US Oncology Government Relations Action Alert

CMS Releases Proposed Rule for 2013 Medicare Physician Fee Schedule 

On July 6, 2012 CMS posted the Proposed Rule for the 2013 Medicare Physician Fee Schedule (MC-PFS).  The official notice will be published in the Federal Register on July 30th and will remain open for comment until September 4th.  Once again, it is important to recognize that, absent congressional action, payments for all services to Medicare patients will be reduced by 27% in 2013 due to the operation of the Sustainable Growth Rate (SGR) formula.

Key changes in payment policy outlined in the Proposed Rule include:

  • A Conversion Factor (CF) of $24.8441 (current CF is $34.0376).
  • Increasing payments by 7% for family practice physicians and between 3-5 % for other practitioners providing primary care services through the establishment of a new care management procedure code.  Because of the MC-PFS requirement for budget neutrality, this change comes at the expense of payment reductions for other procedure codes.
  • Reducing procedure time assumptions used to develop the Practice Expense (PE) RVUs for intensity modulated radiation treatment (IMRT, CPT 77418) from 60 minutes to 30 and for stereotactic body radiation therapy delivery (SBRT, CPT 77373) from 90 minutes to 60.
  • Targeting of CPT codes for other forms of radiation therapy delivery that are PE only codes for RUC review of procedure time assumptions and potential adjustment as misvalued codes in 2014.
  • Reducing the interest rate assumptions used to establish payments for practice expenses – a change that has its largest impact on procedures such as advanced imaging and radiation therapy that are highly dependent on expensive capital equipment.
  • Providing an exception to the existing rules requiring payment at 103% of AMP in lieu of 106% of ASP in certain instances when ASP exceeds AMP by 5% if a particular drug and dosage form have been designated as a shortage item.
  • Removing the current prohibition against complex prepayment medical reviews of claims filed by physicians who have failed to reduce their individual error rates.
  • Requesting comment on whether the provision of molecular pathology services involves sufficient physician work to justify payment under the MC-PFS instead of the Clinical Laboratory Fee Schedule.

Excluding the 27% reduction of the CF, CMS estimates that total allowable charges for services furnished by rheumatologists and gastroenterologists will not decrease in 2013 but payments to medical oncologists and dermatologists will be reduced by 1% and those for diagnostic imaging services will be 4% lower.  The impact of the proposed rule on radiation oncology is projected to be a payment cut of 15%, with entities having a specialty code of radiation therapy center in the Medicare physician/supplier enrollment file experiencing an even more dramatic 19% reduction.  

Practices will again receive 0.5% payment bonuses for successful participation in the Physician Quality Reporting System (PQRS) program in 2013.  Key changes to the PQRS, the Electronic Prescribing (eRx) Incentive Program, and the PQRS-Medicare Electronic Health Record (EHR) Pilot in the proposed rule are aimed at expanding the measures available for reporting and further easing the reporting burden.  These changes include:

  • Adding a number of new measures focused on oncology.
  • Aligning criteria for PQRS reporting using EHRs with those for meeting the clinical quality measures (CQMs) component of meaningful use under the EHR Incentive Program.
  • Decreasing the minimum threshold of patients on which eligible professionals are required to report using measures groups via registry from 30 to 20 under PQRS.  
  • Defining satisfactory PQRS reporting for 2015 as reporting 1 PQRS measure or measures group.
  • Expanding the definition of group practice to include groups of 2-24 eligible professionals for purposes of PQRS reporting under the Group Practice Reporting Option (GPRO) and for being a successful electronic prescriber using the eRx GPRO.
  • Continuing the use of the attestation method and the PQRS-Medicare EHR Pilot for reporting CQMs established last year only for 2012.

The proposed rule continues CMS’ implementation of value-based purchasing.  For practices with 25 or more eligible professionals, 2013 will be the base year for assessing payments under the value modifiers that will be applicable in 2015.  Implementation of value-based purchasing will begin later for smaller groups and solo practitioners.

  • The value-based modifier for practices that satisfactorily report under PQRS will be set at 0.0 unless the group elects to have its modifier calculated using a quality tiering approach.
  • Under quality tiering, a practice would earn an upward payment adjustment of 2% for high-quality, low-cost performance, a downward adjustment of minus 1% for low-quality, high-cost performance, and smaller adjustments either upward or downward for other quality/cost combinations.
  • Practices will receive Physician Feedback reports based on 2012 data that preview their modifier prior to the deadline for electing the quality-tiering approach.
  • The value-based modifier for practices that fail to satisfactorily report under PQRS will be set at minus 1.0%. This reduction will be in addition to the 1.5% reduction that will apply in 2015 to all eligible professionals who fail to satisfactorily report under PQRS.

The US Oncology Network will submit comments on the 2013 Medicare Physician Fee Schedule proposed rule by September 4, 2012.  The final rule is expected on November 1st and will become effective January 1, 2013.


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