Earlier this month, the Center for Medicare and Medicaid Services (CMS) issued two final rules for 2012, addressing modifications to the payment policies under Medicare’s Physician Fee Schedule (PFS) and updates to payments policies and payment rates furnished in hospital outpatient departments and ambulatory surgical centers. Both final rules address comments and concerns submitted in response to the respective CY 2012 proposed rules issued earlier this year, and both contain modifications and updates that are extremely relevant to physicians and to other key stakeholders within the orthopedic and medical device industry.
Under the 2012 Hospital Outpatient Prospective Payment System, Medicare payments will increase by 1.9 percent to hospital outpatient departments (HOPDs) and 1.6 percent to ambulatory surgery centers (ASCs), beginning on January 1, 2012. CMS also evaluated the “inpatient-only” list and removed several cervical arthrodesis and spine allograft codes from this list for 2012. These procedures (CPT 22551, CPT 22554, CPT 20930 and CPT 20931) are now payable by Medicare in the outpatient setting of care.
Other notable provisions include a reduction in the number of hospitals randomly selected for validating hospital outpatient quality reporting data for the 2013 payment determination and the addition of three quality measures for HOPDs to report for CY 2014 and CY 2015 payment determinations. The final rule also institutes a quality reporting program specific to ASCs and adopts five quality measures for purposes of the CY 2014 payment determination. Additionally, while several procedures were added to the list of ASC Covered Surgical Procedures for 2012, none of these procedures were related to the orthopedics and musculoskeletal industry.
Under the 2012 Physician Fee Schedule Final Rule, Medicare payment rates to providers will be reduced by 27.4 percent in CY 2012 based upon the Sustainable Growth Rate (SGR) formula. This is the eleventh time the SGR formula has resulted in a payment cut, though these reductions have been avoided in previous years through Congressional legislation. The current administration is committed to fixing the SGR so that these payment cuts are not realized, yet one cannot help but to reflect upon the significant ramifications this reduction would have if these payment cuts ever take effect.
Additionally, in an effort to ensure accurate payment for physician services, CMS has proceeded with the expansion of its potentially misvalued code initiative. For 2012, CMS is focusing on the codes billed by physicians in each specialty that result in the highest Medicare expenditures under the Physician Fee Schedule. The final rule specifically mentions several orthopedic codes that will be submitted to the American Medical Association Specialty Society Relative Value Scale Update Committee (RUC) for review and determination as to whether these codes are overvalued. These include: CPT 22615 (posterior lumbar spine fusion); CPT 63047 (removal of spine lamina); CPT 22851 (application of intervertebral biomechanical device); CPT 27447 (total knee arthroplasty); and CPT 27130 (total hip arthroplasty).
The 2012 Physician Fee Schedule Final Rule appeared in the November 28, 2011 edition of the Federal Register, while the 2012 Hospital Outpatient Prospective Payment System Final Rule appears in today’s edition. Stakeholders and other members of the public with an interest in the impact of this final rule should consider submitting public comments on issues specifically identified as “open for comment” within each final rule.
Daria can be reached at email@example.com.