CMS Seeks Comments on a 2010 Physician Fee Schedule that Proposes A -21.5 Percent Rate Reduction

The Centers for Medicare & Medicaid Services (CMS) is requesting a -21.5 percent rate reduction in payments next year to the 1 million physicians and non-physicians paid under the Medicare Physician Fee Schedule (MPFS).

CMS is required to adjust the MPFS payment rates annually based on an update formula that applies the sustainable growth rate (SRG) adopted in the Balanced Budget Act of 1997. This formula has yielded negative updates since 2002, although CMS averted a reduction in 2003 and Congress prevented reductions from 2004 to 2009, the agency stated in a press release.

The CMS proposals increase payment rates for primary care services and update the practice expense component of physician fees. The Federal Register notice includes a CMS request to determine fees based on data about physicians’ practice costs derived from a new survey. The Physician Practice Information Survey (PPIS) is designed and conducted by the American Medical Association.

The proposed rule proposes refinements to: resource-based work; practice expense and malpractice relative value units (RVUs); geographic practice cost indices (GPCIs); telehealth services; several coding issues; the physician fee schedule update for 2010; payment for covered part B outpatient drugs and biologicals; the competitive acquisition program (CAP); payment for renal dialysis services; the chiropractic services demonstration; comprehensive outpatient rehabilitation facilities; physician self-referral; the ambulance fee schedule; the clinical laboratory fee schedule; and durable medical equipment, prosthetics, orthotics and supplies.

In addition, the agency has proposed that Medicare stop paying for consultations typically billed by specialists at a higher rate than equivalent evaluation and management (E/M) services. Instead, providers would employ existing E/M service codes when providing these services, with the savings used to increase payments for existing E/M services. Additional information on the proposed fee and coding changes can be found at www.cms.gov.