CMS finalizes 2011 Medicare physician fee schedule

Financial incentives for surgical services in underserved areas and for primary care are outlined. An SGR-driven 25% pay cut remains in the background.

By Chris Silva — Posted Nov. 15, 2010

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Payments for primary care services and certain surgical procedures will improve under the Centers for Medicare & Medicaid Services final 2011 physician fee schedule issued Nov. 2. Patients also will receive new wellness benefits and lower co-pays.

However, the rule calls for Medicare physician payments to be slashed by 25% -- 23% on Dec. 1 and 2% on Jan. 1, 2011. These payment cuts could be avoided if Congress intervenes, as it has since 2002 and is expected to do so again.

The American Medical Association and others in organized medicine have voiced their support for a permanent fix to the sustainable growth rate formula, which is part of the system to determine Medicare payments. CMS officials also believe a new system is vital to the long-term sustainability of the program. Whether lawmakers agree is yet to be seen.

"Broad physician participation for Medicare is essential to ensuring that beneficiaries continue to have access to care, and physician engagement is critical to our efforts to strengthen the quality of care," said CMS Administrator Donald M. Berwick, MD. "Medicare needs to be a strong, dependable partner with physicians -- and that means the SGR must be fixed. The [Obama] administration supports permanently reforming the Medicare payment formula."

Since 1992, Medicare has paid for services of physicians and other suppliers according to the Medicare Physician Fee Schedule, under which the relative value unit system determines pay for individual services.

The final 2011 fee schedule implements provisions called for under the Patient Protection and Affordable Care Act that CMS says expands beneficiary access to preventive services. The rule provides coverage under the traditional fee-for-service program for an annual wellness visit beginning Jan. 1, 2011. During this yearly visit, doctors will be able to more easily update a patient's care plan; screen for impairments; measure height, weight and blood pressure; and adjust for other tests based on the person's medical and family histories.

Medicare will cover certain preventive services that no longer will require out-of-pocket patient payment, including screening mammographies and colonoscopies. Medical industry experts approve of the new benefits for Medicare patients provided under the health reform law.

"To have preventive services available at no cost to people with Medicare is not only an improvement to the Medicare program, but also encourages both providers and patients to think about health care in a new way," said Joe Baker, president of the Medicare Rights Center, a nonprofit consumer organization based in New York City. "By encouraging people to take steps to prevent illness, the law promotes efficient, higher-quality, patient-centered care."

Primary care incentives

CMS' final 2011 physician fee schedule provides a 10% incentive payment for primary care services. Family physicians, general internists, geriatricians, pediatricians, nurse practitioners, clinical nurse specialists and physician assistants for whom primary care services represent 60% or more of their Medicare physician fee schedule-allowed charges in a prior period are eligible for the payment.

"The fee schedule launches an important investment in our primary care system and reinforces the primary care infrastructure that will support a high-performing and efficient health care system," said Roland Goertz, MD, president of the American Academy of Family Physicians. "Research consistently shows that such a system yields both improved outcomes for patients and cost efficiencies for everyone."

Dr. Goertz said the final 2011 fee schedule rule was changed so that 80% of family physicians would be eligible for incentive payments, up from about 60% in the proposed rule, which CMS released in June.

The rule includes a provision that allows physician assistants to order post-hospital extended care services in skilled nursing facilities and another provision to pay the same Medicare rates to certified nurse-midwives as physicians.

Addressing surgeon shortages

The health reform law calls for a payment incentive program to improve access to major surgical procedures that are furnished by physicians in Health Professional Shortage Areas between Jan. 1, 2011, and Dec. 31, 2016. To be eligible for the 10% incentive payment, the physician must be enrolled in Medicare as a general surgeon and be based in a ZIP code in a CMS-designated professional shortage area.

The agency is using the same list it has employed under the existing shortage area bonus program, something the American College of Surgeons would like to see fixed.

"The areas that are designated now are for primary care and mental health, so they might not actually be general surgeon shortage areas," said Bob Jasak, ACS director for regulatory and quality affairs. "We appreciate CMS implementing the incentive provision, but we'll continue working with them to create a specific geographic designation for general surgeon shortage areas."

The health reform law requires CMS to identify and make adjustments to relative values for multiple services that are frequently billed together. As a result, the agency finalized a policy to reduce by 50% payments for the second and subsequent studies billed by a physician for a patient who uses ultrasound, CT or MRI imaging services on a single date of service.

In a statement, the American College of Radiology said it was "very disappointed" that CMS finalized this policy. If a patient has two imaging studies done on the same day, "it in no way justifies a 50% reduction," the statement said.

The final rule will appear in the Nov. 29 Federal Register. CMS said it will accept comments on certain aspects of the rule until Jan. 3, 2011.

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What beneficiaries will pay in 2011

Medicare beneficiary premiums will increase for Medicare fee-for-service Part B in 2011. However, the majority of Medicare beneficiaries will pay the same $96.40 premium they have paid since 2008. Part A premiums (for inpatient hospital visits, skilled nursing facilities and some home health care) will decrease, although 99% of Medicare beneficiaries don't pay any premium for Part A.

Part A Part B
Monthly premium 2011 $450.00 $115.40
Change from 2010 -$11.00 $4.90
Deductible (60 days in hospital) $1,132.00
Change from 2010 $32.00

Source: Centers for Medicare & Medicaid Services

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External links

"Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2011," Centers for Medicare & Medicaid Services (link)

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