CMS RELEASES FIVE RULES AFFECTING PROVIDER PAYMENTS

On November 1 and 2, the Centers for Medicare & Medicaid Services (CMS) released a flurry of rules dealing with healthcare provider payments for fiscal year 2013 and other matters. One rule, released on November 1, sets forth changes to the Medicare physician fee schedule. The other two rules released on November 1 address payments under Medicaid and the Medicare hospital outpatient and ambulatory surgical care center payment systems. The two rules released on November 2 address payment rates for home health providers and dialysis facilities, among other things.

The Medicare physician fee schedule rule includes the 26.5% reduction to Medicare payment rates that is required under the Sustainable Growth Rate (SGR) methodology. However, it is anticipated that Congress will override these cuts with a temporary “doc fix” bill as it has done every year since 2003. As we reported last month, physicians’ organizations are urging Congress to implement a permanent replacement for the SGR formula. In a fact sheet about the new rule, CMS stated, “The Administration is committed to fixing the SGR update methodology and ensuring these payment cuts do not take effect. Predictable, fiscally-responsible physician payments are essential for Medicare to sustain quality and lower health care costs over the long-term.”

The fee schedule rule also continues the implementation of the physician value-based payment modifier; outlines the next steps to enhance the Physician Compare website; expands access to services provided by Certified Registered Nurse Anesthetists; allows Medicare to pay for portable x-rays ordered by nurse practitioners, physician assistants and other non-physician practitioners; and requires a face-to-face encounter as a condition of payment for certain durable medical equipment (DME) items. The final rule is scheduled to be published in the Federal Register on November 16, 2012, and comments from the public will be accepted through December 31, 2012. Most provisions of the rule will be effective January 1, 2013, but the DME provisions will be effective July 1, 2013.

The Medicaid rule, which implements a provision of the Patient Protection and Affordable Care Act, raises payments for physicians who provide primary care services to Medicaid patients to a rate that is on par with Medicare. Payments to physicians are expected to increase by $11 billion over the next two years. The Medicaid final rule will be published in the November 6, 2012 Federal Register and will be effective January 1, 2013. CMS issued a fact sheet about the rule.

The hospital outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) rule implements statutory requirements and other changes. Key provisions of this rule include updates and revisions to the Hospital Outpatient Quality Reporting (OQR) Program, the ASC Quality Reporting Program, and the Inpatient Rehabilitation Facility (IRF) Quality Reporting Program. According to CMS, the rule also will increase payments to hospital outpatient departments by 1.8 percent. The final rule will be published in the November 15, 2012. Federal Register and will be effective January 1, 2013. Public comments will be accepted through December 31, 2012. CMS issued a fact sheet about the rule.

The first rule released November 2 includes the Home Health Prospective Payment System Rate Update for Calendar Year 2013, establishes requirements for the Home Health and Hospice quality reporting programs, and establishes requirements and sanctions for surveys of home health agencies. Home health agencies will see little change in reimbursement compared to 2012 payments. According to CMS, the rule “promotes quality of care for patients by ensuring that home health agencies that are out of compliance with Federal health and safety standards, known as the Conditions of Participation, can correct their performance and achieve prompt compliance.” In its fact sheet about the rule, CMS also stated that it “reflects CMS’s ongoing efforts to support Medicare beneficiary access to home health services while fostering greater efficiency, flexibility, payment accuracy and improved quality.”

The last rule of the series sets forth payment rates for 2013 for dialysis facilities that are paid under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) and requirements for the ESRD quality incentive program (QIP). This rule also includes changes to the bad debt reimbursement methodology for all Medicare providers and suppliers, implementing a provision in the Middle Class Tax Extension and Job Creation Act of 2012. CMS issued a fact sheet about the rule.