Medicare Physician Fee Schedule for 2011 Proposed Rule Summary
The Centers for Medicare and Medicaid Services (CMS) announced the 2011 Medicare Physician Fee Schedule (MPFS) Proposed Rule on June 25. The following are some of the highlights of what CMS is proposing to implement in 2011 that will have an impact on radiology practices.
Sustainable Growth Rate Formula (SGR) and its Effects the Conversion Factor
The law requires Medicare to run the SGR formula to calculate what the update would be to the conversion factor given growth in utilization of Medicare services and expenditures. CMS has calculated that the conversion factor would be reduced in 2011 by an additional -6.1% as a result of this proposed rule. This cut would be added to the -21.2 percent cut that was recently delayed by Congress. [Note that on June 25, 2010, President Obama signed into law the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010.” This law establishes a 2.2 percent update to the Medicare Physician Fee Schedule (MPFS) payment rates retroactive from June 1 through Nov. 30, 2010.]
Equipment Utilization Rate
Congress mandated in the Patient Protection and Affordable Care Act (PPACA) that the equipment utilization rate be changed to 75% for all diagnostic equipment that is priced over $1 million. This affects computed tomography (CT) and magnetic resonance (MR) imaging. CMS clarifies in this rule that it also affects computed tomographic angiography (CTA) and magnetic resonance angiography (MRA). The effects of the new Congressionally mandated equipment usage rate of 75% will be fully implemented as of January 1, 2011. The savings from this mandate will come out of the MPFS budget.
The 75 percent utilization rate supersedes the November 25, 2009 final rule in which CMS changed the equipment utilization rate from 50 to 90 percent based on flawed Medicare Payment Advisory Commission (MedPAC) data, and which was being phased-in over four years. The effects of the Physician Practice Information Survey (PPIS) data will continue to be phased-in over four years. The ACR will be running new impact charts and will make them available to members shortly.
Multiple Procedural Reduction Rule
Congress mandated that the multiple procedural payment reduction rule (MPPR) be changed from 25% to 50% for CT, MR and ultrasound (US). There 11 families of codes to which this typically applies. CMS is now proposing to apply this reduction rule across all three modalities to the technical component (TC) of all studies in these modalities that are performed on a patient in the same session even if they are non-contiguous and across the various modalities. CMS also proposes to add cardiac CT and coronary CTA to the list of codes to which this applies. In addition, CMS is proposing to expand this policy to therapeutic services. This largely affects speech pathology and physical therapy services.
Any savings that are attributable to the studies that are mandated for the 50% reduction in the TC will be taken out of the MPFS budget. Any savings that are attributable to studies that are added to this policy outside of what is applicable in the legislation are part of the fee schedule’s budget neutral process and the relative value units (RVUs) will shift to other services. CMS justifies the expansion of this policy to be within the spirit of the Congressional mandate that requires CMS to find areas where codes are misvalued in the fee schedule. CMS also points to recommendations from the recent Government Accounting Office (GAO) report and Medicare Payment Advisory Commission (MedPAC) comments on this issue.
Misvalued Procedures
The PPACA mandates that CMS find other methods for identifying misvalued services in the Medicare Physician Fee Schedule. CMS discusses the seven areas in which it has been working with the Relative Value Unit Update Committee (RUC) to identify misvalued codes, which includes:
1) Codes and families of codes for which there has been the fastest growth
2) Codes or families of codes that have experienced substantial changes in practice expense
3) Codes that were recently established for new technologies or services
4) Multiple codes that are frequently billed in conjunction with furnishing a single service
5) Codes with low relative values, particularly those that are often billed multiple times for a single treatment
6) Codes which have not been subject to review since the implementation of the Resource-Based Relative Value Scale (the so-called 'Harvard-valued codes')
(7) Other codes determined to be appropriate by the Secretary
The Secretary also is mandated to have an extensive validation process for the identified misvalued codes. CMS has requested comments on how they should go through this validation process and will publish the process they want to adopt in a future proposed rule. The ACR will be carefully evaluating this section since many radiology codes have fallen within the seven categories marked for review.
Prices for High-Cost Supplies
CMS would like to develop a refined process for regularly updating prices for high-cost supplies under the MPFS and is soliciting comments on how they could improve on their current process. The ACR will look at this carefully since many of the high-cost items identified are those used in interventional radiology procedures.
Rebase of the Medical Economic Index
CMS is proposing to rebase the medical economic index (MEI), which is used to calculate the updated sustainable growth rate (SGR) formula and, thus, the conversion factor. The MEI was last rebased and revised in 2003 for the 2004 MPFS. The current base year for the MEI is 2000, which means that the cost weights in the index reflect physicians’ expenses in 2000. CMS believes it is desirable to periodically rebase and revise the index so that the expense shares and their associated price proxies reflect more current conditions. CMS proposes to rebase the MEI to reflect appropriate physician expenses based on 2006 expenditures. The AMA data from the PPIS is one of the data sets being used to determine expenditure weights. The ACR will look into this further to determine any impact.
Refinement Panel Process
CMS proposes to keep the refinement panel process it uses to re-evaluate interim relative values where CMS does not accept the RUC recommendations, and specialties and other outside parties are not in agreement and ask for further review. However, CMS proposes to change the evaluation process the panel uses and these changes are open for comment. The ACR has participated in these panels in the past.
Payment for Bone Density Tests
Section 1848(b) of the Patient Protection and Affordable Care Act (PPACA) (as amended by section 3111 of the ACA) changes the payment calculation for the two dual-energy x-ray absorptiometry (DXA) bone density studies for axial skeleton and vertebral fracture assessment for CYs 2010 and 2011. This provision requires payment for these services at 70 percent of the 2006 RVUs for CPT codes 77080 and 77082, the CY 2006 conversion factor (CF), and the geographic adjustment for the relevant payment year. CMS is paying in CY 2010 under the MPFS for these DXA codes at the specified rates. CMS has calculated physician work, practice expense and malpractice RVUs for CPT codes 77080 and 77082 for 2011, which are displayed in Addendum B of this proposed rule.
Prohibition on Physician Self-Referral for Certain Imaging Services
PPACA mandates creating a new disclosure requirement for the in-office ancillary services exception to the prohibition on physician self-referral. Specifically, section 6003 provides that, with respect to referrals for magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), and any other designated health service (DHS) specified under section 1877(h)(6)(D) that the Secretary determines appropriate, CMS must promulgate a requirement that the referring physician inform a patient in writing at the time of the referral that the patient may obtain the service from a person other than the referring physician or someone in the physician’s group practice and provide the patient with a list of suppliers who furnish the service in the area in which the patient resides. CMS is proposing that referring physicians provide a list of at least 10 suppliers in this notice who should be located within a 25-mile radius of the physician’s office location at the time of the referral. CMS is considering whether to expand this disclosure requirement to other radiology and imaging services.
The PPACA mandates that CMS implement this provision effective January 1, 2010. However, CMS believes that retroactive rulemaking is not required. Therefore, CMS is proposing that the new disclosure requirement apply to services furnished on or after the effective date of January 1, 2011.
Impact of Changes to the Practice Expense Relative Values and the Multiple Procedural Reduction Rule Changes
|
Specialty |
Combined Impact Fully Implemented |
Combined Impact Transitioned |
|
Cardiology |
-5% |
-2% |
|
Family Practice |
3% |
1% |
|
General Surgery |
3% |
1% |
|
Interventional Radiology |
-9% |
-4% |
|
Neuroradiology |
4% |
1% |
|
Nuclear Medicine |
-6% |
-3% |
|
Radiation Oncology |
-1% |
2% |
|
Diagnostic Testing Facility |
-20% |
-7% |
|
Portable X-ray Supplier |
9% |
8% |
|
Radiation Therapy Centers |
-1% |
5% |
* Does not include the impact of the current law -6.1 percent CY 2011 update.
