MEDICARE PHYSICIAN PAYMENT UPDATE

The Centers for Medicare and Medicaid Services (CMS) will continue to pay physicians at 2012 levels through 2013. Physician payments were scheduled to be cut 26.5 percent.

2013 is the second consecutive year with no inflation increase in physician payments. Medical claims reimbursement for some services will be the same as they were in 2011.

Revisions were made to the reporting requirements under the Physician Quality Reporting System (PQRS) for payment adjustments beginning in 2015 for eligible professionals who report data on quality measures. Under a new provision, a professional will be deemed to meet data submission requirements for the Program, if he or she “satisfactorily participates” in a qualified clinical data registry. Clarification is required by The Secretary of the Department of Health and Human Services on how reporting requirements are to be met and to define a “qualified clinical data registry”.

MULTIPLE SERVICE PAYMENT POLICIES FOR THERAPY SERVICES

CMS has a number of policies that limit payment when multiple procedures are furnished on the same day. Under the American Taxpayer Relief Act, the multiple procedure payment reduction has been increased to 50 percent for therapy services furnished on or after April 1, 2013.

OVERPAYMENTS

The timeframe in which CMS may recoup overpayments made for items and services was lengthened from 3 years to 5. Under this provision, providers are deemed to be “without fault” for any overpayments “subsequent to the fifth year following the year in which notice was sent” as to the amount paid.

EXTENSION OF TWO MEDICAL ASSISTANCE PROGRAMS

Two programs specifically for low-income Medicaid beneficiaries have also been extended through 2013.
State Medicaid plans will provide assistance to those with dual eligibility in the form of premium support for Part B services for qualifying Medicare beneficiaries that have incomes between 120% and 135% of the poverty level. The Transitional Medical Assistance Program provides low-income families with the ability to continue Medicaid coverage on a temporary basis once they become employed and collect earnings that otherwise disqualify them from eligibility. There is an increase in the amount allocated to the program in 2013, with $485 million available for the period from January 1, 2013, to September 30, 2013, and $300 million available for the period from October 1, 2013, to December 31, 2013.

LOW-VOLUME HOSPITAL ADJUSTMENT

The Medicare Program provides a percentage increase for each payment to certain qualifying low- volume hospitals. Due to the substantially broadened eligibility criteria, many more hospitals qualify for these additional payments.

MEDICARE-DEPENDENT HOSPITAL PROGRAM

Medicare-Dependent Hospitals (MDHs), small rural hospitals with a substantial Medicare patient population that rely significantly on Medicare payments , will continue to receive the increased Medicare payments through October 1, 2013. CMS has indicated that it will issue instructions to hospitals that forfeited or lost this status effective October 1, 2012, on how to regain MDH status.

PHYSICIAN WORK GEOGRAPHIC ADJUSTMENT

The Geographic Practice Cost Index (GPCI) floor of “1.0” for the work component of physician payment rates will continue through 2013. Medicare adjusts payments to physicians through the GPCI to reflect the varying cost of delivering physician services in different locations. These GPCIs are applied to the three components used to calculate a procedure’s relative value unit: work, practice expense, and malpractice. In 2003, Congress created a “floor” of 1.0 for the work component of the formula so that physician payments would not be reduced in a geographic area just because the relative cost of physician work fell below the national average.

OUTPATIENT THERAPY SERVICES

There is an annual per-Medicare-beneficiary cap of $1,500 for outpatient therapy services (physical and speech therapy combined, and separately to occupational therapy. In 2006, an exceptions process whereby Medicare beneficiaries can request and be granted an exception to the caps, and receive an unlimited amount of therapy services to the extent deemed medically necessary by Medicare was established. The exceptions process, which effectively suspends the cap has been extended through December 31, 2013.

Additional protection to beneficiaries affected by this cap has been added to protect Medicare beneficiaries from liability for items and services furnished to them if the Medicare beneficiary and the provider did not know, and could not have been reasonably expected to know, that the item or service would be non-covered.