Medicare releases its final rule on the 2013 physician fee schedule

On November 16, the Centers for Medicare and Medicaid Services (CMS) published the final rule on the 2013 Medicare Physician Fee Schedule, changing the physician fee schedule and other Medicare Part B payment policies and implementing certain provisions of the Affordable Care Act.

The regulation also discusses:

• 2013 Physician Quality Reporting System
• Electronic Prescribing Incentive Program
• Implementation of the Physician Value-Based Payment Modifier

Among the highlights in the final rule:

• In 2013, CMS will pay for new Current Procedural Terminology transitional care management codes, 99495 and 99496, with some small modifications. Based on the relative value units that CMS finalized and assuming that Congress averts the pending 26.5-percent reduction discussed below, code 99495 performed in a facility will pay approximately $135; in a non-facility setting, 99495 will pay approximately $164. Code 99496 performed in a non-facility will pay approximately $231.12, and when performed in a facility setting, it will pay approximately $197.76.
• CMS delayed to July 1, 2013, the effective date of its requirement that a face-to-face visit be a condition of payment for certain high-cost durable medical equipment (DME) covered items. The list included many items that have historically been targets of Medicare fraud as identified by various program integrity experts. The encounter must occur within six months before the written order for the DME. CMS is not mandating additional documentation beyond what the physician or other qualified health professional would normally document during the actual face-to-face encounter.
• CMS is limiting the applicability of the value-based payment modifier to groups of 100 or more eligible professionals during 2015, the first year it will be effective. This means that most family physicians will not have to worry about it for now.

CMS estimates that, all things being equal, family physicians will experience a 7-percent increase in their Medicare allowed charges in 2013 as a result of what is in the final rule.

Unfortunately, that assumes no change in the Medicare conversion factor from 2012. However, as noted in the final rule, the conversion factor under current law will decrease 26.5 percent to approximately $25 (from the current $34.04), effective with dates of service on or after Jan. 1, 2013. That means, unless Congress intervenes in the interim, the drop in the conversion factor will more than wipe out the projected 7-percent increase.

So, there is good news and bad news in the final rule this year. 

–Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians