CMS updated the physician payment rates under the Medicare physician fee schedule for calendar year (CY) 2008 and revised policies affecting Medicare Part B payments in the advance release of a Final rule that was released on November 2, 2007, and will be published in the Federal Register on November 27, 2007. CMS projects it will pay 10.1 percent less in 2008 than it did in 2007 for services provided to Medicare beneficiaries by physicians and other health care professionals.
The payment decrease is required by a statutory formula that compares the actual rate of spending growth to a target rate, which is based on such factors as the growth in number of Medicare fee-for-service beneficiaries and statutory or regulatory changes in benefits. If the actual rate of growth exceeds the target rate, the update is decreased; if it is less, the update is increased. The initial estimate of the sustainable growth rate for CY 2008 is -0.1 percent, and the 2008 conversion factor for relative value units in the fee schedule is $34.0682.
In addition to payment changes for Part B drugs and other services, the final rule will set forth the 2008 quality measures for physicians, confirm expiration of the Physician Scarcity Area bonus, increase the value of the work component of anesthesia services by 32 percent, and require physical and occupational therapy providers to meet state licensing and other requirements. The rule also will finalize the proposal for anti-markup provisions for diagnostic tests, as well as the prohibition on space and equipment sharing for independent diagnostic testing facilities. CMS has postponed indefinitely finalization of all other Stark-related provisions included in the CY 2008 physician fee schedule (PFS) proposed rule (72 FR 38122, July 12, 2007).
Payment changes
Certain ophthalmological procedures have been added to the list of procedures subject to the outpatient prospective payment system (OPPS) cap, effective January 1, 2008. CMS has determined that these procedures meet the definition of imaging services under the Deficit Reduction Act of 2005 (DRA) (PubLNo 109-171), but were not included in the original list of imaging services subject to the OPPS cap. Payment for these services will be capped only if the physician fee schedule technical component payment amount exceeds the OPPS payment amount.
CMS has postponed finalizing the regulatory language changes it proposed in the CY 2008 PFS proposed rule with respect to bundled price concessions for Part B drugs. Rather than adopting a specified approach for allocating bundled price concessions across Part B drugs that are sold under bundling arrangements for purposes of calculating the average sales price (ASP) of those drugs, CMS has maintained existing guidance that manufacturers may make reasonable assumptions in their calculations of ASP.
CMS, however, has finalized its proposal to continue to recognize payment for preadministration services for intravenous immune globulin (IVIG) preadministration services. This payment is meant to compensate physicians for the extra resources required to locate and obtain IVIG products and schedule patient infusions.
Expiration of PSA bonus
Section 413(a) of the Medicare Modernization Act of 2003 (MMA)(PubLNo 108-173), which established a 5 percent incentive payment for physicians furnishing services in physician scarcity areas (PSAs) has expired. Accordingly, the PSA bonus will not apply to claims for services furnished on or after January 1, 2008.
Work component of anesthesia services and budget neutrality
The work component of anesthesia services will increase by 32 percent for CY 2008. Due in part to this increase, as well as changes to work relative value units (RVUs) for CY 2008, CMS will continue to apply the separate budget neutrality (BN) adjustor to the work RVUs. The BN adjustor has been revised from the proposed 0.8816 and will be 0.8806 in CY 2008.
Anti-markup provision for diagnostic tests
Under the CY 2008 PFS proposed rule, CMS would have revised several of the physician self-referral regulations. CMS has finalized only one of those proposals: the anti-markup provision for diagnostic tests. Under the anti-markup provision, a physician or supplier that orders a diagnostic test may not mark up the test if the technical component (TC) is outright purchased or performed at a site other than the office of the billing physician or supplier. The anti-markup provision also will apply to the professional component (PC) of tests if the PC is outright purchased or not performed in the office of the billing physician or supplier. If the test is outright purchased or performed outside of the office, payment will be limited to the lower of: (1) the outside supplier's net charge to the physician; (2) the physician's actual charge; or (3) the fee schedule amount for the test that would be allowed if the supplier had billed directly.
CMS declined to finalize the following proposals: (1) burden of proof; (2) obstetrical malpractice insurance subsidies; (3) unit of service (per-click) payments and lease arrangements; (4) period of disallowance for noncompliant financial relationships; (5) ownership or investment interest in retirement plans; (6) set in advance and percentage-based compensation arrangements; (7) stand in the shoes provisions; (8) alternate criteria for satisfying certain exceptions; and (9) services furnished under arrangement.
Independent diagnostic testing facilities
CMS has finalized the provision that prohibits fixed-site independent diagnostic testing facilities (IDTFs) from sharing space with or subleasing their operations to another Medicare-enrolled individual or organization. CMS removed the sharing of staff aspect of the IDTF provision and adopted a one-year delay in implementation (effective January 1, 2009) for IDTFs that currently are enrolled in the Medicare program and are sharing space with another Medicare-enrolled individual or organization.
Computer-generated fax exemption
The proposal to eliminate the computer-generated fax exemption from the e-prescribing standards applicable to physicians and suppliers in connection with prescriptions under Medicare Part D has been modified to provide for retention of the exemption only in instances of temporary or transient transmission failure and communication problems that would preclude the use of the SCRIPT standard. The new provision will be effective January 1, 2009, to give physicians and suppliers time to adopt the standard.
Physical and occupational therapy
Persons furnishing physical and occupational therapy services to Medicare beneficiaries will be required to meet licensing, registration, or certification requirements in the state in which they practice, and complete an approved educational program for the discipline in which they practice. This provision addresses CMS' concern that therapy services are not always being furnished by individuals trained as therapists. CMS believes it is critical to establish consistent standards for qualified therapists in the Medicare program.
AMA response to payment cuts
The American Medical Association (AMA) has denounced the physician payment cut and has called for Congress to intervene. Edward Langston, M.D., AMA Board Chair, said the 10.1 percent decrease in physician payments for CY 2008 "is bad news for America's seniors as 60 percent of physicians say the cut will force them to limit the number of new Medicare patients they can treat. Congress must step in to replace the cut with payment increases that keep up with medical practice costs."
Source: CMS release, Nov. 2, 2007.
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