Family Physicians Can Expect Immediate Changes in Medicare Payment for 2012

Despite Congress' last-minute move to temporarily forestall a 27.4 percent Medicare physician pay cut scheduled to go into effect on Jan. 1, it's important to realize that all other components of the final 2012 Medicare physician fee schedule took effect on that date. That means family physicians likely will notice slight changes in their Medicare payment rates this year.

According to Kent Moore, AAFP's manager of health care financing and delivery systems, "Family physicians will see some positive and negative updates in payments they receive from Medicare in 2012."

Other components of the 2012 physician fee schedule final rule include

"Put all of these items in a basket, shake it up, and most family physicians will see some changes in their payment despite what Congress did on Dec. 23 to avoid that drastic pay cut," said Moore.

One small adjustment that physicians may not even notice is a slight uptick in the Medicare conversion factor -- from $33.98 in 2011 to $34.04 in 2012 -- which amounts to an increase of 6 cents for each RVU assigned to a service provided.

"CMS decided to accept recommendations made by the RUC (AMA/Specialty Society Relative Value Scale Update Committee) regarding misvalued CPT codes, and those decisions resulted in decreases in enough RVUs that an increase in the conversion factor was necessary to maintain budget neutrality," Moore explained.

However, he cautioned, the conversion factor is just one piece of the Medicare payment formula. Even so, for the majority of AAFP members, overall payment changes should be minimal.

Physicians also should be aware that most Medicare contractors will not revise Medicare rates posted on their websites until Jan. 11. Even though contractor time frames may differ, CMS expects most contractors will be ready to process claims with the revised rates on or before Jan. 18. That date marks the end of the 10-business-day claims-holding period CMS announced previously.

In related Medicare payment news, CMS recently published modifications (6-page PDF; About PDFs) to the 2012 fee schedule that correct several typos and errors in the original fee schedule document.

CMS also posted a compilation of 2012 Medicare physician fee schedule relative value files, along with a note explaining that the payment rates are based on current law, which provides for a zero percent update for the period spanning Jan. 1 to Feb. 29.

According to that notice, Medicare payment rates will be updated as quickly as possible "in the event Congress passes legislation to prevent the negative update from going into effect on March 1, 2012."