2011 MPFS Proposed Rule

Highlights of the 2011 Medicare Physician Fee Schedule
Proposed Rule

New Act Provides Physician Payment Update

Also on June 25, U.S. President Barack Obama signed into law the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010. This legislation replaced the 21.3 percent reduction in physician payment rates that was required by the Sustainable Growth Rate (SGR) formula for CY 2010 with a 2.2 percent payment increase for services furnished on or after June 1, 2010 through November 30, 2010. The convertion factor for services provided during this time period is $36.8729.

On June 25, 2010, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule that would implement a number of key provisions in the Patient Protection and Affordable Health Care Act (PPACA) of 2010. These provisions include the expansion of preventive services for Medicare beneficiaries, improvement of payments for primary care services, and promotion of access to health care services in rural areas.

The proposed rule would also update other policies and payment rates for physician services and other providers and suppliers paid under the Medicare Physician Fee Schedule (PFS) during calendar year (CY) 2011, and make a number of significant changes in the Physician Quality Reporting Initiative (PQRI) — learn more about these proposed PQRI changes.

The proposed rule is now on display at the Office of the Federal Register’s Public Inspection Desk and will be published in the Federal Register on July 13, 2010. In the interim, it is available as a PDF download on the Federal Register website.

CMS will accept comments on the proposed rule until August 24, 2010, and will respond to them in a final rule to be issued on or about November 1, 2010. Except as otherwise specified, the payment policies and rates adopted in the final rule will be effective for services furnished on or after January 1, 2011.

The Society’s Health Policy Staff will continue to review the proposed rule and provisions of the PPACA to determine any further impact upon cardiac rhythm services. Please e-mail Isabelle LeBlanc, Legislative Coordinator, if you have any questions.

Highlights of the Proposed Rule

The proposed rule projects an across-the-board -6.1 percent reduction to PFS in 2011 under the SGR formula unless Congress takes legislative action to avert the cut. The current estimate of the CY 2011 Conversion Factor is $26.6574 adjusted by the proposed Medicare Economic Index (MEI) rebasing and rescaling factor.
CY 2011 is the second year of the 4-year transition of the Practice Expense (PE) RVUs, using a 50/50 blend of the AMA Physician Practice Information Survey (PPIS) data implemented in CY2010 and previous PE RVUs from the Socioeconomic Monitoring System (SMS) and supplemental survey data.
CMS projects the combined impact based on total allowed charge estimates for RVU, Multiple Procedure Payment Reduction (MPPR), and Medicare Economic Index (MEI) changes will reflect a -2 percent decrease during the four-year transition period for PE RVUs. These impacts do not include the effect of the proposed -6.1 percent CY 2011 PFS update.

Specialty: Cardiology

Allowed Charges (mil$)	Impact of Work\ and MP RVU Changes	Impact of PE RVU and MPPR Changes		Impact of MEI Rebasing	Combined Impact
		Full	Tran		Full	Tran
$6,801	0%	-5%	-2%	0%	-5%	-2%

CMS is proposing to correct the PE database inputs for the 24-hour Holter and 30 day event monitoring device codes (93224, 93225, 93226, 93230, 93231, 93232, 93268, 93270 and 93271) so that the inputs for the professional component (PC) and the technical component (TC) codes reflect the appropriate sum of the global codes.
CMS is also proposing to correct the database monitor equipment time for Holter codes 93225, 93226 and 93224. Currently, the database shows 42 minutes of equipment time for 93225. However, the equipment time should reflect 24 hours (or 1440 minutes) of continuous monitoring. The current equipment time for CPT code 93226 is 1440 minutes. Because this code does not represent 24 hours of device use, the number of minutes should parallel the intra-service clinical labor input time, which is 52 minutes. The direct PE inputs for the global CPT code 93224 would then be appropriately summed to reflect the 1492 total minutes of time included in CPT codes 93225 and 93226.
CMS continues to have concerns about developing PE RVUs for remote monitoring services 93012, 93229, 93268 and 93271 that are utilized 24 hours a day, 7 days a week. While the agency is not proposing any methodological or direct cost input changes for these services, it is seeking comment on various proposed alternative approaches to establish PE RVUs for these services. CMS is proposing to continue contractor-pricing for CPT 93229 for CY 2011.
CMS is also seeking public comments on the perspectives of physicians and non-physician practitioners regarding new payment policies adopted in CY 2010. Specifically, implementation of the PPIS data used to develop specialty-specific PE/HR for PE RVUs and the elimination of consultation codes except for telehealth services.
CMS is inviting further comment regarding MedPACs suggestion that the agency consider alternative methods for collecting specialty-specific cost data or options to decrease the reliance on such data. In the CY 2010 final rule with comment, CMS solicited public feedback on this issue.
For CY 2011, CMS is proposing new Geographic Practice Cost Indices (GPCIs) for each Medicare locality. Section 3102(a) of the PPACA extends the 1.0 work GPCI five floor for services furnished through December 31, 2010. In addition, the PPACA establishes a 1.0 PE GPCI floor for services furnished in frontier states effective January 1, 2011. The 1.5 work GPCI floor in Alaska will remain in place for CY 2011. The updated GPCIs would be phased in over a 2-year period.
CMS is proposing to rebase and revise the Medicare Economic Index (MEI) and incorporate it into the CY 2011 PFS update by removing all costs related to drug expenses, and expenses associated with separately billable supplies. CMS is also proposing to revise the cost categories in the MEI by expanding the Office Expense category into nine detailed categories with additional price proxies associated with these categories. The MEI is used in conjunction with the SGR formula to update the PFS and represents the price component of that update.
CMS is also soliciting comments on high-cost supplies in the direct PE databases for CY 2011 and how to refine the process for regularly updating prices for high-cost supplies paid under the PFS.
CMS is proposing administrative changes to simplify the Refinement Panel Process in an effort to continue to provide stakeholders with a meaningful opportunity for review and discussion of interim work RVUs. The proposed changes would eliminate the use of the F-test and instead base revised RVUs on the median work value of the panel members’ ratings. In addition, CMS would have the final authority to set the RVUs, and therefore, make adjustments to the work RVUs resulting from refinement if policy concerns warrant their modification.
CMS is proposing that subsequent hospital care services, specifically CPT codes 99231, 99232, and 99233, be added to the list of telehealth services on a Category 1 basis for CY 2011, but with limitations on the frequency that these services may be furnished. Consulting practitioners should continue to use the inpatient telehealth consultation HCPCS G-codes, specifically G0406, G0407, G0408, G0425, G0426, or G0427 when reporting consultations furnished to inpatients via telehealth.
CMS is proposing to assign a 75 percent equipment utilization rate assumption to expensive CT and MRI scanners and expand the list of services to which the higher equipment utilization rate assumption applies to other diagnostic imaging services that utilize similar expensive scanners. If implemented, the change in the equipment utilization rate assumption would take effect on January 1, 2011 and would not be budget neutral under the PFS. The equipment utilization rate assumption remains at 50 percent for all other equipment included in the PFS PE methodology.
CMS is proposing to simplify the current imaging Multiple Procedure Payment Reduction (MPPR) policy in a way that is consistent with the standard PFS MPPR policy for surgical procedures that does not group procedures by body region. The proposed MPPR would apply a 50 percent reduction to CT and CTA, MRI, MRA and ultrasound procedures services furnished to the same patient in the same session, regardless of the imaging modality, and would not be limited to contiguous body areas.
CMS is also proposing to expand the MPPR policy to therapy services.

Provisions of the Patient Protection and Affordable Care Act of 2010 (PPACA)

Potentially Mis-Valued Services

Section 3134 of the PPACA directed the Secretary to specifically examine Potentially Misvalued Services in seven categories:

Codes and families of codes for which there has been the fastest growth
Codes or families of codes that have experienced substantial changes in practice expenses
Codes that are recently established for new technologies or services
Multiple codes that are frequently billed in conjunction with furnishing a single service
Codes with low relative values, particularly those that are often billed multiple times for a single treatment
Codes which have not been subject to review since the implementation of the RBRVS (the so-called ’Harvard-valued codes’)
Other codes determined to be appropriate by the Secretary

The PPACA specifies that the Secretary may use existing processes to receive recommendations on the review and appropriate adjustment of potentially misvalued services. In addition, the Secretary may conduct surveys, other data collection activities, studies, or other analyses as the Secretary determines to be appropriate to facilitate the review and appropriate adjustment of potentially misvalued services.

This section also authorizes the use of analytic contractors to identify and analyze potentially misvalued codes, conduct surveys or collect data, and make recommendations on the review and appropriate adjustment of potentially misvalued services.

The Secretary may also make appropriate coding revisions (including using existing processes for consideration of coding changes) which may include consolidation of individual services into bundled codes for payment under the physician fee schedule.

The PPACA further specifies that the Secretary shall establish a formal process to validate relative value units under the PFS. The validation process may include validation of work elements (such as time, mental effort and professional judgment, technical skill and physical effort, and stress due to risk) involved with furnishing a service and may include validation of the pre, post, and intra-service components of work. The Secretary is directed to validate a sampling of the work RVUs of codes identified through any of the seven categories of potentially misvalued codes specified above.

Furthermore, the Secretary may conduct the validation using methods similar to those used to review potentially misvalued codes, including conducting surveys, other data collection activities, studies, or other analyses as the Secretary determines to be appropriate to facilitate the validation of RVUs of services. CMS plans to continue analyzing Medicare claims data over future years to identify additional services that exhibit rapid growth and high Medicare expenditures for referral to the AMA RUC for review as potentially misvalued codes.

For CY 2011, CMS has identified additional categories of Potentially Misvalued Services and are referring certain codes to the RUC for review. Specifically, codes with low work RVUs but have high volume based on claims data, and codes used as reference services for valuing other services termed "multi-specialty points of comparison" services.

CMS will also continue to review RUC recommendations for revised work RVUs and/or direct PE inputs for codes that fall into these categories, and will establish a more extensive validation process of RVUs in the future in accordance with the requirements of the PPACA.

CMS is soliciting public comments on possible approaches and methodologies for consideration in the validation process. The agency has expressed a particular interest in comments regarding use of time and motion studies to validate estimates of physician time and intensity that are factored into the work RVUs for services with rapid growth in Medicare expenditures. The validation process will be discussed in a future PFS rule after input from stakeholders has been considered.

Other Provisions

CMS is seeking input on two provisions contained in the PPACA relevant to the Physician Resource Use Measurement & Reporting (RUR) Program:

(1) Section 3003 which continues the confidential feedback program and requires the Secretary, beginning in 2012, to provide reports that compare patterns of resource use of individual physicians to other physicians.
(2) Section 3007 requires the Secretary to apply a separate, budget-neutral payment modifier to the Fee-For-Service PFS payment formula. The payment modifier will be phased in beginning January 1, 2015 through January 1, 2017.
For Phase II of the RUR, CMS is proposing to discontinue use of commercially-available proprietary episode grouping software. Section 3003 of the PPACA requires that the Secretary develop a Medicare-specific episode grouper by January 1, 2012. Until a Medicare-specific episode grouping software is developed, CMS plans to produce reports for Phase II that contain per capita cost information.
More specifically, instead of episode-specific cost information, CMS intends to provide overall per capita cost information, as well as per capita cost information for those beneficiaries with five common chronic diseases:
1. diabetes
2. congestive heart failure
3. coronary artery disease
4. chronic obstructive pulmonary disease
5. prostate cancer
CMS is proposing not to include data from PQRI in the RUR reports. Instead, for Phase II, CMS proposes use of claims-based measures developed by CMS in the Generating Medicare Physician Quality Performance Measurement Results (GEM) project in future phases of the program. CMS intends to explore the possibility of linking this program to the HITECH incentive program for meaningful use of electronic health records, and the group practice reporting option in PQRI. CMS is also proposing to distribute reports electronically in Phase II.
In addition to developing an episode grouper by January 1, 2012, CMS is required to publish the cost and quality measures the agency intends to use in determining the payment modifier to be effective on January 1, 2012.
CMS is also required to begin implementing the program parameters through rulemaking in 2013. The payment modifier is effective on January 1, 2015, with a phased implementation so that all physicians paid under the PFS will be subject to the modifier by January 1, 2017.
On or after January 1, 2017, CMS will have the authority to also apply the payment modifier to other eligible professionals.
In anticipation of implementing sections 3003 and 3007 of the PPACA, CMS intends to seek stakeholder input in the areas of
1. risk adjustment
2. attribution
3. benchmarking and peer groups
4. cost and quality measures compositing methods
Other provisions of the PPACA would provide Medicare coverage, with no coinsurance or deductible, for an annual wellness visit, and would waive the deductible and coinsurance requirements for most preventive services and expand access to primary care services and general surgery.
Section 6003 of the PPACA established a new disclosure requirement related to the in-office ancillary services exception to the physician self-referral prohibition. Specifically, the statute requires that, with respect to MRI, CT and PET the referring physician must inform the patient in writing at the time of the referral that the patient may obtain the same imaging services from another supplier.
In addition, the statute requires physicians to provide a written list of other suppliers who furnish the same imaging services in the area in which the patient resides.For CY2011, CMS proposes that the written notice shall include a list of at least 10 other suppliers who provide the services for which the individual is being referred and which are located within a 25-mile radius of the referring physician’s office location.
CMS also proposes that the notice should be written in a manner sufficient to be reasonably understood by all patients and should include for each supplier on the list, at a minimum, the supplier’s name, address, telephone number, and distance from the referring physician’s office location. A record of the disclosure notification, signed by the patient, shall be maintained as a part of the patient’s medical record. CMS believes their proposal minimizes the administrative burden for physician by requiring the development of only one list of alternative suppliers for each office location, rather than multiple lists targeting the various areas in which the physician’s patients reside.
Under the new law, claims for services furnished on or after January 1, 2010, must be filed within 1 calendar year after the date of service. In addition, Section 6404 of the PPACA provides that claims for services furnished before January 1, 2010, must be filed no later than December 31, 2010. The proposed rule would create two new exceptions to the 1- year filing deadline.

As noted, the Society’s Health Policy Staff will continue to review the proposed rule and provisions of the PPACA to determine any further impact upon cardiac rhythm services.