Contained within the 2012 Medicare Physician Fee Schedule (PFS) Final Rule were a plethora of important provisions that will impact providers in various ways. The following article will highlight some of these significant changes that will take effect in 2012.

Conversion factors

Let's start with the conversion factors (CF).  Absent any Congressional action, the calendar year 2012 PFS CF is $24.6712.  For comparison purposes, the 2011 CF is presently $33.9764.  For anesthesia, the calendar year 2012 national average anesthesia CF is $15.5264, down from the 2011 CF that is currently in effect at $21.0515.  Congress will undoubtedly take action to prevent these drastic cuts in the conversion factors.

Expanding the multiple procedure payment reduction

CMS will be applying a multiple procedure payment reduction (MPPR) to the professional component (PC) of advanced imaging services.  In the draft rule, they had proposed a 50% reduction of the second and subsequent advanced imaging services furnished by the same physician to the same patient, in the same session, on the same day.  However, based upon comments provided, they decided to only apply a 25% reduction for CY 2012.

Telehealth consultation changes

Descriptors for the initial inpatient telehealth consultation codes (G0425 - G0427) will be revised to reflect telehealth consultations furnished to emergency department patients in addition to inpatient telehealth consultations effective January 1, 2012.

Three-day payment window policy impact on wholly-owned/operated physician practices

All diagnostic services furnished by wholly hospital-owned/operated physician practices three days prior to inpatient admission which are related to the admission must be included on the hospital claim.  A new Medicare HCPCS modifier -PD will be available to wholly hospital-owned or operated entities beginning January 1, 2012 and may be appended to Part B claims lines to identify preadmission services that are subject to the three-day window policy. 

However, formal implementation of the -PD modifier for use by wholly hospital-owned/operated entities will not occur until July 1, 2012 in order to provide sufficient time to coordinate their billing practices for clinically related nondiagnostic preadmission services.  The -PD modifier will signal claims processing systems to provide payment only for the professional component for CPT/HCPCS codes with a TC/PC split at the facility rate when they are provided in the three-day (or, in the case of non-IPPS hospitals, one-day) payment window. 

Therapy services -outpatient therapy caps for CY 2012

CMS applies an annual, per beneficiary combined cap on expenses incurred for outpatient physical therapy and speech language pathology services under Medicare Part B.  A separate but identical cap also applies for outpatient occupational therapy services.  The caps apply to expenses incurred for therapy furnished in outpatient settings, other than in an outpatient hospital setting.  The 2012 calendar year cap amount is $1,880.

Clinical laboratory fee schedule: Signature on requisition

CMS is retracting the policy that was finalized in the 2011 PFS rule which required a physician's or non-physician practitioner's (NPP) signature on a requisition for clinical diagnostic laboratory tests paid under the clinical laboratory fee schedule (CLFS).  Therefore, the signature of the physician or NPP is not required on a requisition for a clinical diagnostic laboratory test paid under the CLFS for Medicare purposes.  Treating practitioners are required to document the ordering of tests and orders must be signed.  Medical necessity for ordering the test must also be evident in the medical record.
Annual wellness visits

Administration of a health risk assessment (HRA) will be a required element of the annual wellness visits effective January 1, 2012.  The relative value units for the initial and subsequent annual wellness visits will be adjusted upward slightly.

Physician compare Website

CMS will continue development of the physician compare Internet Website with information on physicians and other eligible professionals enrolled in the Medicare program.  Public reporting of performance results for standardized quality measures already existing on www.medicare.gov include:

• Hospitals (Hospital compare)
• Dialysis facilities (Dialysis facility compare)
• Nursing homes (Nursing home compare)
• Home health facilities (Home health compare)

The first phase of the physician compare Internet website was launched on December 30, 2010.  This initial phase included the posting of the names of eligible professionals that satisfactorily submitted quality data for the 2009 physician quality reporting system.  Plans for other information to be reported on the physician compare Website include:

• Measures collected under the physician quality reporting system
• An assessment of patient health outcomes and functional status of patients
• An assessment of the continuity and coordination of care and care transitions, including episodes of care and risk-adjusted resource use
• An assessment of efficiency
• An assessment of patient experience and patient, caregiver, and family engagement
• An assessment of the safety, effectiveness, and timeliness of care
• Other information as determined appropriate by the secretary

Establishment of the value-based payment modifier and improvements to the physician feedback program

Discussion about the establishment of a value-based payment modifier to be implemented in 2015 continues in this final rule.  The purpose of the value based modifier is to "establish a payment modifier that provides for differential payment to a physician or a group of physicians" under the physician fee schedule "based upon the quality of care furnished compared to cost ... during a performance period."  The provision requires that "such payment modifier be separate from the geographic adjustment factors" established for the physician fee schedule.  Of course, the value modifier must be implemented in a budget-neutral manner which means that payments will increase for some physicians but decrease for others; however the aggregate amount of Medicare spending in any given year for physicians' services will not change as a result of application of the value modifier.

CMS intends to align physician quality programs -- the physician quality reporting system, the electronic health record (EHR) incentive program, the value modifier, and the physician feedback program to increase the quality of care for Medicare beneficiaries.  In doing so, CMS states the goals are to not increase physician reporting burdens, and to provide fair and meaningful information to physicians on ways to improve the quality of care they furnish.

Since these are just a few of the topics in this year's MPFS Final Rule, professionals billing the Medicare Part B program would be well advised to at least look through the table of contents for more in depth discussion on these matters as well as to find information on other topics that are relevant to their practice.

Peggy Blue, MPH, CPC, CCS-P, regulatory specialist at HCPro, Inc., the lead instructor for the Medicare Boot Camp®- Professional Services version and an instructor for the Certified Coder Boot Camp® and Certified Coder Boot Camp® Online. Prior to joining HCPro, she oversaw the development, implementation, dissemination, and reporting of information related to Medicare professional services training efforts for Highmark Medicare Services. In that capacity, she has researched, resolved, and responded to issues and inquiries from the physician community in addition to congressional offices, medical societies, and professional associations. Blue has delivered multiple presentations on Medicare legislation. Visit www.hcprobootcamps.com for more information.