Medicare Releases the Final 2013 Physician Fee Schedule

By Adrienne Dresevic, Esq. and Carey F. Kalmowitz, Esq.

December 2012—On November 1, 2012, the Centers for Medicare and Medicaid Services (CMS) issued the Physician Fee Schedule for calendar year 2013. The interim final rule with comment period goes into effect on January 1, 2013 and updates payment policies and payment rates for services furnished January 1, 2013 through December 31, 2013.

Importantly, the final rule sets the Conversion Factor for 2013 at $25.0008, which is down from $34.0376 in 2012. This across the board reduction reflects a statutorily required decrease of 26.5% and takes effect on January 1. However, whether this reduction will actually occur depends upon Congress, which has overridden the reduction every year since 2003.

Apart from the conversion factor, individual providers may see greater or lesser changes to their reimbursement rates in 2013 as a result of the various policy changes in the final rule. While several of the policies favor primary care specialists who will see increases, other specialist will see decreased payments. Specifically, radiologists, according to CMS estimates, will see a 3% decrease in payments from 2012. The remainder of this article highlights a few of the provisions affecting imaging services.

SBA Sliding Scale for Interest Rates

CMS has finalized its proposal to use a “sliding scale” approach for interest rates when calculating Physician Expense (PE) Relative Value Units (RVUs). The “sliding scale” is based on the Small Business Administration’s (SBAs) maximum interest rates and will vary depending on the type and size of the loan. To compensate for changes in the prime rate and SBAs formula, CMS will periodically update the rates to reflect those changes and address concerns expressed by commenters. CMS believes that this approach will better reflect the goal of calculating the “relative resources required to furnish services that are paid under the PFS.”

Multiple Procedure Payment Reduction

Beginning in 2013, the multiple procedure payment reduction (MPPR) policy will apply to the Professional Component (PC) and Technical Components (TC) of advanced imaging services (ie, CT, MRI, and ultrasound) when multiple services are provided to a beneficiary during the same session by the same physician, or by different physicians in the same group practice. While CMS originally proposed expanding the MPPR to the PC component of advanced imaging services in 2012, due to operational difficulties, it did not impose the MPPR reduction on the PC component of services provided by different physicians in group practices. CMS has now addressed those operational challenges and it will now begin to implement the policy beginning January 1, 2013. For radiology services, under the MPPR policy, CMS pays the highest value service at 100% then reduces the payment(s) for the second and other subsequent services performed during the same session by 25%.

CMS may revisit some parts of the policy due to concerns raised by commenters. Specifically, it may create a separate MPPR modifier to address concerns over using the same “59” modifier for both MPPR and the Correct Coding Initiative (CCI). Additionally, it may modify the rule from services performed during the same “session” to apply to services performed the same day. Currently, the only guidance on what is a different session is that the services were performed at widely different times. However, any change will require additional rulemaking and comments. CMS may also consider applying the MPPR reduction to all imaging services in the future.

In CY 2013, CMS will also begin to apply MPPR to the TC of cardiovascular services and has updated the code lists to reflect this change.

Other important provisions in the 2013 Final Interim Rule include:

• Finalizing the use of Physician Practice Information Survey (PPIS) data to calculate practice expense relative values.
• Adopting the interim CY 2012 RVUs for radiology and interventional radiology procedures and finalized procedure times for selected radiology procedures.
• Proposing additional codes for review in 2014.
• Updating guidance on the value-based payment modifier program, which will vary payments to providers based on quality and cost of care provided to beneficiaries. The new rule will begin applying to groups of 100 or more physicians in 2015 with implementation to all providers by 2017 as statutorily required.
• Updating the Physician Quality Reporting System (PQRS) and e-prescribing programs.
• Permitting additional providers, including non-physician providers, to order portable x-ray services in accordance with the provider’s applicable state scope of practice.

Adrienne Dresevic, Esq. graduated Magna Cum Laude from Wayne State University Law School. Practicing healthcare law, she concentrates in Stark and fraud/abuse, representing various diagnostic imaging providers, eg, IDTFs, mobile leasing entities, and radiology and multi-specialty group practices.

Carey F. Kalmowitz, Esq. graduated from NYU Law School. Practicing healthcare law, he concentrates on corporate and financial aspects, eg, structuring physician group practice transactions; diagnostic imaging and ancillary services, IDTFs, provider acquisitions, CON, compliance, and Stark and fraud/abuse.

The authors are members of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or (212) 734-0128, or at www.thehlp.com.