Physician Pay Cuts, Incentives and Fines Among CMS Proposed Rule Changes

The Centers for Medicare & Medicaid Services (CMS) unveiled its annual proposed update to the Medicare Physician Fee Schedule, including rules that implement provisions of the Patient Protection and Affordable Care Act and the Affordable Care Act.

A number of physician pay policies and rates will be affecting under the proposed rules, including Medicare reimbursement cuts, electronic prescription fines and incentives, outpatient rehabilitation, diagnostic imaging and telehealth.

The update was published in the Federal Register on July 13 and CMS will be accepting comments on the proposed 2011 update until Aug. 24. (A final rule will be issued on or about Nov. 1, and will become effective on Jan. 1.)

A few of the proposed rule changes include:

• Medicare Pay Cut: The proposal projects a 6.1 percent cut in physician payment rates next year, under the sustainable growth rate (SGR) formula.

• Coverage of Wellness Visits: Currently, the rule pays for a one-time initial preventive physical examination. Under the Affordable Care Act, Medicare coverage is expanded under Part B to include an annual wellness visit.

• Electronic Prescription Carrots and Sticks: An incentive payment equal to 1 percent of the total estimated Medicare Part B physician fee schedule allowed charges will be offered for successful implementation of electronic prescription program in 2011 and 2012 (the incentive drops to 0.5 percent in 2013). Beginning 2012, however, physicians or group practices that have not implemented successful electronic prescription programs for that year will see Medicare Part B physician fee schedule allowed charges cut by 1 percent, 1.5 percent for 2013 and 2.0 percent for 2014.

• Primary Care/Rural Surgery Incentives: Payments will be made equal to 10 percent of a primary care practitioner’s allowed charges for specified primary care services under Part B. The rule change also provides for a 10 percent increase in payment for major surgical procedures performed in areas where there physician shortages.

You can learn more about these proposed changes -- and a slew of other proposals that will affect billing and payment -- from this white paper available on our HCPLive.com network.