The Centers for Medicare & Medicaid Services (CMS) released a proposed rule on July 1, 2009 that would revise the Medicare Physician Fee Schedule (MFPS) for calendar year (CY) 2010. The proposed rule will be published in the Federal Register on July 13, 2009. During the interim, it is available on the CMS website (PDF, 2.25M) as well as on the website of the Office of the Federal Register website.

The agency will accept public comments on the proposed rule until August 31, 2009, and anticipates issuing a final rule by November 1, 2009. The Heart Rhythm Society’s Health Policy staff will continue to review the rulemaking and will develop a more detailed summary of the proposed changes in the coming weeks to determine the impact upon cardiac rhythm services.

Highlights of the Proposed Rule

• CMS is proposing to remove the costs of physician-administered drugs from the Sustainable Growth Rate (SGR) formula retroactive to the 1996/1997 base year so that past year increases in drug spending will not have an affect on the determination of future fee schedule rates. While removing physician-administered drugs from the allowed and actual expenditures for all prior years, the adjustment will not change the projected -21.5 percent payment rate cut for services furnished on or after January 1, 2010.
• The estimated annual update to the MFPS for CY 2010 is -21.5 percent. This means an across the board cut in reimbursement rates under the fee schedule, unless Congress takes legislative action to avert the cut. The Conversion Factor (CF) for CY 2010 is $28.3208, down from $36.0666 this year.
• CMS estimates that total Medicare payments to cardiologists under the fee schedule in CY 2010 will decrease by 11 percent (excluding the projected 21.5 percent negative update). Of this decrease, 10 percent is due to the estimated changes in Practice Expense Relative Value Units (RVU) for cardiology services; the remaining 1 percent is due to changes in Malpractice RVUs.
• CMS is proposing to use data from the American Medical Association (AMA) Physician Practice Information Survey in place of the AMA’s SMS survey data and supplemental survey data that is currently used in the Practice Expense methodology for cardiology services. This data shows a substantial drop in practice expense per hour for cardiology services.
• CMS is proposing to revise Malpractice RVUs using specialty-specific malpractice premium data because they represent the actual malpractice expense to the physician. The proposed methodology, however, would result in zero malpractice RVUs for codes with no physician work.
• CMS is also proposing to discontinue payment for Consultation codes, which are typically billed by specialists and are paid at a higher rate than equivalent Evaluation and Management (E&M) services. Consultation services would instead by reported with existing E&M service codes. CMS intends to redistribute the resulting savings to existing E&M services.
• CMS is in agreement with the AMA's Relative Value Update Commitee (RUC) recommendations for the direct Practice Expense inputs for Microvolt t-wave assessment (93025) and is proposing to adopt them for CY 2010.
• The proposed rule contains a number of provisions to the Electronic Prescribing Incentive Program and the Physician Quality Reporting Initiative (PQRI). Eligible professionals or group practices that meet the requirements of each program in CY 2010 will be eligible for incentive payments for each program equal to 2.0 percent of total estimated allowed charges for the reporting period.
• CMS will conclude the four year transition period for calculating Practice Expense RVUs. In CY 2010, the PE RVUs will be calculated based entirely on the current methodology.
• CMS is proposing to change the equipment usage assumption from the current 50 percent usage rate to a 90 percent usage rate for equipment priced over $1 million, but are not proposing a change in the usage rate for less expensive equipment at this time.
• The 1.000 work GPCI floor, extended by section 134(a) of the MIPPA, will expire effective January 1, 2010. CMS is not proposing any changes in the Physician Fee Schedule locality structure at this time.
• CMS is continuing to examine alternatives ways to identify Potentially Misvalued Services under the physician fee schedule, specifically high cost supplies and services often billed together, and will propose a revised process in future rulemaking.
• CMS is proposing to not allow an additional E/M service to be billed for care furnished during the post procedure period furnished for an outpatient service requiring less than a 24-hour hospital stay.
• CMS is proposing to require the technical component suppliers of advanced imaging services (computed tomography, magnetic resonance imaging, nuclear medicine and positron emission tomography) to be accredited beginning January 1, 2012.
• CMS is soliciting comments on the idea of a group of experts separate from the AMA RUC, to help the agency improve the review of relative values. CMS is seeking further public comment on the development of the plan for transition to a Value-Based Purchasing program for physicians and other practitioners to report to Congress, specifically issues of appropriate level of accountability and appropriate data submission mechanisms.

As noted, the Society’s Health Policy staff will continue to review the rulemaking and will furnish more details of the proposed changes as needed to determine the impact upon cardiac rhythm services.