The CMS Proposed Fee Schedule for 2010 gives PCP’s a Raise But Cuts Specialist Pay

The Centers for Medicare and Medicaid Services proposed significant changes to the Physician Fee Schedule on July 1, which will pave the way for the reform of the current flawed payment formula, but proposes a 6 to 8 percent pay raise for primary care physicians starting in 2010.

Medicare law requires that payment amounts be based on the Sustainable Growth Rate (SGR), which was implemented by the Balanced Budget Act of 1997 in a fetal attempt to match physician payment to economic growth.  Since 2002 that formula has called for a pay cut for physicians, which have never been implemented.  Since 2004 Congress has vetoed those cuts and not allowed them to go through.  Based on current data, physicians face a 21.5 percent reduction in 2010, which by all measures will not go through.

CMS has proposed to remove physician-administered drugs from the definition of “physician services” next year in anticipation of enactment of legislation to provide fundamental reforms to Medicare physician payments in order to begin the proces of eliminating the SGR and fix physician payment.

This change will not give any immediate relief, CMS anticipates it will reduce future payment cuts.

More good news for primary care physicians:

• CMS is proposing to eliminate making payment for consultation codes, which are typically billed by specialists and are paid at a higher rate compared to equivalent E&M services.  Practitioners will use existing E&M service codes in place of the consultation codes.  CMS intends for resulting savings to be redistributed to increase payments for the existing E&M services.
• CMS is proposing to increase the payment rates for the Initial Preventive Physical Exam, also known as the “Welcome to Medicare” visit to parallel payment rates for higher complex services.
• CMS is also proposing in 2010 to include data about physician’s practice costs from a new survery, the Physician Practice Information Survery (PPIS), designed and conducted by the American Medical Association (AMA).
• CMS is proposing to rengineer how Medicare recognizes the cost of professional liability insurance in its payment system, which it hopes will promote payment equality by redirecting the portion of Medicare’s payment for professional liability insurance to those physicians that have the highest malpractice insurance costs.

For primary care facilities that have an interest in, or own, an imaging center with CT or MRI equipment, the news is some what mixed.  CMS is considering reducing payment for services that require the use of expensive such devices.  The intention is to use the proceeds of those cuts to be redistributed “to increase payments for other services, including primary care services.