Under a final rule issued on November 1, the U.S. Centers for Medicare and Medicaid Services (CMS) plans to cut payment rates to providers by 27.4% due to the requirements of the sustainable growth rate (SGR) formula, the agency said.
The rule is bound by current law which dictates drastic payment cuts under the SGR formula that was adopted by the Balanced Budget Act of 1997. Unless Congress once again stays this cut, providers paid under the Medicare Physician Fee Schedule (MPFS) will face cuts well above 25% -- though less than the 29.5% reduction CMS had estimated in March due to lower than expected Medicare cost growth.
This is the 11th time the SGR formula has resulted in a payment cut, although the cuts have been averted through legislation every year but in 2002, CMS said. The agency estimates total Medicare payments under the MPFS in 2012 at approximately $80 billion.
CMS will work with Congress to fix the sustainable growth rate problem permanently, said CMS administrator Dr. Donald Berwick in a statement.
"We need a permanent SGR fix to solve this problem once and for all," Berwick said. "That's why the president's budget and his plan for economic growth and deficit reduction call for permanent, fiscally responsible reform, and why we are committed to working with the Congress to achieve a permanent and sustainable fix."
Other changes for 2012 include an expansion of the potentially misvalued code initiative, which is Medicare's effort to ensure that it is paying accurately for physician services. The agency plans to focus on codes billed by physicians in each specialty that results in the highest Medicare costs, and to assess whether these codes are overvalued, CMS said.
CMS also plans to change how it adjusts payment for geographic variation in the cost of practice: CMS will use data from the American Community Survey (ACS) in place of Department of Housing and Urban Development (HUD) rental data, as well as data currently used for nonphysician employee compensation.
Finally, in the 2012 MPFS final rule, CMS plans to accomplish the following:
- Expand the multiple procedure payment reduction policy to the professional component of advance imaging services.
- Update physician incentive programs, including the Physician Quality Reporting System, the ePrescribing Incentive Program, and the Electronic Health Records Incentive Program.
- Finalize quality and cost measures that will be used to establish a new value-based modifier that would adjust physician payments based on whether they are providing higher quality and more efficient care.
- Implement the third year of a four-year transition to new practice expense relative value units, based on data from the Physician Practice Information Survey that was adopted in the MPFS 2010 final rule.
This new rule is based in policy decisions rather than sound data, according to Cynthia Moran, assistant executive director for government relations at the American College of Radiology (ACR).
"These are policy decisions made [under CMS'] own agenda, and we're disappointed," she told AuntMinnie.com. "We'll be doing further critique of their analysis; although the problem is that CMS doesn't share its data, instead using words like 'significant' or 'moderate.' This is going to become a legislative battle at some point and we will keep fighting."
The final rule with comment period will appear in the November 28 Federal Register.
