The Centers for Medicare and Medicaid Services this month issued its final rule governing physician fees for 2011, offering a 10% incentive payment to primary care physicians, but taking away an additional 2% across the board as a result of the statutory requirements of the sustainable growth rate formula.

Unless Congress acts, physician fees under Medicare will be cut by 23% on Dec. 1 as mandated by the SGR; just about 2% more will be cut Jan. 1, bringing the total cut for 2011 to 25%.

Although CMS Administrator Don Berwick has called for a permanent overhaul of the SGR, it was not mentioned in the materials that went out with the new rule. Instead, Dr. Berwick touted the new preventive care benefits that will be covered, and thus reimbursed, as a result of the Affordable Care Act.

Under the final rule, which implements certain ACA provisions, Medicare will pay for an annual wellness visit, “that will allow a physician and patient to develop a closer partnership to improve the patient's long-term health,” said Dr. Berwick in a statement.

“The rule will also eliminate out-of-pocket costs for most preventive services beginning Jan. 1, 2011, reducing barriers to access for many beneficiaries,” he added.

The wellness visit will be paid at the rate of a level 4 office visit for a new patient.

The ACA also provided the primary care bonus, which is separate from the fee cuts. The payment is available to family physicians, general internists, geriatricians, pediatricians, nurse practitioners, clinical nurse specialists, and physician assistants who can show that 60% or more of their Medicare allowable charges were for primary care.

The incentive payments will be made quarterly, based on the services provided in the previous quarter.

A similar 10% quarterly incentive payment will be made in 2011 to general surgeons in Health Professional Shortage Areas.

The fee schedule also implements a provision of the ACA that increases payment for two codes for dual-energy x-ray absorptiometry (DXA) for both 2010 and 2011.

However, CMS decided it would not restore consultation codes for inpatient, outpatient, or nursing facility visits. The consultation codes, which are essential to most physicians who receive referrals, were dropped by Medicare in 2010.

Instead, physicians were told to use new or established office visit codes, initial hospital care codes, or initial nursing facility care codes. At that time, CMS officials said that the codes were no longer necessary, given that the agency had reduced the paperwork burden for consultations.

The final rule for the 2011 fee schedule notes that there is no evidence to support the necessity of the codes, and that coordination of care should not be adversely affected by dropping them.

“If we become aware of such evidence in the future, we would certainly consider whether there is an appropriate policy response to promote more effective coordination of care,” according to the final rule.

The agency said there was no evidence that Medicare beneficiaries had been harmed by the loss of the codes.

However, a survey by the American Medical Association this past summer found that a fifth of physicians had stopped seeing new Medicare patients, and almost 40% were cutting back on information technology purchases because of lost revenue.

The ACA also dictated new requirements for physicians who refer patients to MRI, CT, and PET facilities in which they have an ownership interest. Now, the physician will have to disclose in writing to patients that they can receive the service elsewhere. Referring physicians will also have to provide a list of five alternatives within 25 miles of the physician's office.

Payment for imaging procedures will also be reduced. Previously, CMS reimbursed based on the assumption that equipment was used 100% of the time. That assumption has been changed to 75%.

The ACA also reduced incentives for the Physician Quality Reporting System (formerly known as the Physician Quality Reporting Initiative).

In 2011, physicians will be eligible for an incentive payment equal to 1% of the total Medicare charges during the reporting period. For 2012 through 2014, the payment drops to 0.5% of charges. After 2014, physicians who do not report data could see a 1.5% cut in Medicare fees; the penalty increases each year.

There is a carrot, though. Physicians who use a maintenance of certification program to report PQRS data will get an additional 0.5%.

The incentive payment for e-prescribing in 2011 will be 1% of charges during the calendar year. But in 2012, payments will be reduced if physicians are “not successful e-prescribers,” according to the CMS.

The final fee schedule rule will be published Nov. 29 in the Federal Register.

Medicare Clock Ticks Toward 23% Cut Dec. 1