Key Points of the 2012 Medicare Physician Fee Schedule – Final Rule

The 2012 Medicare Physician Fee Schedule Final Rule with comment period was released by the Department of Health & Human Services (HHS) and the Center for Medicare and Medicaid Services (CMS) on November 1, 2011.  This special edition newsletter presents the finalized provisions that may affect your medical practice.

You may access this final rule in the Federal Register by clicking below and scrolling to Center for Medicare and Medicaid, Rules, Medicare Program.

MPFS 2012 Final Rule

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SGR UPDATE

CMS anticipates that, without changes to the law, the Sustainable Growth Rate (SGR) adjustment to physician reimbursement will result in a 27.4 percent cut in payment rates for 2012.  The rate is less than the 29.5% reduction that CMS had estimated in March 2011 because Medicare cost growth has been lower than expected.  The 27.4 percent reduction will be on the Conversion Factor used by CMS to convert the numeric relative value (RVU) assigned to each code to an actual dollar amount. The conversion factor for 2012 is $24.6712.

Several recommendations to replace and pay for the SGR formula, including suggestions other than physician payment cuts, had been submitted to the �super committee.�  As we all know, the super committee, tasked with identifying $1.5 trillion in savings, recently announced it would was not able to reach an agreement on programs to cut, resulting in automatic cuts of $1.2 million from federal spending over 10 years. These cuts include an annual 2 percent cut to Medicare providers, in addition to the SGR reduction.

Since there is not much time for a new SGR replacement package to be proposed to Congress, either another last-minute short-term fix for the SGR is likely or we all need to brace ourselves for a dramatic payment reduction.

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CMS Incentive Programs
 
There have been new additions, deletions and edits to the three CMS incentive programs for 2012.  Extensive information can be found on the CMS websites at the end of each incentive program article or you may access our 2012 CMS Incentive Programs’ Manual, which will provide you with information to get you started in participating in any of these programs.

Click below for our manual.

AHS PQRS Manual
 
The following articles briefly review the basic requirements and changes of each incentive program.

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2012 Physician Quality Reporting System (PQRS)

2012 PQRS BASICS 

• 2012 Incentive Payments will be 0.5% of a provider’s total Medicare allowablecharges for successful reporting, down from 1% in 2011.
• There will be a total of 210 measures
• 32 new measures were introduced for 2012
• 22 “measures groupsâ€� are available for reporting in 2012. All 14 measures groups from 2011 will be available as well as 8 new measures groups.
• 29 measures are available for reporting under Group Practice Reporting Option (GPRO)
• PQRS reporting may be done through claims-based, registry and EHR reporting mechanisms, depending on the chosen measures. 
• NEW– Core set of measures developed pursuant to theCMSMillions Hearts Campaign’s goal of preventing cardiovascular disease
• NEW– New measures that align with the Medicare Shared Savings Program & EHR Incentive Programs
• NEW– Elimination of the 6-month reporting period, except for reporting on “measures groupsâ€� via registry reporting.
• NEW–CMS will no longer count measures that are reported with a zero percent performance rate.
• NEW- Changed the definition of group practice (for reporting the GPRO option) from 2 to 25 EPs. The GPRO I and GPRO II options have been eliminated.  There is only the GPRO option for group practices composed of at least 25 EPs.
• NEW– Data submission vendors can submit on behalf of eligible professionals for EHR
• NEW- GPRO performance information will be posted on the Physician Compare website in 2013 –  Physician Compare Website: http://www.medicare.gov/find-a-doctor
• NEW- Provide interim (in addition to annual) feedback reports

PQRS Payment Adjustments

• Established CY 2013 as the reporting period for the 2015 Physician Quality Reporting System payment adjustment.  Payment adjustments will be made as follows:
  • 1.5 percent reduction for 2015; and
  • 2.0 percent reduction for 2016 and each subsequent year

 CMS PQRS Website  

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E-Prescribe (eRx) Incentive Program
 
eRx BASICS

• eRx incentive amounts are as follows:
  • 1.0 percent for 2012
  • 0.5 percent for 2013
  • There are no incentive or payment adjustments scheduled past 2014
• EPs must report 25 unique denominator eligible visits for the reporting period of January 1, 2012– December 31, 2012
• GPRO reporting must contain:
  • 625 visits for groups of 25-99 EPS
  • 2,500 visits for groups of 100+ EPs
• NEW- EPs may report eRx measures via direct EHR-based reporting or EHR Data Submission through a Vendor

eRx Payment Adjustments

To avoid 2013 payment adjustments in the Rx program, EPs must :

• Report on the electronic prescribing measure’s numerator code (G8553) at least 25 times for encounters associated with at least 1 of the denominator (visit) codes – Reporting period:  January 1, 2011–December 31, 2011
• **Report the electronic prescribing measure’s numerator code at least 10 times for reporting period:  January 1, 2012 – June 30, 2012 (via claims-based reporting only)

       **NEW- EPs may submit the eRx measure code regardless if there is an acceptable denominator code (visit code).  This was established for EPs who do not regularly subscribe during a billable visit, (ex., surgeons who subscribe during post-op visits that are not billable to Medicare.) This will only be allowed on the Jan – June reporting period via the claims-based submission.

CMS EPrescribe Website 

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EHR Incentive Program

EHR BASICS

• EPs may continue to satisfy the meaningful use objective to report CQMs (clinical quality measures) to CMS by reporting them through attestation, the same method as 2011.
• NEW – Establishment of a Pilot mechanism through which EPs participating in the Medicare EHR Incentive program may report CQM information electronically using Certified EHR Technology for the 2012 payment year.  This option is intended for those EPs who seek to earn both PQRS and EHR Incentive Program incentives by submitting data on a simple sample set of patients.  EPs may participate in this program by using either a direct EHR or using an EHR data submission vendor.

CMS EHR Incentive Website

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RVUs and GPCIs

Relative Value Units (RVUs)

2012 is the third year of the four year transition of incorporating the PPIS (Physician Practice Expense Information Survey) survey data into the calculation of Practice Expense (PE) per Hour which is included in the calculation of PE RVUs.  The PPIS will have a stronger effect this year on physician PE RVUs as it will account for 75% of the blend of the PPIS and the old Socioeconomic Monitoring Surveys (SMS).

Geographic Practice Cost Indices (GPCIs)
 
Section 1848(e)(1)(A) of the Social Security Act (Act) requires CMS to develop separate GPCIs to measure resource cost differences among localities compared to the national average for each of the three fee schedule components; physician work, practice expense (PE), and malpractice.  The PE and malpractice GPCIs reflect the full relative cost differences; the physician work GPCIs reflect only one-quarter of the relative cost differences compared to the national average.

The final rule changes the methodology when determining the adjustment of GPCIs as outlined below. 

• The physician work costs will remain the same but the physician work GPCI will be adjusted to account for the expiration of the 1.0 work GPCI floor on December 31, 2011.
• The rule increases the cost share weight of the PE and malpractice insurance and decreases the weight of the physician work GPCI. 
• The PE will increase due to the creation of a purchased services index to account for labor-related services by expanding the number of occupations utilized in the calculation of non-physician employee wages. The PE expense will be constructed with a fixed national weight based on the hours of each occupation. 

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Establishment of the Physician Value-Based Payment Modifier 
 
The rule finalized the quality and cost measures that will be used in establishing a new value-based modifier that would adjust physician payments based on whether they are providing higher quality and more efficient care as required by Section 3007 of the Affordable Care Act. (ACA).

Quality of Care Measures
 
CMS has selected measures that assess highly prevalent and high-cost conditions in the Medicare population to compare the quality of care to the cost of the care.   The following measures are the first to be used to assess physician performance, with more to follow in subsequent years after the methodology that will be used to calculate the value modifier has been finalized.

 For Individual Providers: 

• Physician Quality Reporting System (PQRS) core set, which focuses on cardiovascular conditions and
• The Core, alternative core, and additional EHR Incentive Program measures, which focus on several chronic conditions and preventive measures.

For Physicians in Group Practices

• Core Set of the Group Practice Reporting Option (GPRO) measures, which focus on chronic conditions and preventive measures and
• Measures of preventable hospital admissions for two ambulatory care sensitive conditions – heart failure and chronic obstructive pulmonary diseases.

Implementation and Performance Time Frames
 
Before beginning the 2013 rule-making process, CMS will review various ways to develop composites of cost and quality that could be used in the value-based modifier and will actively seek input from stakeholders through public meetings and other forums.
 
The performance period of calendar year 2013, (Jan. 1, 2013 – Dec. 31, 2013) will be used to calculate the modifier that would apply to items and services furnished by specific physicians and groups of physicians under the 2015 physician fee schedule.  CMS hopes to lessen the amount of time between the performance period and the payment adjustment period in future years, but until then, CY 2013 will be the first performance year.

Cost Measures
 
Cost measures were finalized to use both total per capita cost measures and per capita cost measures for selected conditions, including chronic obstructive pulmonary disease, heart failure, coronary artery disease, and diabetes.  The capita cost measures will be adjusted for geographic differences and are risk adjusted to ensure geographic and clinical comparability. 

UPDATES TO PHYSICIAN FEEDBACK REPORTS

The value-based modifier builds on the Physician Feedback Program which provides confidential feedback reports to physicians and physician group practices about the resource use and quality of care they provide to their Medicare patients.  The reports also quantify and compare patterns of resource use and costs relative to the performance of similar medical professionals.
 
To begin this project, CMS provided feedback reports, this Fall, to the 35 large medical group practices (each with 200 or more physicians) that participated in the PQRS GPRO in 2010 and will provide feedback reports to individual physicians in specific states whose Medicare contractors have the technology that could assist CMS in emailing the reports to a substantial number of physicians.
 
In future feedback reports, CMS will include episode based costs in order to develop a Medicare-specific episode grouper by January 1, 2012.  An episode grouper combines clinically-related health claims data over a defined period of time into an episode of care, such as a hip replacement procedure.  CMS will test and validate the initial grouper software in 2012 with the intention to include episode-based costs in future Physician Feedback reports.
 

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Potentially Misvalued Codes

Consolidation of Review of Potentially Misvalued Codes
 
CMS finalized its proposal to consolidate periodic review of work and practice expense (PE) RVUs and potentially misvalued codes into one process and will review these codes at least once every five years through an annual process, rather than once every five years.
 
Previously, work and practice expense RVU reviews have been conducted separately.  CMS will now combine the reviews of physician work and practice expense for each code.
 
Codes Potentially Requiring Updates to Direct PE Inputs
 
CMS finalized a process by which the public/stakeholders could submit codes for potential review, along with supporting documentation, on an annual basis during the 60-day public comment period following the release of the annual PFS final rule with comment period. This provision gives physicians and other stakeholders an opportunity to submit codes they feel are undervalued in order to increase the code(s)’ reimbursement.

Identification of Potentially Misvalued Codes
 
Section 3134 of the ACA mandates that CMS identify, and adjust payment for, potentially misvalued codes, and since 2009 CMS has reviewed over 700 codes. For 2012, CMS released the Fourth Five Year Review of Work, which will review 173 potentially, misvalued codes.
 
In previous years, CMS, along with the AMA RUC (Relative Value Scale Update Committee) have identified and reviewed misvalued codes based on various identification screens for codes at risk for being misvalued, such as codes with high growth rates, codes frequently billed together in one encounter, codes recently established for new technologies, etc.

In 2012, in addition to the 173 codes, CMS will send the AMA RUC a select list of high PFS expenditure procedural codes under a new category which focuses on the highest volume and dollar codes billed by physicians across all specialties to determine whether these codes are overvalued.  The entities will review these codes based on the physician’s time, work RVUs and direct PE inputs.
 
These codes have not been reviewed since CY 2006, and based on the most recently available data, have CY 2010 allowed charges of greater than $10 million at the specialty level.
 
CMS has asked that the AMA RUC review at least half of the recommended codes by July 2012. E &M codes were originally slated for review but were removed for the final rule.  

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Telehealth Services Added for 2012
 
The following services have been added to the Telehealth covered services list for 2012. 

• 99406 – Smoking and tobacco use cessation counseling visit; intermediate, greater than 3 minutes up to 10 minutes
• 99407 – Smoking and tobacco use cessation counseling visit; intensive, greater than 10 minutes
• G0436 – Smoking and tobacco cessation counseling visit for the asymptomatic patient, greater than 3 minutes, up to 10 minutes
• G0437 – Smoking and tobacco cessation counseling bisit for the asymptomatic patient; intensive, greater than 10 minutes

 

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• PREVENTIVE SERVICES AND HEALTH RISK ASSESSMENT (HRA)
   
  The rule has finalized the ACA mandate that the HRA must be part of the annual wellness visit (AWV). Although the AWVs were established January 1, 2011, section 4103 of the ACA provided the Secretary additional time to establish guidelines for HRAs. 
   
  An HRA is an evaluation tool designed to provide a systematic approach to obtaining accurate information about the patient’s health status, injury risks, modifiable risk factors, and urgent health needs. 
• The HRA is completed prior to, or as part of, an annual wellness visit and the information from the HRA is reflected in the personalized prevention plan that is created for the individual. The evaluation tool:
  Must collect self-reported information about the beneficiary
• Can be administered independently by the beneficiary or administered by a Health professional prior to or as part of the AWV encounter
• Is appropriately tailored to and takes into account the communication needs of underserved populations, persons with limited English proficiency, and persons with health literacy needs.
• Takes no more than 20 minutes to complete

The HRA and the administration of a personalized prevention plan have been added to the definition of the annual wellness visit codes.
 
The CDC plans to publish a manual that will include additional information applicable for the successful implementation of the HRA including information related to implementation, feedback, and follow-up that evidence suggests is critical for improving health outcomes using this process.
 
As of this time there are no requirements for accreditation or certification of HRA instruments, though one may be considered in the future.
 

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Payment for the AWV  (Annual Wellness Visit) services with the inclusion of an HRA element
 
CMS indicated that the AWV services would be re-evaluated when the HRA component was added to the service.  Currently, the AWV codes are equivalent to a level 4 E/M new or established patient visit codes of 99204 and 99214, which include “preventive assessment.�
 
CMS recognizes that Medicare patients will most likely need assistance from the physician’s office staff in completing the HRA. The CDC estimated that an HRA should take no more than 20 minutes to complete, so the clinical labor time for the initial AWV was increased by half, 10 minutes, to reflect additional staff work across the range of beneficiary capability.  The subsequent AWV would typically be completed by the Medicare beneficiaries and the clinical labor time was increased by 5 minutes.

RVU comparison to 2011 is shown below.

HCPCS	Short Descriptor	CY 2011 RVUs	CY 2012 RVUs
G0438	AWV including PPPS, initial visit	4.74	4.99
G0439	AWV including PPPS, subsequent visit	3.16	3.26
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Tags: SGR and Medicare Fee Schedule