The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule addressing changes to the physician fee schedule and other Medicare Part B payments for services to be furnished in calendar year (CY) 2012. Pursuant to the statutory formula used to determine the physician payment update imposed by Congress in 1997, payment under the physician fee schedule would be reduced 29.5 percent. As was the case in prior years, however, it is expected that Congress will intervene to prevent the proposed reduction. The proposed rule addresses several payment issues, including the following:

Potentially Misvalued Services

The proposed rule discusses CMS’s progress in identifying and reviewing potentially misvalued codes, a task undertaken annually on a historical basis and required with respect to seven specific categories of codes by PPACA. The categories specified in PPACA include codes with the fastest growth and codes established for new technology.

Multiple Procedure Payment Reduction

The proposed rule also would expand the multiple procedure payment reduction (MPPR) policy, pursuant to which payments are reduced for second and subsequent procedures on the same day, to the professional component of advanced imaging services consisting of CT, MRI and ultrasound tests. The MPPR already applies to the technical component of these tests.  

Additional Covered Services

CMS proposes to add smoking cessation services to the list of covered telehealth services. The rule also addresses the annual wellness exam mandated by PPACA.

Quality Reporting Initiatives

A significant portion of the proposed rule is devoted to physician quality reporting and incentive payment issues. For example, in addressing eligible participants under the Physician Quality Reporting System, one proposal involves the definition of a group practice. The rule proposes to define group practice as a taxpayer identification number (TIN) to which at least 25 eligible professionals have assigned billing rights, a significant increase over the number applicable in the 2011 reporting year, which was only two or more eligible professionals. A process for group practices to participate in the reporting system is also set forth in the proposed rule. Eligible professionals and group practices that participate in the reporting system can qualify for an incentive payment equal to 0.5 percent of the total estimated allowed charges for covered services furnished by the group or professional. The rule also sets forth the proposed 2012 quality measures.

Electronic Prescribing Incentives

The proposed rule addresses payment incentives for electronic prescribers, setting forth the criteria for being a successful electronic prescriber and reporting requirements to participate in the incentive program. Comments to the proposed rule are due by August 30, 2011.