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CMS Releases Proposed Changes to the Physician Fee Schedule for 2011

Final Rule Expected November 1

The Centers for Medicare and Medicaid Services (CMS) posted the 
2011 Physician Fee Schedule proposed rule on Friday, June 25.

Among the numerous items in the over 1,200 page document, CMS proposes to:

  • rebase work and practice expense Relative Value Units (RVUs) in a way that advantages specialties that have high practice expense, like radiation oncology.
  • implement the following PPACA provisions:
    • requiring physicians who own diagnostic imaging equipment to notify patients of their ownership interest and inform them of other providers of those services in the area; and
    • expanding the current 50% multiple procedure payment reduction policy (MPPR) to include additional combinations of imaging with occupational and physical therapy services.
  • make changes to the Average Sales price (ASP) methodology used to reimburse office-administered drugs, including proposals:
    • to set carry-over ASP values when manufactureres do not submit ASP data or submit incomplete data;
    • to prohibit physicians from using and billing Medicare for intentional overfill in single-dose vials; and
    • to create a structure for substitution of rates based on 103% of AMP when ASP exceeds AMP by 5% or more.

CMS estimates the mandatory reduction to Medicare physician payments under the current Sustainable Growth Rate (SGR) formula at 27.4% for 2011. It is expected that the Congress will act to avert these cuts when the current cliff arrives on December 1, 2010.

2011 represents the second year of the 4-year phase-in of practice expense value changes announced by CMS last year and implemented beginning this year. The work versus practice expense shift for 2011 appears to nearly offset all of the radiation oncology cut finalized last year to be phased in through 2013, and partially offsets the medical oncology reductions over the same period.

In the Proposed Rule, CMS estimates the following specialty impacts for 2011:

  • -1% for hematology/oncology
  • +2% for radiation oncology

In the Proposed Rule, CMS now estimates that the cumulative impact of 4-year phase-in of practice expense changes combined with the new proposals for 2011 will result in the following in 2013:

  • -4 for medical oncology (previous estimate from the 2010 Final Rule was -6%)
  • -1% for radiation onoclogy (previous estimate from the 2010 Final Rule was -5%)

US Oncology will submit comments on this proposal by the August 24 deadline. The 2011 Final Rule is expected on or around November 1 and will be effective January 1, 2011.

To read CMS' Press Release on the Proposed Rule,
click here

To read CMS Issued Fact Sheets with additional details,
click here

The proposed rule is available 
here or here. 



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