2008 Medicare Physician Fee Schedule

The Centers for Medicare and Medicaid Services (CMS) issued its final rule for the 2008 Medicare Physician Fee Schedule (MPFS) on November 1, 2007 with a 60 day comment period ending on December 31, 2007. The final rule was published in the Federal Register on November 27, 2007 and is effective for services rendered on or after January 1, 2008. Please be advised that pending Medicare legislation could impact certain provisions of the final rule, particularly the physician payment rate and the Physician Quality Reporting Initiative (PQRI).

Highlights of the MPFS Final Rule

Under the new rule, CMS estimates that it will pay approximately $58.9 billion to about 900,000 physicians and other health care professionals during calendar year (CY) 2008.

Sustainable Growth Rate: The physician fee schedule update for CY 2008 is
-10.1%, slightly higher than the -9.9% estimated in the proposed rule. The Conversion Factor (CF) for CY 2008 is $34.0682, down from $ 37.8975 this year.
Recalls and Replacement Devices: CMS does not intend to “penalize” physicians who provide care for patients affected by implantable device recalls. Rather, it is their intention to ensure that costs of additional physicians’ services and diagnostic tests associated with recalled devices are recognized and appropriately addressed. CMS will take into consideration the concerns and suggestions of the medical community as they develop a plan to address this issue.
Equipment Usage: CMS will maintain the assumptions of a 50% equipment utilization rate and an 11% equipment interest rate in the calculation of the practice expense (PE) RVUs, and will continue to monitor the appropriateness of these assumptions and evaluate whether changes should be proposed in light of the data currently available.
Remote Cardiac Event Monitoring: CMS believes it would be valuable for stakeholders with a vested interest in remote cardiac event monitoring services to work together to reach consensus on recommendations before they establish further direct PE inputs for services represented by CPT codes 93012, 93225, 93226, 93231, 93232, 93270, 93271, 93733, and 93736.
Budget Neutrality Adjustment: CMS will finalize their proposal to apply the budget neutrality (BN) adjustment to work RVUs. The work adjustor for CY 2008 will be 0.8806. >
Modifier -51 Exempt List: CMS agrees with the CPT Editorial Panel’s recommendations for removal of certain codes from the exemption list (Appendix E in CPT). The modifier 51 exempt symbol “” has been omitted from EP study codes 93619, 93620, 93624, 93640, 93641, 93642 and 93660, and ablation procedures 93650, 93651 and 93652 in the 2008 edition of CPT.
Physician Quality Reporting Initiative (PQRI): CMS will continue to allow physicians to report quality measures on a voluntary basis. Structural measures such as registries must meet five criteria in the final rule and self-nominate by January 4, 2008 in order to be selected for validation testing in 2008. The Physician Assistance and Quality Initiative Fund will provide $1.35 billion for physician payment and quality improvement initiatives for services furnished in 2008.

The following table demonstrates the combined CY 2008 total allowed charge impact for cardiology services as a result of the remaining 5-Year Review of Work RVUs and Practice Expense Changes, OPPS Imaging Cap, and the CY 2008 Update.

Specialty: Cardiology

Allowed Charges

Impact of Work and PE RVU Changes

Impact of DRA 5102

Combined Impact RVU and DRA 5102

CY 08 Update

Combined Impact with CY 08 Update

$7,519

-2%

-10%

-12%

Find national payment rates for heart rhythm services and procedures here. Please be advised that these rates do not reflect the 0.5% update for CY 2008 approved by Congress on December 19, 2007. Learn more about the MPFS Final Rule.

2008 Physician Quality Reporting Initiative

The final rule also includes provisions for the 2008 Physician Quality Reporting Initiative (PQRI), as authorized under the Tax Relief and Health Care Act of 2006 (TRHCA). To view the list of measures, see the 2008 PQRI Measure Specifications. Policies used by CMS in selecting measures for inclusion in the 2008 PQRI are detailed with discussion of consensus organizations and consensus-based processes.

Measures, Eligibility and Participation Requirements

The 2008 PQRI will be structured in a similar manner to the 2007 PQRI with regard to:

Eligible professionals: all professionals who are paid under the Medicare physician fee schedule.
Submission of measures: claims-based data submission only.
Standards for satisfactory reporting: report a minimum of three quality measures on at least 80% of the cases for which that quality measure is reportable (same as 2007 PQRI).
Type and unit of analysis: individual reporting by a physician with a National Provider Identifier (NPI) (same as 2007 PQRI).
Changes to measures: 2008 PQRI expanded to include 119 quality measures; but, there are no new quality measures applicable to electrophysiologists for 2008 PQRI. The same four cardiology measures and the two perioperative care measures in 2007 PQRI apply; however, CMS provides release notes that details the new changes for each quality measure made from the 2007 PQRI specifications.

For information on 2007 PQRI, see the HRS Washington Report (June 20, 2007). Differences between the 2008 PQRI and 2007 PQRI include:

Structural Measures: Electrophysiologists who have adopted or use structural measures can participate in 2008 PQRI: (1) Measure #124 (PDF, 1.43M) — Adoption/Use of Health Information Technology (Electronic Health Records), and (2) Measure #125 (PDF, 1.43M)— Adoption/Use of E-Prescribing.
Reporting period: one calendar year (Jan.1–Dec. 31, 2008).
Bonus payment calculation: The 2008 bonus payment percentage will likely be between 1.5% and 2.0% (for 2007 it is 1.5%). It will continue to represent a percentage of total allowed charges for covered Medicare services, subject to a cap. The exact percentage will not be determined until the close of the reporting period.
Feedback reports: Unlike 2007, CMS plans to provide interim feedback reports in 2008. Interim feedback reports will not be available until after the 2007 final feedback reports are published in April, 2008. Feedback may include participation rates by specialty/profession, associated trends in clinical performance, and beneficiary outcomes. Information will be made available in the aggregate (e.g., state, specialty, or profession) and not by the individual professional, practice or billing unit. CMS will not publish any individually identifiable data without participants’ voluntary consent for either the 2007 or 2008 PQRI.

Feasibility Testing for Registry-based Reporting and Electronic Health Record Reporting

For 2008 PQRI, participants who participate in a registry-reporting mechanism or electronic health record reporting will not qualify for a 2008 bonus payment. Similar to 2007 PQRI, claims-based reporting will remain the only way to qualify for 2008 bonus payments. CMS recognizes the potential value of a registry-based reporting mechanism as well as an electronic health record-based reporting mechanism. But, CMS does not find it feasible or practical to implement such mechanisms at the present time.

Registries interested in participating in feasibility testing will be selected based on self-nomination (i.e., letters must be sent to CMS by January 4, 2008). CMS will select registries for testing based on technical capability, inclusion of key minimum data elements, and the level of complexity and effort required for testing. Information on the results of feasibility testing will eventually be published on the PQRI website.

Each registry must maintain compliance with all applicable statutory and regulatory requirements related to processing, storing, and transmitting the data, including:

Submission of data to the CMS clinical data warehouse, using a CMS-specified record layout based on the 2008 quality measures’ specifications.
Compliance with system interoperability standards recognized by the Secretary of Health & Human Services (HHS).
Ability to separate and report information for Medicare beneficiaries only.
Use of at least 1 PQRI quality measure that is selected for 2008 inclusion.
A validation process for their data.

In 2008, CMS will partner with several self-nominated Electronic Health Record vendors to explore the feasibility of EHR submission. In response to concerns about physicians losing control of patient records, CMS noted that it would not attempt to upload entire medical records into the data warehouse or directly mine data from the practice’s medical records database. Instead, data submission will require an affirmative action on the part of the physician to submit the data to the CMS data warehouse. More information on electronic health record reporting can be found here.

2008 OPPS Final Rule

In addition to the fee schedule final rule, CMS also issued a separate final rule with comment period updating the hospital Outpatient Prospective Payment System (OPPS), for services furnished on or after January 1, 2008. The OPPS final rule also finalizes the 2008 payment rates for the revised ambulatory surgical center (ASC) payment system. This rule was also published in the Federal Register on November 27, 2007.

HIGHLIGHTS OF THE OPPS FINAL RULE

CMS projects that payments under the OPPS will increase by about 10% to approximately $36 billion in CY 2008 from $32.7 billion in CY 2007. CMS also estimates that hospitals will receive an overall average increase of 3.8 percent in Medicare payments for outpatient services in CY 2008.
Composite APC: In the final rule, CMS implemented a composite APC (8000), which will provide a single bundled payment ($8543.00) for several electrophysiologic evaluation and ablation procedures.
Intraopertive Services: CMS adopted its proposal to package payment for certain ancillary services including image processing and intra-operative services (93609, 93613, 93621, 93622, 93623, 93631, 93640, 93641 and 93662), and imaging supervision & interpretation services (71090, 75820 and 75827).
Partial Device Credits: Certain device-dependent APC groups will be reduced in cases in which the hospital receives a partial credit of 50% or more from the manufacturer toward the cost of a replacement device implanted in a procedure. This parallels Medicare’s inpatient hospital policy and extends the current OPPS payment reduction policy when a hospital replaces an implantable device without cost.
Discontinued G-Codes: CMS finalized their proposal without modification to delete HCPCS codes (G0297, G0298, G0299, and G0300) for ICD insertion procedures and require hospitals to bill the appropriate CPT codes for ICD insertion, specifically CPT codes 33240 for G0297/G0298, and 33249 for G0299/G0300 along with the applicable device C-codes.
Quality Reporting Requirements: In CY 2008, CMS is requiring that hospitals report seven consensus quality measures, including five emergency department acute myocardial infarction transfer measures and two surgical care improvement measures as a condition to receive a full market basket update in CY 2009.

Learn more about the OPPS Final Rule.