If current law stands, physician fees will be cut by 27% in 2012, not the 29% originally projected, according to the final payment rule issued Nov. 1 by the Centers for Medicare and Medicaid Services.
The slight decrease is due to lower-than-expected Medicare cost growth, CMS officials said in a statement. Unless Congress steps in, the reduction will go into effect Jan. 1 as mandated by Medicare’s Sustainable Growth Rate (SGR) formula.
Both President Obama, in his budget, and CMS officials have called for an overhaul of the SGR. The agency repeated that call with the issuing of the fee rule.
"This payment rate cut would have dire consequences that should not be allowed to happen," CMS Administrator Donald Berwick said in a statement. "We need a permanent SGR fix to solve this problem once and for all."
"Almost every year for more than a decade, doctors have faced this annual threat and the Congress has in turn acted to temporarily prevent these deep reductions from taking effect," Kathleen Sebelius, Health and Human Services secretary, said in a statement. "We have not and will not let deep cuts to doctors’ payments occur. The Obama administration is 100% committed to fixing the flawed Medicare payment system and protecting Medicare beneficiaries’ access to doctors."
The American Medical Association also urged Congress – yet again – to fix the SGR. "The Joint Select Committee on Deficit Reduction must include repeal of the formula in [its] recommendation to Congress to protect access to care for seniors and stabilize the Medicare program," AMA President Peter W. Carmel said in a statement. Dr. Carmel added that physician payments are so low that "there is a 20% gap between Medicare payment updates and the cost of caring for seniors."
Under the final rule, Medicare will issue some $80 billion in payments next year, according to CMS estimates.
In addition to addressing physicians’ fees, the final rule includes many cost-cutting and efficiency-oriented provisions. For instance, the CMS is expanding its look at codes that may be overvalued. Previously, the agency focused on high-cost codes in cardiology and radiology. In 2012, it will take a broader look, focusing on codes in each specialty that lead to the highest Medicare expenses.
The goal is to rebalance payments so that primary care is not undervalued, according to the final rule.
The agency is also taking a knife to payments for imaging services by going after multiple images taken of the same patient at the same practice on the same day. The CMS had proposed a 50% cut in the professional component; the final rule makes a 25% reduction.
The final rule made several changes to the electronic health records incentive program and also to the Physician Quality Reporting System (PQRS). For EHRs, physicians now have the option to submit data through several different portals, not just one established by the CMS. The agency also more closely aligned the PQRS requirements with the meaningful use requirements under the EHR Incentive Program.
The rule also establishes measures to be used in the future to pay physicians for higher quality and more efficient care. Payment adjustments will begin in 2015 and be applied to all physicians by 2017.
Under the rule, the so-called "value-based modifier" will use the PQRS core set (which focuses on cardiovascular conditions) and the core, alternative core, and additional EHR Incentive Program measures (which focus on several chronic conditions and preventive measures). Payments to group practices will be based on the core set of the Group Practice Reporting Option measures and measures of preventable hospital admissions for heart failure and chronic obstructive pulmonary disease.
The cost measures will be both total per capita cost and per capita cost for selected conditions including chronic obstructive pulmonary disease, heart failure, coronary artery disease, and diabetes.
The final rule will be published in the Federal Register Nov. 28.
For provisions that are open to comment, the CMS will accept comments until Jan. 3, 2012, and then respond in the 2013 fee rule.