The Centers for Medicare & Medicaid Services (CMS) has proposed changes to policies and payment rates for services to be furnished during fiscal year (FY) 2010 by over 1 million physicians and non-physician practitioners who are paid under the Medicare Physician Fee Schedule (MPFS). The MPFS sets payment rates for more than 7,000 types of services in physician offices, hospitals and other settings.

CMS is making several proposals to refine Medicare payments to physicians, which are expected to increase payment rates for primary care services. The proposals include an update to the practice expense component of physician fees, and CMS has proposed to include data about physicians' practice costs from a new survey (the Physician Practice Information Survey) designed by the American Medical Association. CMS is also proposing to stop making payment for consultation codes, which are typically billed by specialists and are paid at a higher rate than equivalent evaluation and management (E/M) services. Practitioners will now be required to use existing E/M service codes when providing these services.

Other proposals include: i) increasing the payment rates for the Initial Preventive Physical Exam; ii) refining how Medicare recognizes the cost of professional liability insurance in its payment system; iii) implementing provisions in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), which added new Medicare benefit categories for cardiac and pulmonary rehabilitation services, and for chronic kidney disease education; iv) reducing payment for services that require the use of expensive equipment, which would produce a redistribution of the resulting savings to increase payments for other services, including primary care services; and v) implementing a requirement in MIPPA that suppliers of the technical component of advanced imaging services be accredited beginning January 1, 2012, by designated accrediting organizations.

The proposed rule contains a number of provisions to promote improvement in quality of care and patient outcomes through revisions to the Electronic Prescribing Incentive Program (e-Prescribing Program) and the Physician Quality Reporting Initiative. CMS will accept comments on the proposed rule until August 31, and will respond to all comments in a final rule to be issued by November 1, 2009. To download the full report, click here.