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July/August 2011
Clinical Practice Management
Medicare Payment Cuts Again Looming for 2012
Additional proposed changes will affect how ID physicians will be paid

Unless Congress acts before the end of the year, physicians will see a 29.5 percent cut in their Medicare payments starting in 2012. Lawmakers avoided cuts in 2011 with several short-term fixes, but the cuts, called for by the flawed Medicare physician payment formula, are part of the 2012 Physician Fee Schedule Proposed Rule, released in July. The payment cuts are one of several changes in the rule that could significantly affect how ID physicians and their practices are paid.

Separately, physicians may face additional cuts resulting from the recent agreement to increase the federal debt ceiling (see related article), including a 2 percent across-the-board Medicare payment cut if an additional $1.2 trillion in debt reduction is not identified by the end of the year.

Medicare’s Proposed Rule for next year includes several incremental changes to the Physician Quality Reporting System (PQRS) and E-Prescribing (eRx) Incentive Program. Under PQRS, physicians will be able to boost their Medicare payments by only 0.5 percent, down from 1 percent in 2011. eRx incentive payments will hold steady at 1 percent in 2012. However, eligible professionals (EPs) who did not report at least 10 separate eRx events on their Medicare claims during the first six months of 2011, or did not claim an applicable exemption, will see their payments cut by 1 percent in 2012  (see May 2011 IDSA News). The IDSA website has a schedule of PQRS and eRx incentive payments and penalties. (You must be logged in to access this content.)

For individual ID physicians, PQRS claims and registry-based reporting requirements will remain roughly the same. The biggest changes are that Medicare proposes to eliminate the six-month reporting period (except for measures groups reported through a PQRS registry) and to modify the electronic health record (EHR) reporting option to align with the EHR Incentive Program’s clinical quality measures (CQM) reporting requirements. A new pilot program will allow EPs to fulfill their PQRS reporting requirement and complete the CQM component of the EHR Incentive Program. IMPORTANT:  EHR technology must be certified to report PQRS measures, which is not the same as “meaningful use” certification under the EHR Incentive Program.

No big changes are planned for the eRx Incentive Program. Similar to 2011, EPs must report 25 separate eRx events (specified by the numerator code G8553) during the 2012 and 2013 calendar years to qualify for incentive payments. However, to avoid the eRx payment penalties in 2012 and 2014, Medicare proposes allowing eRx reporting of the G8553 code regardless of whether the eRx event is associated with a denominator-eligible encounter code. This means ID physicians who electronically prescribe a medication in conjunction with an inpatient encounter or outpatient infusion can avoid the 2013 and 2014 eRx payment penalty. Additionally, two reporting periods—6 months and 12 months—will be available for EPs to avoid the penalty moving forward.

Medicare also proposes a PQRS and eRx Group Practice Reporting Option (GPRO) for practices of at least 25 EPs. This is a change from 2011, when practices of two or more EPs could report via a separate GPRO (referred to as GPRO II). Interested group practices must self-nominate to report via the group option. The quality reporting requirements will vary by group size. 

In addition to the PQRS and eRx Incentive Program, the Proposed Rule outlines how Medicare will begin to pay physicians for their performance. The Value-Based Payment modifier, which will be rolled out over two years beginning in 2015, will pay physicians differently based on the risk-adjusted cost and quality of their care compared to their local, regional, and national peers. The initial quality and cost of care measures will be published by Jan. 1, 2012.

Last December, Medicare launched a Physician Compare website that includes names and demographic information for physicians and whether they submitted quality data for the 2009 PQRS. Over the long term, Medicare will publicly report physicians’ performance information, including their quality and cost of care and patients’ experience of care. As a first step, Medicare plans to report 2012 performance information for GPRO participants on the site as early as 2013.

Lastly, Medicare has proposed a review of 91 Evaluation and Management (E&M) services codes to ensure their values are appropriate relative to other services and procedures paid under the Physician Fee Schedule. This is part of an ongoing effort to incentivize primary care and other cognitive specialties, particularly those focused on coordinating care for patients with multiple chronic conditions. Several outpatient infusion codes commonly used by ID physicians also are proposed for review and potential revaluation. IDSA will monitor this process to ensure that the concerns of ID physicians are considered.

The Proposed Rule is open for public comment until Aug. 30, and IDSA will be providing feedback. The Final Rule is expected by Nov. 1.

Note: Medicare has issued separate proposals that would expand the number of exemptions available under the eRx Incentive Payment Program and withdraw the physician signature requirement for lab tests. This latter requirement, originally scheduled to take effect earlier this year, was postponed due to significant opposition from physicians (see June 2011 IDSA News).
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