CMS Finalizes 2012 Medicare Physician Fee Schedule
By: Justin Vaughn, M.Div, CPC
Director of Compliance

11/17/2011

CMS published in November its “final rule” relative to the 2012 Medicare physician fee schedule (MPFS).  Some of the highlights of this rule are as follows:

A 27.4% reduction in reimbursement for physician services in 2012 is, by far, the most notable provision of the final rule.  In prior years, such threatened and draconian cuts were ultimately averted by direct intervention from Congress.  However, it is uncertain if our political representatives in Washington will ride to the rescue this time around.  Medac recommends you notify your senators and congressmen concerning your views on this matter.

• The Physician Quality Reporting System (PQRS) program will undergo 3 major changes in 2012, per the MPFS.  First, there will be a requirement for providers in certain specialties to report on certain “core measures.”  At this point, neither anesthesiology nor pain management appears to fall under this specialty-specific requirement.  Second, the group practice reporting option (GPRO) that existed in 2011 has been modified to allow smaller groups to participate.  Specifically, the group size threshold for the GPRO has been revised downward from 200+ providers in 2011 to only 25+ in 2012.   Third, the bonus for successful reporting in 2012 has been cut in half from the current 1% (based on your total Medicare allowable) to just 0.5%.

• The MPFS final rule contains changes for the E-Prescribing (eRx) Incentive Program, as well. While there were 6 hardship exemptions available this year to enable providers to avoid the 2012 non-participation penalty, there will only be 4 such exemptions available to file in 2012 and 2013 (to avoid the 2013 and 2014 penalties, respectively).  In addition, the final rule sets forth 2 periods, per year, for the purpose of dodging the eRx penalty.  These will be detailed in upcoming alerts for our pain management clients.  [The eRx program incentive and penalty do not apply to providers where allowable Medicare charges relative to office/outpatient E&M codes (eg, 99201-99215) from Jan to June in a given year account for less than 10% of the total allowable Medicare charges for the same period.  Therefore, it seems certain that the vast majority of anesthesiologists will not be eligible for this program and thus not subject to the penalty.  However, many pain management providers will be deemed program-eligible based on this E&M charge calculation.]

• The final rule mandates that physicians be reimbursed at the reduced “facility rate” for services performed at “entities wholly owned or operated by hospitals” when those services are related to an inpatient admission occurring within 3 days of receiving such services.

The information presented herein reflects general information that is current as of the date it was first published.  In light of changes that may occur in the health care regulatory and compliance environments, the author's presentation of this information might become outdated.  Please check with your individual legal and/or compliance advisor(s) prior to taking any significant actions based upon the information and advice presented.