Medicare Publishes Regulatory Update to the Medicare Physician Fee Schedule

he Centers for Medicare & Medicaid Services (CMS) published its’ annual regulatory update to the Medicare Physician Fee Schedule (the proposed 2011 update), including rules implementing key provisions of the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively referred to as the Affordable Care Act). Published in the July 13, 2010, Federal Register, CMS is accepting comments on the proposed 2011 update until August 24, 2010. A final rule will be issued on or about November 1, 2010, to be effective January 1, 2011.

The proposed 2011 update addresses a range of payment policies and rates affecting radiologists. Below are some of the more notable provisions of the proposed 2011 update, including the new patient-notice provision of the Stark in-office exception and other provisions mandated by the Affordable Care Act.

Physician Payment Update
The update projects a 6.1 percent reduction to physician payment rates in 2011 under the sustainable growth rate (SGR) formula. Enacted by Congress in 1997, this formula has called for an across-the-board reduction in physician payment rates every year beginning with 2002. Beginning in 2003, these cuts were averted by Congressional action, most recently by the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, which replaces the 21.3 percent reduction in physician payment rates that was required by the SGR formula for 2010 with a 2.2 percent payment increase for services furnished on or after June 1, 2010 through November 30, 2010. Congress has been pressured to devise a permanent fix to the SGR problem, but such a fix is complicated by the fact that any fix will be controversial.

Notice of Alternative Imaging Suppliers
The Affordable Care Act amended the statutory Stark in-office ancillary services exception to require that CMS impose a requirement (under the exception) that a Medicare beneficiary referred for an MRI, CT or PET scan be given, at the time of the referral, a written notice that the patient may receive the services from a supplier other than the referring practice and that informs the patient of alternative suppliers located in the area in which the patient resides. This statutory amendment was effective January 1, 2010.

The proposed 2011 update includes an amendment to the Stark regulatory exception for in-office services consistent with this provision of the Affordable Care Act. This regulatory amendment is effective January 1, 2011, and thus addresses concerns that the Affordable Care Act’s amendment to the exception was self-implementing, effective January 1, 2010. The regulatory amendment requires that a Medicare beneficiary referred for MRI, CT or PET scans be given a written notice at the time of referral that the patient may receive the scan from a supplier other than the referring practice and that lists at least 10 alternative imaging suppliers located within a 25-mile radius of the practice site. If there are not 10 alternative imaging suppliers within a 25-mile radius of the practice site, then the list must include all of the alternative imaging suppliers within this area. If there are no alternative imaging suppliers within this 25-mile area, the practice is only required to give the patient a written notice that the patient may receive the referred services from a supplier other than the referring practice.

The written notice must include for each supplier on the list the supplier’s name, address, telephone number and distance from the referring practice’s site. CMS has requested comments on whether it should expand the notice requirement to additional imaging modalities and whether it should require the notice to include alternative “providers of services,” in addition to suppliers. Notably, the statutory amendment and the proposed rule only require that the list include alternative “suppliers”, a defined term that excludes hospitals and other institutional providers of imaging services.

he Centers for Medicare & Medicaid Services (CMS) published its’ annual regulatory update to the Medicare Physician Fee Schedule (the proposed 2011 update), including rules implementing key provisions of the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively referred to as the Affordable Care Act). Published in the July 13, 2010, Federal Register, CMS is accepting comments on the proposed 2011 update until August 24, 2010. A final rule will be issued on or about November 1, 2010, to be effective January 1, 2011.

The proposed 2011 update addresses a range of payment policies and rates affecting radiologists. Below are some of the more notable provisions of the proposed 2011 update, including the new patient-notice provision of the Stark in-office exception and other provisions mandated by the Affordable Care Act.

Physician Payment Update
The update projects a 6.1 percent reduction to physician payment rates in 2011 under the sustainable growth rate (SGR) formula. Enacted by Congress in 1997, this formula has called for an across-the-board reduction in physician payment rates every year beginning with 2002. Beginning in 2003, these cuts were averted by Congressional action, most recently by the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, which replaces the 21.3 percent reduction in physician payment rates that was required by the SGR formula for 2010 with a 2.2 percent payment increase for services furnished on or after June 1, 2010 through November 30, 2010. Congress has been pressured to devise a permanent fix to the SGR problem, but such a fix is complicated by the fact that any fix will be controversial.

Notice of Alternative Imaging Suppliers
The Affordable Care Act amended the statutory Stark in-office ancillary services exception to require that CMS impose a requirement (under the exception) that a Medicare beneficiary referred for an MRI, CT or PET scan be given, at the time of the referral, a written notice that the patient may receive the services from a supplier other than the referring practice and that informs the patient of alternative suppliers located in the area in which the patient resides. This statutory amendment was effective January 1, 2010.

The proposed 2011 update includes an amendment to the Stark regulatory exception for in-office services consistent with this provision of the Affordable Care Act. This regulatory amendment is effective January 1, 2011, and thus addresses concerns that the Affordable Care Act’s amendment to the exception was self-implementing, effective January 1, 2010. The regulatory amendment requires that a Medicare beneficiary referred for MRI, CT or PET scans be given a written notice at the time of referral that the patient may receive the scan from a supplier other than the referring practice and that lists at least 10 alternative imaging suppliers located within a 25-mile radius of the practice site. If there are not 10 alternative imaging suppliers within a 25-mile radius of the practice site, then the list must include all of the alternative imaging suppliers within this area. If there are no alternative imaging suppliers within this 25-mile area, the practice is only required to give the patient a written notice that the patient may receive the referred services from a supplier other than the referring practice.

The written notice must include for each supplier on the list the supplier’s name, address, telephone number and distance from the referring practice’s site. CMS has requested comments on whether it should expand the notice requirement to additional imaging modalities and whether it should require the notice to include alternative “providers of services,” in addition to suppliers. Notably, the statutory amendment and the proposed rule only require that the list include alternative “suppliers”, a defined term that excludes hospitals and other institutional providers of imaging services.

ADVOCATE will continue to provide updates as they become available.

With best regards,
Kirk Reinitz, CPA
President/CEO