On November 1, 2007, CMS released a pre-publication version of the 2008 Physician Fee Schedule. The Fee Schedule updates Medicare payment rates for hospital outpatient and ambulatory surgery centers for calendar year 2008. CMS stated in a press release that under the 2008 Physician Fee Schedule it estimates that it will pay approximately $58.9 billion to about 900,000 physicians and other health care professionals. The actual physician fee schedule update for CY 2008 is -10.1% (negative 10.1 percent), about which the press release notes “CMS has no choice but to implement this negative update because it is mandated by a statutory formula.”

The 2008 Physician Fee Schedule includes the following general materials:

1. Final Rules Related to the Physician Fee Schedule 

These include rules on the various following issues: (a) refinements to resource-based practice expense RVUs; (b) geographic practice cost indices (GPCI) changes; (c) malpractice RVUs; (d) requests for additions to the list of telehealth services; (e) several coding issues including additional codes from the 5-Year Review; (f) payment for covered outpatient drugs and biologicals; (g) the competitive acquisition program (CAP); (h) clinical lab fee schedule issues; (i) payment for renal dialysis services; (j) performance standards for independent diagnostic testing facilities; (k) expiration of the physician scarcity area (PSA) bonus payment; (l) conforming and clarifying changes for comprehensive outpatient rehabilitation facilities (CORFs); (m) a process for updating the drug compendia; (n) physician self-referral issues; (o) beneficiary signature for ambulance transport services; (p) durable medical equipment (DME) update; (q) the chiropractic services demonstration; a Medicare economic index (MEI) data change; (r) technical corrections; (s) standards and requirements related to therapy services under Medicare Parts A and B; (t) revisions to the ambulance fee schedule; (u) the CMS-1385-FC ambulance inflation factor for CY 2008; and (v) amending the e-prescribing exemption for computer-generated facsimile transmissions.

2. Revisions to the Payment Policies of Ambulance Services under the Fee Schedule for Ambulance Services and the Ambulatory Inflation Factor Update for CY 2007

3. Refinement of RVUs for CY 2008 and Response to Public Comments on Interim RVUs for 2007

4. Physician Self-Referral Prohibition: Annual Update to the List of CPT/HCPCS Codes

5. Physician Fee Schedule Update for CY 2008

6. Allowed Expenditures for Physicians’ Services and the Sustainable Growth Rate

7. Anesthesia and Physician Fee Schedule Conversion Factors for CY 2008

8. Telehealth Originating Site Facility Fee Payment Amount Update

Particularly noteworthy is that none of the proposed physician self-referral (e.g., Stark) revisions were finalized except the anti-markup provisions. These proposed Stark revisions had become known in the industry as “Stark 2.5” and a description of the proposed changes is available in our previous Client Bulletin on the subject. One proposed change would have greatly affected the use of “under arrangements” and this revision was not finalized. In the Physician Fee Schedule CMS stated that it intends to “finalize revisions to the physician self-referral regulations without the need for new proposals and additional public comment” on the under arrangements and other remaining issues. Thus, another round of Stark law changes appear imminent.

The final rules will be published in the Federal Register on November 27, 2007. With minor exceptions, the Physician Fee Schedule and final rules contained therein are effective January 1, 2008. In the form released by CMS, the 2008 Physician Fee Schedule is 1,481 pages long. Bricker & Eckler LLP may provide additional E-Mail Alerts and/or Client Bulletins on issues contained within the Physician Fee Schedule in the future.