CMS’ physician fee schedule, HOPPS final rules cause a lot of reaction. Image Source: American Academy of Orthopaedic Surgeons

The Centers for Medicare & Medicaid Services (CMS) has released final rules on the Medicare Physician Fee Schedule (MPFS) and Hospital Outpatient Perspective Payment System (HOPPS), which set the payment regulations for the office and hospital outpatient settings for 2009.

The final ruling from CMS states that the conversion factor for the MPFS will be $36.07 effective Jan. 1, 2009—a 5.3 percent decrease from the current conversion factor of $38.08. According to the American College of Radiology (ACR), radiologists will see a 2.7 percent increase next year in their professional component, although in the technical component, they will see a 5.3 percent cut, since that is currently not impacted by the third five-year review.

Also, as part of the final MPFS rule, CMS is not requiring all imaging be subject to the Independent Diagnostic Testing Facility (IDTF) quality standards for 2009. In referencing its decision, the agency cited the enactment of section 135 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), which requires that all sites that provide CT, MR, and nuclear medicine services, including PET, for Medicare patients to be accredited by January 2012.

In addition, CMS is not requiring physicians and nurse practitioners to meet certain quality and performance standards when providing diagnostic testing services, except mammography services, within their medical practice. The ACR said that all providers in every practice setting should be required to meet all quality and performance standards that are required of IDTFs and accredited sites. Instead, CMS plans to continue reviewing public comments.

Also, new anti-markup regulations, which seek to take the profit out of reassignment of benefits for diagnostic tests billed by one entity but the service, either professional component or technical component, provided by another, will become effective Jan. 1, 2009, under the final ruling.

CMS said that if a physician is willing to provide a service for less than the rates paid in the MPFS, then Medicare should be billed the lower rate and realize the profit. However, the agency has relaxed its requirements on how it defines physicians who are part of a practice and the parameters for site of service where the procedures are performed, according to the ACR.

Michael A. Mussallem, chairman and CEO of Edwards Lifesciences and board chairman of Advanced Medical Technology Association (AdvaMed) said the association is pleased that CMS did not move forward with its proposal to begin gainsharing, which could have created an exception to federal rules against self-referrals that would allow incentive payments and cost-savings to be shared with physicians.

The ACR said that the anti-markup up rule and lack of implementation of the IDTF rules also leave a relaxed rule on who performs a procedure or supervises medical imaging equipment, not specifying whether it should be a radiologist or even the same physician. Medicare admits that relaxing the rules allows for all entities to be in compliance with the anti-markup regulations by Jan. 1, 2009.  

CMS also issued a final rule for the conversion factor for hospital outpatient payments, instituting a 3.6 percent increase from $63.69 for 2008 to $66.06 in 2009. The reduced conversion factor if hospitals do not meet the hospital quality reporting requirements is $64.78, the agency said.

Medicare also finalized its proposal to move forward with the five new ambulatory payment classifications (APCs) for ultrasound, CT/CTA without contrast, CT/CTA with contrast, MR/MRA without contrast and MR/MRA with contrast. When more than one ultrasound, CT or CTA, MR or MRA study is performed in the same session, the hospital will submit the claim for the multiple studies and Medicare will send back one bundled payment, according to the rule.

The ACR said that the methodology for paying for such APCs works when two studies are done in the same session, but cuts reimbursement by as much as 75 percent for the third and more studies, which could effect payments for trauma cases.