Medicare Finalizes 2013 Physician Payment Schedule

On November 1, 2012, the Centers for Medicare & Medicaid Services (CMS) finalized previously announced changes to the Medicare Physician Fee Schedule (MPFS) for services furnished by physicians during calendar year 2013. These payment changes will affect different specialties in different ways. For example, payments to family physicians will increase by approximately 7% and to other practitioners (including primary care physicians) between 3% and 5%. By contrast, CMS will reduce payments for services to physicians with certain other specialties during 2013 (for example, a 2% payment reduction to cardiologists and a 3% reduction to radiologists).
Included within the proposed payment schedule will be a new separate payment (if billed properly using a specific billing code) to a patient’s community physician or practitioner (typically, a primary care physician, but other physicians such as cardiologists or oncologists could be entitled to the payment) for the coordination of care of patients during the first thirty (30) days after discharge from a hospital or nursing home stay. This payment for “transition care management” represents the first time that CMS has proposed to pay for the care required of patients as they transition back into the community after a stay at a hospital or skilled nursing home. This discharge transition care payment represents 4% of the proposed 7% increase in payments to family practitioners. In its prior announcement that accompanied the proposed regulations that are now final, CMS noted that this payment for discharge transition care management dovetails with the Affordable Care Act mandated program to reduce payments to hospitals that have excess readmissions for certain conditions.
CMS also indicated that unless Congress acts to postpone (or repeal) the previously scheduled payment reductions under the Sustainable Growth Rate (SGR) methodology, payments under MPFS will be reduced by approximately 27%. Since 2003, SGR cuts have been averted by Congress on a year-to-year basis, but no long term solution has been adopted by Congress.
Also included within the final rules are changes to several previously implemented quality reporting initiatives, and as authorized by the Affordable Care Act, a program in which physician groups can participate on a voluntary basis through which their payments will be adjusted based on the quality and cost of care they provide to their patients. Groups with 100 or more eligible professionals that elect not to participate in the physician quality reporting program will be subject to a 1% payment reduction.
In a separate but related announcement, on November 6, 2012, CMS also finalized a previously proposed rule that will result in CMS-funded payments during both 2013 and 2014 to physicians (including osteopaths) who are engaged in family medicine, general internal medicine, pediatric medicine and related subspecialties, and who treat Medicaid patients in an amount at least equal to the reimbursement rate for those physician services if provided to Medicare patients. The objective of this rule, which implemented a provision in the Affordable Care Act, is to incentivize primary care physicians to continue to treat Medicaid patients. These supplemental payments will be fully funded by CMS, with CMS to reimburse the states for 100% of the cost of the supplemental payments.