Web Exclusive: CMS releases 2011 proposed Medicare physician schedule

By Sheila Madhani, assistant director of health policy

On June 25, 2010, the Centers for Medicare and Medicaid Services (CMS) announced proposed changes to Medicare policies and payment rates for physician services to go into effect January 1, 2011. Under the proposed rule, CMS projects a negative 6.1 percent reduction to physician payment rates in 2011 due to the application of the Sustainable Growth Rate formula. Negative updates have been expected every year since 2002, although congressional action has averted payment reductions since 2003. Congressional action will be needed again to avoid a payment reduction in 2011.
 
MEI rebasing
CMS is proposing to rebase and revise the Medicare Economic Index (MEI), which represents the changes in the cost of inputs used to produce physician services each year. Rebasing refers to moving the base year for the structure of costs of an input price index, while revising relates to other types of changes such as changing data sources, cost categories or price proxies used in the input price index. The current base year for the MEI is 2000, which means that the cost weights in the index reflect physicians’ expenses in 2000. CMS proposes to rebase the MEI to 2006.

Practice expense
Calendar year 2011 is the second year of a four-year transition to new practice expense data. Practice expense represents the resources used in furnishing supplies, office rent/lease, equipment and personnel wages (excluding malpractice expense) when providing physician services.

PQRI
The recently passed health reform legislation authorized PQRI incentive payments through 2014. A 1 percent incentive payment was authorized for 2011. For 2011, CMS has lowered the threshold to achieve satisfactory reporting and be eligible for an incentive payment from 80 percent to 50 percent when measures are reported through the claims process. The 80 percent threshold still applies when measures are reported through registries or an electronic health record.

Implementation of health reform provisions
In addition to payment policy and payment rate updates, the regulations include a number of provisions from the recently passed health reform legislation, the Affordable Care Act (ACA), including:

• Section 3002: Improvements to the Physician Quality Reporting System.
• Section 3003: Improvements to the Physician Feedback Program.
• Section 3007: Value-based Payment Modifier under the Physician Fee Schedule.
• Section 3102: Extension of the Work Geographic Index Floor and Revisions to the Practice Expense Geographic Adjustment under the Medicare Physician Fee Schedule, and Protections for Frontier States as amended by Section 10324.
• Section 6003: Disclosure Requirements for In-Office Ancillary Services Exception to the Prohibition on Physician Self-Referral for Certain Imaging Services
• Section 6404: Maximum Period for Submission of Medicare Claims Reduced to Not More than 12 Months.

ASTRO will be submitting comments on the proposed rule by the August 24, 2010, deadline. A copy of the copy of the regulations is available on the CMS website.

While an impact chart estimating the impact of all proposed changes by specialty was included in the rule, ASTRO was informed that there were errors in the chart so at this time we cannot provide an estimate on the impact of the proposed changes on radiation oncology. A more in-depth and complete summary of the rule will be posted on the ASTRO website in the next few weeks.