has been anticipated for physicians as it was to be in effect in June of 2010.

• Annual Wellness Visit (“AWV”) – Beginning January 1, 2011, Medicare will reimburse physicians for performing an AWV. An AWV takes into account a health risk assessment and creates a personalized prevention plan for beneficiaries. Certain elements must be identified in the beneficiary’s first visit that include: establishing or updating the beneficiary’s family and medical history, a list of the individual’s current providers and suppliers and medications prescribed, height, weight, and body-mass index, blood pressure, detection of any cognitive impairment, establishing a screening schedule for the next 5-10 years, establishing a list of risk actors and conditions for which interventions are recommended or underway, furnishing personalized health advice and referral to health education or preventive counseling services or programs.

• Elimination of Deductible and Coinsurance for most Preventive Services – Beginning January 1, 2011, the Part B deductible and 20% coinsurance will be waived for preventive services that have been either “strongly recommended” or “recommended” by the US Preventive Services Task Force.

• Incentive Payments to Primary Care Physicians – Primary care physicians are eligible for incentive payments of 10% of the primary care practitioner’s allowed charges for primacy care services under Part B. According to the Fee Schedule, a primary care practitioner is defined as:

1. A physician who has a primary specialty designation of family medicine internal medicine, geriatric medicine, pediatric medicine, nurse practitioner, clinical nurse specialist, or physician assistant; and
2. For whom primary care services accounted for at least 60% of the allowed charges under Part B for the practitioner in a prior period as determined by the Secretary.
Primary care services are defined as those services identified by the HCPCS codes of 99201-99215, 99304-99340, and 99341-99350. The incentive payments will be made on a quarterly basis based on the primary care services furnished and any other physician bonus payments for services that are furnished in Health Professional Shortage Areas.

• In Office Ancillary Services – for MRI, CT, and PET scans, physicians must disclose to patients, in writing, at the time of the referral that a patient may obtain the services from another provider. At the time of the referral, the referring physician must provide the patient with a list of five alternative suppliers (who supply the same service) within a 25-mile radius of the physician’s office location (please check back for a more detailed entry regarding this change).

• Modification of Multiple Procedure Payment Policy for Advanced Imaging Services – Effective January 1, 2011, CMS will reduce the payment rates for procedures associated with expensive diagnostic equipment assigning a 75% equipment utilization rate assumption to expensive diagnostic imaging equipment used in CT and MRI services.

• Maximum Period for Submitting Medicare Claims – For services furnished after January 1, 2010, the maximum period for submitting Medicare fee-for-service claims has decreased to 12-months from the date of service. However, there are four exceptions to this rule:

1. If CMS or one of its contractors determines that the failure to meet the 12-month deadline was due to a CMS or CMS contractor error or misrepresentation;

2. If CMS or one of its contractors determines that the failure to meet the 12-month deadline was due to the fact that a beneficiary was retroactively entitled to Medicare;

3. If CMS or one of its contractors determines that the failure to meet the 12-month deadline was due to a beneficiary being retroactively entitled to Medicare, but a state Medicaid agency recovered the Medicaid payment for the furnished service 6 months after the service was furnished; or
4.CMS or one of its contractors determines that the failure to meet the 12-month deadline was because, at the time the service was furnished, the beneficiary was enrolled, and subsequently disenrolled, in a Medicare Advantage plan or a PACE provider organization and the Medicare Advantage plan or PACE provider organization recovered its payment for the furnished service 6 months or more after the service was furnished.

The final rule will appear in the November 29, 2010 Federal Register. Except as otherwise specified, the policies and payment rates adopted in the final rule will be effective for services furnished on or after January 1, 2011. As is evident from these select provisions from the Fee Schedule (oftentimes driven by the provisions in the Affordable Care Act), physicians’ reimbursement for services rendered to Medicare beneficiaries is becoming increasingly more difficult for physicians to receive, especially with the significant decrease in the SGR. If the decrease in SGR is not postponed (or even eliminated), senior citizens will experience difficulty in accessing medical care–one of the evils the Affordable Care Act sought to address.

For more information, please contact the Health Law Partners at (248) 996-8510, (212) 734-0128, or (770) 804-6475 or visit the HLP website.

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