On November 1, the Centers for Medicare & Medicaid Services (CMS) released the final rule updating Medicare payment policies and rates for physicians. The Medicare Physician Fee Schedule (MPFS) final rule with comment period implements the Sustainable Growth Rate (SGR) provisions that were adopted in the Balanced Budget Act of 1997. Based on the SGR formula, Medicare payment rates to providers paid under the MPFS will be reduced by 27.4% for services in 2012.
In addition, CMS is expanding the potentially misvalued code initiative. CMS will focus on the codes billed by physicians in each specialty that result in the highest Medicare expenditures under the MPFS to determine whether these codes are overvalued. In the past, CMS targeted specific codes for review that may have affected a few procedural specialties, such as cardiology and radiology, but had not reviewed the highest expenditure codes across all specialties.
The rule also implements a multiple procedure payment reduction to the professional component of advanced imaging services. The reduction will be 25% for CY 2012 rather than the 50% reduction that was proposed. CMS also is moving forward its three-day policy window payment provisions, which will pay physicians services at the lower facility rate if they are delivered in a physician office wholly owned and operated by a hospital and provided within three days of a hospital admission.
CMS is also making changes in how it adjusts payment for geographic variation in practice expense. In addition, the final rule implements the third year of a 4-year transition to new practice expense relative value units.
The final rule was published in the November 28, 2011 Federal Register and will be implemented on January 1, 2011. CMS will accept comments on certain aspects of the final rule until January 3, 2011.
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