The proposed rule, released as a display copy on July 1, 2009, offers several policy changes and payment rate revisions that will affect approximately one million practitioners paid under the Medicare Physician Fee Schedule (PFS). The Centers for Medicare and Medicaid Services (CMS) estimates a 21.5 percent rate reduction in physician payments for 2010 unless Congress intervenes, as it traditionally has, to mitigate the effects of the Sustainable Growth Rate update formula. Increases are, however, proposed for primary care services furnished by general practitioners, family physicians, internists and geriatric specialists. The proposed rule contains a 2010 conversion factor of $28.3208, reduced from $36.0666.

In a move hailed by the American Medical Association, CMS proposes to remove office-administered Part B drugs from the 2010 PFS calculation by eliminating such drugs from the definition of "physician services." This revision is made in anticipation of fundamental Medicare reform legislation, and CMS does not foresee that the proposal will change the projected update for services during 2010; however, the agency forecasts that it would "reduce the number of years in which physicians are projected to experience a negative update."

Furthermore, CMS proposes to "budget neutrally" eliminate the use of all consultation codes by increasing the work relative value units (RVUs) for new and established office visits, initial hospital and initial nursing facility visits, and incorporating the increased use of these visits into practice expense and malpractice RVU calculations. In its press release, CMS states that the "resulting savings would be redistributed to increase payments for the existing E/M services."

The proposed rule contains two changes to address growth in high-cost imaging services. CMS proposes to change the equipment usage assumption from the current 50 percent usage rate to a 90 percent usage rate for equipment priced over $1 million and to reduce payment for services that require the use of expensive imaging services. Additionally, the proposal addresses the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requirement that suppliers of the technical component of imaging services be accredited through accrediting organizations beginning January 1, 2012. The accreditation requirements would not apply to the physician who interprets the images, but to the facilities that create the images, including mobile units, physician's offices and independent diagnostic testing facilities.

The proposed rule also adds more measures and more measure groups for eligible professionals to report under the Physician Quality Reporting Initiative (PQRI), provides a process for group practices to report quality measures and presents a mechanism for submitting quality measure data from a qualified electronic health record. CMS has released a Fact Sheet summarizing the proposed rule changes to the PQRI.

The proposed rule is slated for publication in the Federal Register on July 13, 2009. Comments must be received by August 31, 2009