The 2009 Medicare Physician Fee Schedule (MPFS) that the Centers for Medicare and Medicaid Services (CMS) released first in October 2008 finally became law on Jan. 1. Several physicians in recent months have criticized the Medicare formulas.

 According to an analysis by Joe Hickey of the Princeton Reimbursement Group, the 2009 payments overall will increase by an average of 1.1 percent. However Medicare payment for vein procedures in the non-facility setting will decrease.

These reductions are a continuation of the changes implemented by CMS in 2007 to the methodology used to calculate the practice expense relative value (RVU) component for most procedure-related CPT codes. These reductions are scheduled to transition from 2007 to 2010.

The new physician conversion factor for 2009 is $38.066, which incorporates the 1.1 percent payment update even though this figure is lower than the current conversion factor of $38.0870.

Hickey said that’s because a provision in the recently passed Medicare Improvements for Patience and Physicians Act (MIPPA) altered the way that the budget neutrality (BN) adjustor works. The BN adjustor had been applied to work RVUs. But under MIPPA, the adjustment is applied to the entire conversion factor.

In addition, CMS has adopted improvements to the Physician Quality Reporting Initiative (PQRI), which allows eligible professionals to report quality measures relating to their clinical practice.

Physicians who successfully report on their cases during 2009 will be able to earn an incentive payment. Launched in 2007, the PQRI was expanded in July 2008 to provide alternative, streamlined methods for reporting. The final rule added 52 new quality measures, bringing the total number of measures from which eligible professionals can select for 2009 to 153.

Reporting the PQRI information allows practitioners to qualify for a bonus ranging from $1,500 to $4,000 per physician. Medicare will issue its incentive payments to qualified physicians in the spring.

Software such as DocSite (docsite.com), a provider of patient registries and point-of-care decision support services to the healthcare market, simplifies physician reporting under Medicare’s PQRI.

The Texas Medical Association and the North Carolina Medical Society are among the most recent state AMAs to offer DocSite PQRI as a free membership benefit.

For more information about the final MPFS, see cms.hhs.gov/PhysicianFeeSched/PFSFRN/list.asp .

Physician’s Options
Prior to the final rule’s approval, Edward Mackay, MD, said that as Medicare moves towards the 40 percent cuts that are planned under the sustainable growth formula, phlebologists will have to make tough decisions.

“It may not be sustainable to care for Medicare beneficiaries with those reduced rates. If your fixed overhead is already more than 50 percent, then a 40 percent reduction may mean you are working for free,” Dr. Mackay said.

He said there are basically four options for physicians to take with Medicare: Participation, non-participation, opting out or not enrolling.

Full participation means the physician will accept the reimbursement levels set by Medicare as full payment and wait on Medicare to pay the 80 percent portion.

“Currently 94.7 percent of physicians are participating, he said, and interestingly, it is a number that has been increasing despite cuts in Medicare, leaving little doubt that the government will continue doing just that.

Many commercial insurers will often pay less and with long waits and arguments on what is allowed. If the service is denied, then the physician is out the money unless they have the patient sign a waiver before the procedure.

Non-participation allows the physician to assess the limiting charge of 109.25 percent of the Medicare rate. They must collect the payment in full from the patient and then the patient must wait on payment from Medicare and their secondary.
“For hardships or emergency care, the physician can opt to accept assignment and get paid directly from Medicare, but the fee will be 95 percent of the Medicare fee schedule. The math works in favor of non-participation over participation if 35 percent of the patients agree to 109.25 percent fee schedule.”

Next option is to opt out. Dr. Mackay said the physician and patient agree to a fee and there is no limit to that fee. The patient cannot bill any of it to Medicare. None of the ancillary services of the physician can be billed to Medicare either, such as imaging or lab work.

The physician can send the patient to the hospital or other participating provider of ancillary services to get their tests done. The physician can also perform surgery in the hospital and the patient’s bill for the hospital can be paid, but not the physician’s portion. This means the physician and his or her patient can still avail themselves to all the same services as always, but only the physicians portion will not be covered.

The only exception is emergent or urgent care. That cannot be entered into by private contract. Instead the physician would file a claim with Medicare and the physician gets paid the limiting charge. Therefore the physician who has opted out can still provide emergency care.

 Finally, the physician can choose not to enroll in the Medicare program at all. Then they are not allowed to see Medicare patients at all or even order tests. The physician would have to give up the Medicare portion of their practice.

He said there is a movement among members of the AMA: Rather than fight the cuts to seek to allow balance billing. Medicare can then set the fee schedule and physicians can set their own. Patients would be responsible for any fees above the Medicare rate. For elective procedures, patients could “shop” the best price combined with the best service for their money.  

“This would bring an element of competition, but allow physicians to set a fee they believe is sustainable for their own practice,” Dr. Mackay said. “Younger physicians first entering practice may accept payment in full from Medicare while older established physicians might charge a premium. It only makes sense.”

Deborah L. Manjoney, MD, and owner of the Wisconsin Vein Center and MediSpa, said reimbursement will certainly not increase.

“Costs for services in an office or vein center will increase, reducing the physician’s net revenue for service, while insurance companies will continue to accrue substantial savings from vein therapy being performed outside of hospitals,” Dr. Manjoney said. “Provision of services may no longer be feasible through insurance contracts, and likely it will not be cost effective to provide care for the Medicare patient. This will indeed restrict services to those able to pay out of pocket.”

John Kingsley, MD, founder and president of the Alabama Vascular & Vein Center in Birmingham, Ala., and the new Atlanta Vascular & Vein Center, said that in the past couple of years, this specialty has come under increasing scrutiny due to the increase in number of procedures being performed and the cost of those procedures.

“Private insurers and the federal government are slowly reducing the reimbursement rates for each vein specialty procedure we perform,” Dr. Kingsley said. “We can anticipate further reductions, with the latest threat being a review of the relative practice value assigned to the vein procedures. Although we fight hard to preserve these much needed services, we find that we must carefully examine not only our reimbursement but also our costs if we are to continue to enjoy this specialty.

“More importantly, if the reimbursement drops further, and our costs escalate, this specialty will rapidly disappear, for the procedures will no longer be cost effective for our patients or for the providing physician.”

Hospital Outpatient
The Hospital Outpatient Prospectiuve Payment System/Ambulator Surgical Center Payment Systen (HOPPS/ASC) new fee rules also went into effect Jan. 1. The final rule provides a 3.6 percent annual inflation update for hospital outpatient departments (HOPDs) and adopts changes to payment policies for HOPDs and Ambulatory Surgical Centers (ASCs). It also set the ASDC inflation update for 2009 at 0 percent.

Hickey said that the final rule emphasizes the rationale that exists for CMS to exercise its administrative authority under the Medicare statute to develop asnd implement a policy that would not pay hospitals for care related to illness or injuries acquired by the patient during a hospital outpatient encounter.

Such a policy, he said, is known as hospital outpatient healthcare–associated conditions (HOP-HACs), and it will adjust HOPPS payments to ensure equitable and appropriate payment for care, similar to the quality adjustments applied to payment for hospital-acquired conditions in the inpatient setting.

The rule also establishes new conditions of coverage (CfCs) for ASCs that reflect current ASC practice by focusing on patient care and the effect of that care on patient outcomes. In the second year of a four-year transition in 2009, the CfCs will help ensure that the ASCs are safely equipped and qualified to perform a broader range of services under the new revised ASC payment system. They will alsoi help increase assurances about the quality and safety of patient care received in ASCs.

Hickey also explained that Medicare law now requires that the annual HOPPS payment inflation update be reduced by 2 percentage points for hospitals that do not meet quality reporting requirements. The rule adopts four new quality measures for imaging efficiency, increasing the number of quality measures to 11. In order for hospitals to receive the full update in 2010, the HOPDs must report these quality measures in 2009.

For more information on the HOPPS/ASC pyment systems, see cms.hhs.gov/HospitalOutpatientPPS/ and cms.hhs.gov/ASCPayment/