Washington Report: CMS Releases 2013 Physician Fee Schedule and Announces 2013 SGR Cut

On November 1, 2012, the Centers for Medicare and Medicaid Services released the 2013 Medicare Physician Fee Schedule (PFS) Final Rule. The policies announced in this Final Rule will take effect on January 1, 2013. The Final Rule sets Medicare Physician Fee Schedule (PFS) payment rates for CY 2013, and contains the Multiple Procedure Payment Reduction (MPPR), the SGR related cut for CY 2013, the mis-valued codes adjustment, as well as other payment policies. Information on the expansion of the MPPR was covered in our last eNews. Click here to view the last eNews.

Sustainable Growth Rate Formula (SGR):
With regard to the SGR, CMS is announcing that the SGR related cut that will take place on January 1, 2013 will be 26.5%. This means that the Conversion Factor (CF) will go down by this percentage amount and be applied to all services. The actual payment adjustment for an individual code may be more or less than 26.5% because of other changes in code value being announced with this final rule.

Specifically, the Medicare Physician Fee Schedule Conversion Factor for CY 2012 has been $34.0376. For CY 2013, the Medicare Physician Fee Schedule Conversion Factor will be $25.0008 unless Congress and the President intervene to prevent this cut from taking place.

Mis-valued Codes Adjustment:
As a result of the policies being adopted by CMS in the 2013 Rule, radiology will experience additional decreases in their fee schedule payments above and beyond anything SGR related. Payment for selected “misvalued codes” will affect certain diagnostic imaging related specialties. The impact on radiology related specialties are below:

CY 2013 MPFS Final Rule Estimated Payment Impact on Radiology
Specialty: Payment Impact
INTERVENTIONAL RADIOLOGY: -3%
RADIOLOGY: -3%
NUCLEAR MEDICINE : -3%
RADIATION ONCOLOGY: -7%
PHYSICIAN ASSISTANT: +3%
DIAGNOSTIC TESTING FACILITY: -7%
RADIATION THERAPY CENTERS: -9%
VASCULAR SURGERY: -2%

CY 2013 MPFS Final Rule Estimated Payment Impact on Selected Other Specialties
Specialty: Payment Impact
INTERNAL MEDICINE: +4%
FAMILY PRACTICE: +7%

Geographic Practice Cost Indices (“GPCI”):
CMS assigns separate geographic practice cost indices (“GPCI”) to the work, practice expenses (“PE”), and malpractice cost components of each of the more than 7,000 types of physician services. Calendar Year 2013 is the final year of the sixth GPCI update. However, CMS has not released the GPCI impact to the RVU’s for 2013. When this GPCI impact is released by CMS later this year, there will be a further negative impact to the Medicare physician fee schedule. We expect the decrease for the GPCI to be no more 1% in 2013.

ADVOCATE will continue to provide updates as they become available.

Best regards,
Andre Perotta, Esq.
Chief Compliance Officer