Yesterday CMS released the Medicare Physician Fee Schedule Final Rule for CY 2012, along with a press release and fact sheet summarizing key issues, which include:

  • imposition of a 27.4% payment reduction based on the Sustainable Growth Rate (SGR), absent subsequent action by Congress (which it has taken every year but one since the SGR formula was adopted in the Balanced Budget Act of 1997);
  • implementation of quality and cost measures to be used in establishing a value-based modifier that would result in adjusted payments as of January 1, 2015 (for certain groups, with full implementation as of  January 1, 2017), to reward the efficient delivery of high-quality care, as required by the Affordable Care Act;
  • formal withdrawal of the previously finalized – but never implemented – rule requiring a physician signature on a requisition for services paid under the Medicare Clinical Laboratory Fee Schedule;
  • revision of the regulation allowing clinical laboratories, under certain conditions, to bill hospitals for the technical component of surgical pathology services (known as the “TC grandfather” provision) to reflect expiration as of January 1, 2012, absent Congressional action (which has occurred every year since 2001); and
  • announcement that the new CPT codes for molecular pathology services cannot be used in CY 2012 for Medicare billing purposes.

What is more notable than what is in this Final Rule is what is not in this Final Rule.  CMS once again declined to make changes to the in-office ancillary services exception to the Stark Law or to the regulation permitting ordering physicians and others, in certain circumstances, to mark up the price of certain services they order when billing the Medicare program for those services.  According to the American Clinical Laboratory Association, abusive self-referral arrangements have exploded since CMS relaxed the regulation in 2009, and many in the laboratory industry have vigorously lobbied CMS to tighten both regulations to prevent abusive self-referral arrangements.   Although the HHS OIG has taken steps to curtail such arrangements (as detailed in one of my recent posts), CMS has thus far declined to do so.