Medical Device Daily Washington Editor

CMS published the balance of provisions for the Medicare physician fee schedule (PFS) for calendar year 2013, announcing it will move more aggressively toward bundled payments for the PFS, thus potentially complicating specialty care further. The agency reported earlier this month its intent to shift payments toward primary care at the cost of specialty care (Medical Device Daily, Nov. 5, 2012), and the news that bundled payments are likely to become a bigger part of the Part B payment schedule suggests further belt tightening for device-related procedures.

The 483-page document states that one of the drivers behind bundled payments for Part B is that physician familiarity with procedures will reduce the time needed to provide those services, a point CMS said was made by the Medicare Payment Advisory Commission. The agency also cited drops in practice expense as another factor.

As part of the bundling discussion, CMS says that its study of potentially misvalued CPT codes has rendered a list of codes that are "frequently billed together" as well as codes "with low relative values billed in multiples." CMS added that while some codes have been packaged already, "we believe that we now need to move beyond" a repackaging of codes into a more concerted effort to "examine the potential of a larger bundled payment system" under the PFS schedule. The document says that CMS is engaging stakeholders in the discussion with an eye toward engaging stakeholders "that are interested in testing some of these concepts within the PFS."

CMS reminds that under the relative value rule, any adjustments to payments that increase expenditures by more than $20 million have to be offset "to preserve budget neutrality." CMS is accepting comments for consideration until Dec. 31.

The agency says that changes to rules governing the provision of durable medical equipment consists principally of provisions of the Affordable Care Act requiring documentation of a face-to-face encounter as a condition of payment for certain DME items. The agency said it has created a new CPT code, G0454, that will permit billing after a patient consults with a physician's assistant, a nurse practitioner, or a clinical nurse specialist. This is accompanied by a relative value update of 0.18 to cover five minutes of intra-service time and two minutes of post-service time. However, CMS states that CPT G0454 will be cross-walked to a CTP code for office visits.

CMS states that it has become aware that services under CPT code 63650, which covers percutaneous implants of neurostimulator electrode arrays (epidural) is often "furnished in the physician office setting but is not priced in that setting." The rule states that code 63650 "should be reviewed to establish appropriate non-facility inputs," adding that disposable leads make up "a significant resource cost for this service," and hence are separately reportable when those services are handled in a physician's office.

The document says that its new process for evaluating potentially misvalued CPT codes rendered a list of several items, including 33282 and 33284, which address cardiac event recorder implant procedures and removal of event recorder, respectively. As was the case with CPT 63650, these procedures are not priced for non-facility procedures, and CMS indicated that while it is not particularly concerned about the pricing/setting issue for these two codes, it may nonetheless be time for the agency to seek some feedback on the matter in terms of physician relative value units.

CPT code 77336 also showed up on the CMS radar screen thanks to comments addressing the amount of time needed for continuing medical physics consulting. The agency indicated it would consult with the relative value update committee at the American Medical Association (Washington) regarding the issue, but CMS also noted that technological changes "may have altered the direct practice expense" as well.

The document says that CMS's efforts to review a number of codes under the Harvard-valued system has perhaps not gone far enough to deal with codes for surgical services that typically run more than $10 million in billings per year. The agency states that the review process for these legacy codes has not adequately assessed "whether the valuation of global surgical packages reflects the number and level of postoperative services that are typically furnished." CMS cited a "statutory obligation" to identify and review potentially misvalued services, and the document adds that CMS intends to "gather more information on the [evaluation and management] services that are typically furnished with surgical procedures."

SGR pegged at 23% for 2013

CMS offered an estimate for the reductions to the physician fee schedule for calendar year (CY) 2013 in its final Part B fee schedule, stating that its preliminary estimate of the calendar year 2013 SGR is a cut of 19.7%. However, the agency says that the combination of statutory and provisions "that will affect expenditures in CY 2013 relative to CY 2012 are estimated to have an impact on expenditures of -23.3%."

The number is smaller than has been used the past couple of years, with some estimates running at 29% as recently as this past summer (Medical Device Daily, July 19, 2012). Still, the dollar value is likely to approach $25 billion a year, presenting policymakers with an fiscal headache at a time when the fiscal cliff is dominating discussions on Capitol and the White House. Among those fiscal cliff items is the 2% reduction to Medicare spending under budget sequestration.

CMS says that its March estimate of the regulations-only percentage reduction for 2013 was 18.7%, but statutory factors such as enrollment and per-capita GDP changes torqued the numbers somewhat higher, although the agency remarks that enrollment was the dominant factor. Calendar year 2012 is said to have added roughly 5% to the SGR accumulation, with 2011 adding 4.7% to the backlog. The largest addition to the SGR debt was 8.9% in 2010, the document indicates.

The document says fee-for-service (FFS) enrollment under Part B will rise from 46.6 million in 2012 to 48.1 million next year, although Medicare Advantage enrollment absorbed 13.5 million and 14 million, respectively. The net increase in actual FFS enrollment is slightly more than one million, and CMS indicates it expects a GDP growth factor of 0.7%, although that metric is subject to change.

Mark McCarty, 703-268-5690

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