Medicare’s PROPOSED Physician Fee Schedule for 2013

On Friday, July 6, 2012, the Centers for Medicare and Medicaid Services (CMS) issued its proposed rule to update the Physician Fee Schedule (PFS), effective January 1, 2013. This proposed rule can be found at or in the Federal Register on July 30, 2012. CMS is accepting public comments until September 4, 2012, and the final rule is anticipated in early November, 2012.

Key “Take-Aways” from reading this 765 page proposed rule:

  • More money for primary care practitioners.
  • Less money for specialists, especially Radiation Oncologists.
  • Proposed 2013 conversion factor = $24.7124 (stated on page 690).
  • Compared to 2012 Conversion Factor = $34.0376.
  • If your medical device is associated with a specific CPT code(s), then you should search this rule and determine if it is on Medicare’s MisValued Watch List.
  • The vast majority of this rule is concerned with numerous quality reporting initiatives, including a “Physician Compare” website for consumers.

Key Health Policy issues:

  • CMS projects a reduction of 27% in Medicare physician fee schedule payment rates under the sustainable growth rate (SGR) methodology. CMS is required by law to include this reduction in its calculations; however, Congress has acted to avert the SGR cut every year since 2003. The proposed 2013 Conversion Factor = $24.7124.
  • In support of the Administration’s emphasis on high quality patient-centered care, family practice physician reimbursement will increase by approximately 7% and other primary care practitioners, such as Nurse Practitioners, will increase between 3% and 5%. This increase is intended to help practitioners coordinate patient care in the 30 days following a facility discharge. To achieve budget neutrality, these increases will come at the expense of specialists.
  • Many specialists will face reimbursement cuts in 2012, including Radiation Therapy Centers (19%), Radiation Oncology (14%); Radiology (4%), Anesthesiology (3%), Cardiology (3%), Interventional Radiology (3%), Vascular Surgery (3%), Pathology (2%), Urology (2%) & Neurosurgery (1%). For additional information by specialty, please see Table 83 on page 680.

Specific issues of interest to medical device sales and marketing professionals:

  • Potentially misvalued codes (page 54): In recent years, CMS and AMA have taken significant steps to address potentially misvalued codes which fall into 7 different categories: Codes & families of codes for which…
    • There has been the fastest growth.
    • Experienced substantial changes in Practice Expenses.
    • Established for new technologies or services.
    • Multiple codes frequently billed together.
    • Codes with low relative values, particularly those billed multiple times for a single treatment.
    • Codes which have not been subject to review since the implementation of the Physician Fee Schedule (aka Harvard-valued codes).
    • Other codes determined to be appropriate by the Secretary.
  • CMS proposed two new categories of potentially misvalued codes for review: “Harvard-valued” CPT codes and services with standalone practice expense procedure times. CMS said there are more than 1,000 potentially misvalued codes, and the agency has completed its review of 450 surgical codes. To determine if a specific CPT code is considered misvalued, simply search the proposed rule for the CPT code of interest and see if it is identified. If it is, then you can assume it has been re-surveyed or will soon be re-surveyed by the appropriate specialty society.
  • IMRT and SBRT have been identified as potentially misvalued. CMS proposes to reduce the procedure time assumptions used in developing RVUs for intensity modulated radiation treatment (IMRT) delivery and stereotactic body radiation therapy (SBRT) delivery. For further information, please read pages 74-82.
  • DME Face-to-Face: To help combat fraud and reduce improper payments in DME items, CMS is proposing to implement a face-to-face requirement as a condition of payment for certain high-cost DME covered items, such as TENS unit, manual wheelchair accessories, oxygen and respiratory equipment, hospital beds and accessories. A face-to-face encounter with a beneficiary, no more than 90 days before prescribing the item or within 30 days after, is proposed. The proposed list of specific covered items is listed in Table 24 on page 263.
  • The vast majority of this proposed rule pertains to numerous quality reporting initiatives, such as the Physician Quality Reporting System (PQRS), the Electronic Prescribing (eRx) Incentive Program, and the Physician Compare tool on the Medicare’s website. If your medical device contributes to sustained patient benefit, then you should consider how to capture improved patient outcomes for the benefit of your physician customers.
  • Physician Quality Reporting System (PQRS): Physicians successfully participating in the PQRS will receive a 0.5 percent bonus on all Medicare payments for 2013. Over CYs 2013 and 2014, CMS proposes to include a total of 264 individual measures.
  • In addition, the Affordable Care Act requires CMS to implement a plan for making information on physician performance publicly available no later than January 1, 2013. This provision supports CMS’s overarching goals of providing consumers with quality of care information to make informed decisions about their health care, while encouraging clinicians to improve the quality of the care they provide to their patients. Medicare’s “Physician Compare” website will provide information on comparable quality and patient experience measures.

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