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Focus on Regulation

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Center for Medicare and Medicaid ServicesCMS released three proposed rules addressing Medicare payment changes for calendar year (CY) 2013 for physicians, hospital outpatient departments and ambulatory surgical centers and home health agencies on Friday, July 6, 2012. The proposed rules will be published in the Federal Register on July 30, 2012, and comments for all three proposed rules are due to CMS by September 4, 2012.

Physician Fee Schedule Proposed Rule

CMS projects a 27% reduction in payment rates under the Medicare Physician Fee Schedule (MPFS) for CY 2013 due to the Sustainable Growth Rate methodology, unless Congress acts to prevent these cuts. Congress has done so every year since CY 2002, but CMS is legally required to include the reduction in its calculations in this proposed rule. 

CMS proposes to increase payments to family physicians by roughly 7%, due mostly to the creation of a new code to pay community physicians or practitioners to coordinate a patient’s care for the 30 days following discharge This proposal is part of an effort to promote high-quality, patient-centered care by reimbursing services that facilitate a patient’s transition back into the community after being discharged from a hospital or nursing home. 

Meanwhile, specialists will see reductions in payment, in part to assure the budget neutrality of the proposed rule. Radiation oncologists can expect the most significant reduction – 14% of total allowed charges compared to 2012. About half of this reduction is due to reassessment of the procedure time assumptions used in developing relative value units for two radiation therapy services.

CMS also proposes expanding the Multiple Procedure Payment Reduction Policy to the technical component of certain cardiovascular and ophthalmology services, reimbursing the highest paid service in full, and reducing the reimbursement paid for additional services by 25%.  CMS also would implement a proposal, discussed in the 2012 final rule, to apply the reduction to professional and technical components of advanced imaging services provided in the same session on the same day by physicians in the same group practice.

The proposed rule seeks to reduce the burden and complexity of quality reporting by aligning reporting requirements across programs.  CMS proposes changes to the Physician Quality Reporting System and the Electronic Prescribing Incentive Program, both of which are tied to the MPFS. The agency also proposes changes to the Medicare Electronic Health Records Incentive Pilot Program, and describes the next phase for the Physician Compare Website.  Finally, the proposed rule proposes to phase-in a Value-Based Payment Modifier for physician services.

Outpatient Prospective Payment System (OPPS) Proposed Rule

Under this proposed rule, Medicare’s payment rates for hospital outpatient services would increase 2.1% overall.  CMS also proposes a 1.3% increase in the payment rate to ambulatory surgical centers (ASCs). CMS expects CY 2013 payments to hospitals under the OPPS to be approximately $48.1 billion and payments to ASCs to be roughly $4.1 billion.

The proposed rule includes several modifications to the quality reporting programs for hospital outpatient departments and ASCs. These include procedural requirements relating to the use of measures, and, for ASCs, a methodology for applying a 2% payment reduction when the quality program’s reporting requirements are not met. No new measures are proposed for either quality program.

CMS also proposes to reimburse hospitals for the acquisition and pharmacy overhead costs of separately payable drugs and biologicals at the statutory default of average sales price (ASP) plus 6 percent, the same rate that applies to drugs with pass-through status. 

Home Health Program Proposed Rule

Lastly, the Home Health Prospective Payment System proposed rule updates the prospective payment rates for CY 2013, using the methodology described in last year’s final rule. The proposed rule would reduce Medicare payments to home health agencies in CY 2013 by 0.1%. CMS also proposes changes that would increase flexibility in certifying patients as eligible for the home health benefit.