[author: Mark A. Stanley]

CMS has released its Calendar Year (CY) 2013 Final Rule for practitioners who are paid under the Physician Fee Schedule (PFS). CMS anticipates that many non-primary care specialties will see a decrease in payments under the final rule. As a corollary, primary care physicians can anticipate a payment rate increase under the final rule. CMS estimates that family care physicians would experience a 7 percent increase in payment rates, and other primary care physicians will see their payment rates increase 3-5 percent. The final rule may be viewed here [PDF].

CMS anticipates that, without changes to current law, the Sustainable Growth Rate (SGR) adjustment to physician reimbursement will result in an approximate 27 percent cut in payment rates for 2013. This adjustment has historically been reversed through congressional intervention.

Among other changes, the final rule:

• Continues implementation of the value-based payment modifier under the Affordable Care Act (ACA). Beginning in CY 2015, CMS will apply the value-based payment modifier to groups of 100 or more physicians (a change from the proposed rule, which would have applied the modifier to groups of 25 or more physicians). The modifier will be set at a 1 percent reduction for such physician groups that do not participate in the physician quality reporting system (PQRS).
• Establishes a new payment for services rendered to patients who are transitioning back to the community following certain discharges. The rule creates a new procedure code for non face-to-face care provided by a community physician in the 30 days following a patient’s discharge from an inpatient hospital stay, skilled nursing facility stay, or specified outpatient services. The payments reflect the community physician’s efforts to coordinate the patient’s care during the effective period.
• Eliminates the regulatory requirement for Medicare contractors to terminate non-random prepayment complex medical review within one year. As we noted here, contractors have not diligently followed the one year termination rule, so its elimination may not have much impact. Nonetheless, physicians should take note that they will no longer have this protection (albeit a modest protection) against overzealous Medicare contractors.
• Creates two new categories of potentially misvalued codes for review: “Harvard-valued” services for which the annual Medicare allowed charges are at least $10 million and services with stand alone practice expense procedure times will be evaluated by CMS for potential misvaluation.
• Reduces certain payment rates under the potentially misvalued code initiative. The reductions affect two radiation oncology treatment delivery methods: intensity-modulated radiation treatment and stereotactic body radiation therapy.
• Changes interest rate assumptions used to calculate payment for practice expenses. In order to more accurately reflect current economic conditions, the rule changes the interest rate assumption from 11 percent to a range of 5.5 to 8 percent. CMS anticipates that the change will cause a decrease in payments to capital-intensive specialties.
• Expands the multiple procedure payment reduction (MPPR). The rule applies a 20 percent MPPR (as opposed to the 25 percent MPPR originally proposed) to the technical component of cardiovascular and ophthalmology diagnostic services. CMS will reimburse the highest cost procedure at the full payment rate. The technical component of other diagnostic services furnished by the same physician or group practice to the same patient on the same day will be subject to the 20 percent MPPR.
• Requires face-to-face treatment as a prerequisite to payment for certain high-cost durable medical equipment items. The face-to-face encounter must occur within the six months prior to the written order. As proposed, the rule would have allowed the encounter to occur up to 30 days after the order.
• Expands the list of services eligible for coverage as telehealth services. The rule adds several preventative services to the list of telehealth-eligible services. The services include several screening and behavioral counseling services related to alcohol misuse, obesity and sexually transmitted diseases, as well as annual face-to-face intensive behavioral therapy for cardiovascular disease and annual depression screening.
• Expands the list of professionals that can order Medicare-covered portable x-ray services. The rule revises the conditions of coverage in order to allow non-physician practitioners and limited-license physicians to order portable x-ray services, consistent with state licensure rules.
• Updates physician incentive programs – the Physician Quality Reporting System (PQRS), the ePrescribing (eRx) Incentive Program – as well as the Electronic Health Records (EHR) Incentive Program. The rule aligns quality reporting across the programs and offers simplified options for reporting.
• Completes the transition to the new practice expense relative value units. CMS began transitioning to data from the Physician Practice Information Survey (PPIS) with the CY 2010 PFS final rule.