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Summary of Medicare Changes for 2010

There have been several changes to the Medicare program for 2010. Below is a summary of some of the more important changes. For more detailed coverage of these—and other—changes, please visit the Medicare Changes 2010 page.

Medicare Physician Payment Update; Sustainable Growth Rate Formula

On June 24, by a vote of 417-1, the House approved a bill (H.R. 3962) that calls for a 2.2 percent Medicare fee schedule update for physician services through November 2010. The update replaces a 21-percent cut, and will be applied retroactively to claims for services provided on or after June 1. The bill passed in the Senate on June 18 by unanimous consent.

The President signed the bill into law on June 25.

While the six-month reprieve addresses the immediate cut and is retroactive to June 1, ACP strongly believes that it is inexcusable that Congress allowed the cut to go into effect in the first place. The six-month reprieve does not move any closer to a long-term SGR solution.

Clearly, the cut has caused untold havoc for practices. Both political parties share responsibility for what has occurred.

CMS instructed its Medicare contractors to hold off on processing claims for physician services furnished beginning June 1 through June 17. CMS intended for this tactic, which is consistent with the Medicare statute that prohibits contractors from paying electronic claims before 14 days after they are submitted, to provide enough time for Congress to enact legislation to retroactively avert the cut. CMS instructed contractors to start to pay claims at the rate reflecting the 21% cut on June 18. It is unclear how many claims have been paid with the 21% cut. Contractors will automatically adjust the claims paid at the reduced rate to pay physicians the additional amount provided by the retroactive fix; physicians will have to take no action. CMS has stated that physicians will not be expected to try to collect co-payment amounts associated with the additional payments generated by the retroactive adjustment. All claims for services furnished June 1 and beyond that have yet to be paid--whether before or after the date of the legislative fix--will be paid at the rate specified by the fix.

The College has indicated support for an approach that would guarantee no cut in payments for at least three-and-a-half years while beginning a transition to a better permanent system for determining annual Medicare payment updates. Additional information on specific legislative efforts—including whether the College is urging members to contact Congress—is available on the Legislative Action Center.

Extension of Participation Deadline

Medicare extended the deadline for providers to change their participation status; the participation status election period closed on March 17. Typically, providers had until Dec. 31 to decide whether they would participate. This extended period allowed providers more time to monitor what happens with the Medicare physician payment update. ACP, along with AMA and other specialty societies, sent a letter to CMS urging the agency to extend the deadline beyond March 17 because of the uncertainty surrounding the SGR cut, but CMS declined to act on the request.

Consult Codes Eliminated

Beginning Jan. 1, 2010, Medicare will no longer recognize the Current Procedural Terminology (CPT) Consultation codes (99241-99245) for payment. Instead, physicians will need to use the most appropriate office visit and hospital care codes.

Practice Expense Payments Updated

In 2007, the Centers for Medicare and Medicaid Services (CMS) contracted with the AMA to conduct an updated survey of practice operating costs by specialty. The data collected by the survey redistributed the practice expense payments to each specialty. Because some of the payment changes were substantial, the update will be phased in between now and 2013.

Payment Increases for “Welcome to Medicare” Exam

CMS has determined that the payment for the Initial Preventive Physician exam administered to new Part B beneficiaries was insufficient. Under the new determination, CMS has decided that the intensity and effort associated with a “Welcome to Medicare” exam is equal to a moderate-to-high-level new patient office visit so payments will be increased accordingly.

Co-payment Reduced for Outpatient Psychiatric Services

As the result of a 2008 law, CMS is phasing in a reduction in the beneficiary co-payment for outpatient services using a psychiatric diagnosis code. For 2010 and 2011 the beneficiary will be required to pay 45% of the allowed charge. When the change is fully adopted in 2014, the beneficiary will only pay 20% of the allowed charge.

Changes to the Physician Quality Reporting Initiative (PQRI)

Under the PQRI program in 2010, physicians can earn an incentive payment of up to 2% for reporting on specific quality measures. In 2010, the PQRI program expands the measures on which physicians can report. In 2010, group practices can also choose to qualify for a group incentive payment rather than at the individual provider level. In addition, physicians can submit data using qualified electronic health records products in 2010.

Changes to the e-Prescribing Incentive Program

In 2010, eligible providers can earn an incentive payment of 2% for successfully participating in the e-Prescribing Incentive Program. Other changes for 2010 include that a physician only needs to report an e-prescribing code for 25 visits resulting in an electronic prescription to be eligible for the incentive; providers may use qualified electronic health records systems to submit this data; some practices may choose a “group-reporting” option; and prescriptions written for patients in skilled nursing facilities or home-care settings are now eligible for the program.

For more information about all of the above items, and additional changes that may interest you, please visit the Medicare Changes for 2010 page.

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