CMS Issues Proposed 2011 Medicare Physician Fee Schedule

The Centers for Medicare and Medicaid Services (CMS) on June 25 released its proposed 2011 Medicare Physician Fee Schedule, which includes both payment and payment policy proposals for all physician services. Overall, the rule does not include any egregious policy proposals on the scale of those included in the 2010 rule. However, while there were some positives, cardiovascular professionals will continue to feel the downstream impacts of policies that were finalized in the 2010 rule. As in past years, increases and cuts for cardiovascular services are dependent on the services provided by the practice. The following is a high-level overview of provisions in the rule effecting cardiology:

Practice Expense: CMS estimates the aggregate impact on cardiology to be negative 2 percent as a result of the second year phase-in of the cuts associated with the AMA Physician Practice Information Survey (PPIS). This was an expected reduction and there are no other provisions with major negative effects.

Nuclear Imaging: In the 2010 Medicare Physician Fee Schedule, CMS substantially reduced the payment for myocardial perfusion imaging by reducing both the physician work value and the practice expense value. To make matters worse, because there was a new code for the service, CMS did not apply the four-year transition of the practice expense cuts and instead used the fully implemented value. In the proposed 2011 rule, CMS did not respond to requests from the ACC or members of Congress to phase-in the cuts over four years, so the proposed RVU is nearly identical to that for this year.

Practice Expense and Malpractice RVUs: CMS has proposed some changes to the technical underpinnings of the RVUs, including reallocating the shares of total physician fee schedule payments for each of the RVU components -- physician work, practice expense, and malpractice expense. Under the proposal, all practice expense and malpractice RVUs would be adjusted slightly upward to reflect data showing that practice expenses and malpractice expenses have grown relative to physician earnings. Since the entire payment pool must remain budget neutral, this would require a downward adjustment to work RVUs, but CMS proposes instead a small decrease to the conversion factor in order to maintain stable work RVUs. CMS projects that the effect of the reallocation will be neutral for overall cardiology payments. The ACC will be examining this proposal and its impact on individual cardiology services closely.

Equipment utilization: The Affordable Care Act (ACA) requires that CMS establish the equipment utilization rate for CT, MR and PET at 75 percent. CMS had previously set the equipment utilization rate for this equipment at 90 percent, phasing in reduced payments over four years. This may result in minor changes to payment rates for cardiac CT and MR services.

Stark changes: The ACA requires that physician practices furnishing PET, CT or MRI under the in-office ancillary services exception to the physician self-referral (Stark) law provide a notice to patients referred for such services of their ability to obtain those services elsewhere. The notice must include a list of other sources of the services. Under the law, CMS also has the discretion to include other radiology services. The good news is that CMS is not interested in expanding this provision to services beyond the three explicitly mentioned in the statute. In addition, despite the provision's statutory effective date of Jan. 1, 2010, CMS has determined that it cannot be effective without a regulation. Thus, the notice and disclosure requirement will not go into effect until the final Medicare physician fee schedule is implemented in January 2011 and will not apply to services furnished at any point during 2010. This eliminates concerns that the regulations would somehow be made retroactive to services furnished as early as January 2010.

SGR: The proposed rule includes CMS's estimate of the 2011 conversion factor based on current law and does not reflect the six-month patch signed into law in late June. Congress will have to act again to prevent next year's SGR-based cut, currently estimated at 6 percent on top of the 21.5 percent cut that must be averted before December 1.

There is a 60-day public comment period before the final rule is released in November. The College, as always, will submit detailed comments and meet with CMS staff as needed. Stay tuned to The Advocate, CardioSource.org and Cardiology for more information. For questions, please contact advocacydiv@acc.org.