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President
Obama Signs the Temporary Payroll Tax Cut
Continuation Act of 2011
--New
Law Includes Physician Update Fix through February
2012--
On
Friday, December 23, 2011, President Obama signed into
law the Temporary Payroll Tax Cut
Continuation Act of 2011 (TPTCCA).
This new law prevents a scheduled payment cut for
physicians and other practitioners who treat Medicare
patients from taking effect immediately. While the
negative update for the 2012 Medicare Physician Fee
Schedule is now scheduled to take effect on March 1,
2012, the Administration remains strongly opposed to
letting this cut take effect. As he has repeatedly
made clear, President Obama is committed to a permanent
solution to eliminating the Sustainable Growth Rate’s
cut. CMS will continue to work with Congress to
achieve this goal.
The
Centers for Medicare & Medicaid Services (CMS) has
also recently implemented several important changes for
Medicare providers and beneficiaries, and we would like
to remind physicians and practitioners of some of these
key changes for 2012. For many of your patients,
Medicare costs will go down. Medicare cost-sharing
for Part B services will decline in some cases and, for
the first time, the Part B deductible will decrease, by
$22, to $140.
Additionally,
health care professionals will be paid more to provide
certain important services for people with Medicare.
CMS has increased the payment amount for the initial and
annual wellness visit – which has no cost sharing for
patients -- to account for the introduction of health
risk assessment (HRA). CMS
believes it is important to balance the
comprehensiveness of the HRA with the potential burden
on patients and health professional time constraints.
As such, in 2012, CMS will allow for variation in the
content of the HRA.
The
Medicare Part D prescription drug program has also been
enhanced for 2012, with the coverage gap being further
reduced as it is phased-out over the next several years.
These improvements to the drug benefit from the
Affordable Care Act have already saved millions of
seniors nearly $2 billion.
We
wish to remind physicians and practitioners about the Primary
Care Incentive Program. Again in 2012, primary
care physicians, nurse practitioners, clinical nurse
specialists, and physician assistants may be eligible to
receive an incentive payment equal to 10 percent of
their allowed charges for primary care services under
Medicare Part B. This incentive is paid in
addition to any physician incentive payments for
services furnished in Health Professional Shortage
Areas. Please remember that if a practitioner has
reassigned his or her benefits to another entity, such
as a group practice, Medicare will pay that entity and
not the individual practitioner.
The
Affordable Care Act created the Center for Medicare and
Medicaid Innovation that offers physicians,
practitioners and other health care leaders the
opportunity to propose innovative payment and service
delivery models to lower costs, improve quality, and
improve health. More information can be found at www.innovations.cms.gov.
Attached
please find summaries of key provisions of the TPTCCA
along with some information about how these changes may
affect providers and provider billing.
President
Obama Signs the Temporary Payroll Tax Cut
Continuation Act of 2011
Physician
Payment Update
Section
301 of the TPTCCA prevents a payment cut for physicians
that would have taken effect on January 1, 2012.
An update of zero percent is effective for claims with
dates of service January 1, 2012, through February 29,
2012. While
the physician fee schedule update will be zero percent,
other changes to the relative value units used to
calculate the fee schedule rates must be budget neutral.
To make those changes budget neutral, the conversion
factor must be adjusted for 2012.
CMS is currently developing the 2012 Medicare Physician
Fee Schedule (MPFS) to implement the zero percent
update. As previously advised, Medicare claims
administration contractors will be holding new, January
2012 claims for up to 10 business days in order to
effectively test and implement the new 2012 MPFS.
We expect these claims to be released into processing no
later than January 18, 2012. Claims with dates of
service prior to January 1, 2012, are unaffected.
Finally, Medicare contractors will be posting the new
rates on their websites no later than January 11, 2012.
Extension
of Medicare Physician Work Geographic Adjustment Floor
Current
law requires payment rates under the MPFS to be adjusted
geographically to reflect area differences in the cost
of practice. The following three components of the
MPFS payment are adjusted: physician work,
practice expense, and malpractice expense. Section
303 of the TPTCCA extends the existing 1.0 floor on the
physician work geographic practice cost index, through
February 29, 2012. As with the physician payment
update, this change will be accomplished through a
revised 2012 MPFS.
Extension
of Physician Fee Schedule Mental Health Add-On Payments
For calendar
year 2011, certain mental health services' payment rates
continued to be increased by five percent over what they
would otherwise be paid using the standard MPFS payment
methodology. Section 307 of the TPTCCA extends the
five percent increase in payments for these mental
health services, through February 29, 2012.
Similar to the zero percent update and the physician
work geographic adjustment floor extension, the five
percent increase will be reflected in the revised 2012
MPFS.
Extension
of Medicare Modernization Act Section 508
Reclassifications
Section
302 of the TPTCCA
extends Section 508 reclassifications and certain
special exception wage indexes for 2 months, from
October 1, 2011, through November 30, 2011. For
the period beginning on October 1, 2011, and ending on
November 30, 2011, Section 302 also requires removing
Section 508 and special exception wage data from the
calculation of the reclassified wage index if doing so
raises the reclassified wage index. All hospitals
affected by Section 302 of the TPTCCA
shall be assigned a special wage index effective for
only October and November 2011. We will apply the
provision to both inpatient and outpatient hospital
payments. For hospital outpatient payments, a
special exception wage index will be applicable from
January 1, 2012, through February 29, 2012.
Extension
of Exceptions Process for Medicare Therapy Caps
Section
304 of the TPTCCA
extends the exceptions process for outpatient therapy
caps. Outpatient therapy service providers may
continue to submit claims with the KX modifier, when an
exception is appropriate, for services furnished on or
after January 1, 2012, through February 29, 2012.
The
therapy caps are determined on a calendar year basis, so
all patients begin a new cap year on January 1, 2012.
For physical therapy and speech language pathology
services combined, the limit on incurred expenses is
$1,880. For occupational therapy services, the
limit is $1,880. Deductible and coinsurance
amounts applied to therapy services count toward the
amount accrued before a cap is reached, and also apply
for services above the cap where the KX modifier is
used.
Extension
of Moratorium On Independent Laboratory Billing for the
Technical Component (TC) of Physician Pathology Services
Furnished to Hospital Patients
In
the final physician fee schedule regulation published in
the Federal Register on November 2, 1999,
CMS finalized a policy to pay only the hospital for the
TC of physician pathology services furnished to hospital
patients. Under prior policy, independent
laboratories continued to be paid for the technical
component of a pathology service provided to a hospital
patient. At the request of the industry, to allow
those independent laboratories that were separately paid
for the technical component of a physician pathology
service provided to a hospital patient sufficient time
to negotiate new arrangements with hospitals, the
implementation of this rule was administratively delayed
until 2001. Subsequent legislation formalized a
moratorium on the implementation of the rule.
Although
the most recent extension of the moratorium expired at
the end of 2011, section 305 of the TPTCCA
restores the moratorium through February 29, 2012.
Therefore, those independent laboratories that are
eligible may continue to submit claims to Medicare for
the TC
of physician pathology services furnished to patients of
a hospital, regardless of the beneficiary's
hospitalization status (inpatient or outpatient) on the
date that the service was furnished. This policy
is effective for claims with dates of service on or
after January 1, 2012, through February 29, 2012.
Extension
of Ambulance Add-On Payments
The
provisions that were extended by Section 306 of the TPTCCA
are: (1) the 3 percent increase in the ambulance fee
schedule amounts for covered ground ambulance transports
that originate in rural areas and the 2 percent increase
for covered ground ambulance transports that originate
in urban areas; (2) the provision relating to air
ambulance services that considers any area that was
designated as a rural area as of December 31, 2006,
shall continue to be treated as a rural area for
purposes of making payments under the ambulance fee
schedule for such air ambulance services; and (3) the
provision relating to payment for ground ambulance
services where the base rate of the fee schedule is
increased when the ambulance transport originates in an
area that is included in those areas comprising the
lowest 25th percentile of all rural
populations arrayed by population density.
All
of these payment provisions are extended through
February 29, 2012. As
previously advised, Medicare claims administration
contractors will be holding new, January 2012 ambulance
claims for up to 10 business days in order to
effectively implement the new 2012 ambulance fee
schedule. We expect these claims to be released
into processing no later than January 18, 2012.
Claims with dates of service prior to January 1, 2012,
are unaffected.
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