Health Law MonitorCMS issued the 2011 Medicare Physician Fee Schedule final rule, which cuts physician reimbursement by 24.9% between November 2010 and January 2011. Additionally, CMS recently released its 2011 Outpatient Prospective Payment System final rule setting forth several changes to physician supervision requirements for hospital outpatient services to take effect on January 1, 2011.
Physician Fee Schedule Final Rule
The Centers for Medicare and Medicaid Services (“CMS”) announced the final 2011 Medicare Physician Fee Schedule final rule (the “Fee Schedule Rule”) to be published in the November 29 Federal Register with an effective date of January 1, 2011, unless otherwise stated. Under the Fee Schedule Rule, physician payment rates will be reduced on December 1, when a congressionally mandated increase expires, and again on January 1, 2011, under current law, which is based on the sustainable growth rate formula. These two reductions will amount to a 24.9% cut according to the Fee Schedule Rule.
In June, President Obama signed into law the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, which delayed a scheduled 21% reduction in the physician fee schedule rates until November 30, 2010. The American Medical Association is urging Congress to stop the cut for at least an additional 13 months.
The Fee Schedule Rule also implements changes required under the Patient Protection and Affordable Care Act, as amended by the Health Care and education Reconciliation Act (collectively “PPACA”). Effective January 1, 2011, PPACA mandates the waiver of Medicare Part B deductibles and 20% coinsurance that would otherwise apply to most preventative services. Additionally, the Fee Schedule Rule implements incentive payments equal to 10% of a primary care provider’s allowed charges for primary care services under Medicare Part B and incentive payments equal to 10% of the fee schedule payment for surgical services furnished in health professional shortage areas.
Additionally, physicians referring CT, MRI, and PET services under the in-office ancillary services exception to the Stark Law’s physician self-referral prohibition are required to provide patients with a list of at least five alternative suppliers who offer the same services within a 25-mile radius of the physician’s office.
Outpatient Prospective Payment System Final Rule
The Outpatient Prospective Payment System (“OPPS”) final rule (“OPPS Rule”) changes the definition of “direct supervision” for on-campus hospital outpatient departments and off-campus provider-based departments. The definition requires immediate physician availability, meaning that the physician must be physically present, interruptible, and able to furnish assistance and direction during the procedure. The definition does not require that the physician be present on the hospital’s campus. So long as the physician remains physically available, interruptible, and can provide assistance upon notice, the direct supervision requirement will be met. Additionally, physicians providing direct supervision in off-campus provider-based departments will no longer need to remain within the four walls of that department to comply with the new definition of direct supervision. This change provides hospitals with flexibility in this area and will become effective January 1, 2011. The OPPS Rule also stated that CMS will not enforce the direct supervision requirement for therapeutic services furnished in critical access hospitals and certain rural hospitals during 2010 and 2011.
The OPPS Rule also established “non-surgical extended duration therapeutic services,” a new category of 16 services which require direct physician supervision during the services’ “initiation period.” The initiation period is “the beginning portion of the non-surgical extended duration therapeutic service which ends when the patient is stable and the supervising physician believes the remainder of the service can be delivered safely under general supervision without the physician’s presence on the hospital campus or in the off-campus provider based department of the hospital.” CMS announced that it is considering using the CMS’ Federal Advisory Panel on Ambulatory Classification Groups (APC Panel) as the independent technical committee that would review requests for consideration of supervision levels and make recommendations to CMS regarding the appropriate levels.
Finally, the CPT Editorial Panel is revising its guidance for critical care codes 99291 and 99292 to specifically state that, for hospital reporting purposes, critical care codes do not include the specified ancillary services. Beginning in 2011, hospitals will be able to separately report ancillary services provided in conjunction with critical care. These ancillary services include, but are not limited to, electrocardiograms, chest X-rays, and pulse oximetry. Although hospitals can report these services separately, they will not receive separate payment for the ancillary services. CMS has included the costs for ancillary services in the critical care APC payment rate based on historical claims data where the cost of these services was included. CMS is requesting comments on this issue so hospitals should consider providing feedback about how CMS should handle the revision of the CY 2011 critical care codes, specifically with respect to separate payment for the services.
Both the Fee Schedule Rule and the OPPS Rule discussed in this article will have sweeping effects on the medical community. Hospitals and physicians need to be aware of these changes, some of which will take effect almost immediately.
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Posted by: Air Jordan | 03/12/2011 at 03:19 AM