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American Academy of Family Physicians
Friday Jun 24, 2011

Medicare RVU proposals: Two out of three ain't bad

On June 6, the Centers for Medicare & Medicaid Services (CMS) published a proposed notice in the Federal Register, in which it laid out its initial decisions related to the Five-Year Review of work relative value units (RVUs) under the Medicare physician fee schedule. Family physicians looking for good news in the proposed notice should find some, except when it comes the valuation of observation care in a hospital.

First, the good news.  CMS stated that it intends to increase the work RVUs for nursing facility discharge services, represented by codes 99315 and 99316. The proposed new values will put these codes on par with the corresponding codes for hospital discharge day services (99238 and 99239).

CMS also proposed to publish increased values for preventive medicine services codes (99381-99397). Although Medicare does not cover these services, many other payers do. The proposed RVUs represent an increase over the current RVUs in each case, reflecting a more appropriate recognition of the value of preventive medicine services. Publication of the new values will provide a basis for other payers to use those values in setting their own fee schedules.

Now for the bad news. In the proposed notice, CMS indicated its intent to maintain the current work RVUs for initial observation care (codes 99218-99220) and to decrease the work RVUs for codes 99234-99236, which include observation admission and discharge on the same date.

CMS’s rationale, as stated in the proposed notice is that “we [CMS] do not believe the work RVUs of the initial observation care codes (99218, 99219, and 99220) should be equivalent (or close) to the initial hospital care codes (99221, 99222, and 99223).” Instead, CMS believes that “the acuity level of the typical patient receiving outpatient observation services would generally be lower than that of the inpatient level" and that "if the patient’s acuity level is determined to be at the level of the inpatient, the patient should be admitted to the hospital as an inpatient.” The CMS recommended values for 99234-99236 are subsequently affected by CMS’s recommendations for 99218-99220.

CMS’s belief that the acuity level of the typical patient receiving outpatient observation services would generally be lower than that of the inpatient level is an assumption, not a documented statement of fact. In reality, hospital inpatient and outpatient status is often as much a function of payment policy as it is patient acuity. That is, hospitals not infrequently declare a patient’s status as “inpatient” or “outpatient” based on what they calculate will be most financially advantageous (e.g., based on a comparison of what Medicare will pay under the outpatient versus inpatient prospective payment systems), which does not necessarily equate to patient acuity.

CMS will not finalize its proposals until this fall, when it publishes the final rule on the 2012 Medicare physician fee schedule, so CMS may yet change its mind with respect to any or all of the above. Whatever CMS finally decides will be reflected in Medicare's payment for the services in 2012.

Saturday Jun 11, 2011

CMS proposes to align eRx and EHR incentive programs

We have previously posted that even though physicians who are participating in the Centers for Medicare & Medicaid Services (CMS) EHR Incentive Program in 2011 are not eligible to receive an incentive under the CMS eRx Incentive Program, they could be subject to a penalty for not participating in the eRx Incentive Program (1 percent for 2012, 1.5 percent for 2013, and 2 percent for 2014). In a proposed rule published in the June 1, 2011, Federal Register, CMS has noted their desire to better align the two programs. This proposed rule is complex but has key provisions of importance to any physician who may be subject to a penalty for failure to participate in the CMS eRx Incentive Program but who intends to participate in the EHR Incentive Program this year.

CMS proposes that use of an EHR meeting the certification requirements for meaningful use will qualify for a hardship exemption under the CMS eRx Incentive Program. CMS is proposing that the eligible professional  must: 

1. Have registered for either the Medicare or Medicaid EHR Incentive Program (for instructions on how to register for one of the EHR Incentive Programs, see the registration page of the EHR Incentive Programs section of the CMS web site); and 

2. Provide identifying information as to the certified EHR technology (as defined at 45 CFR 170.102) that has been adopted for use no later than October 1, 2011, for a hardship exemption to be submitted, which then would be reviewed on a case-by-case basis.

In requesting a significant hardship exemption of the type CMS is proposing, physicians would be attesting to having purchased certified EHR technology (as identified by the certification number and/or serial number) or having the specified certified EHR technology available for immediate use with the intention of using it to qualify for a Medicare or Medicaid EHR incentive payment for 2011.

Because this proposed change would not be finalized before June 30, 2011 (the end of the 2012 eRx payment adjustment reporting period), it would not apply for purposes of reporting the eRx measure for the 2012 eRx payment adjustment. In other words, meeting this new hardship exemption could qualify you for the 1 percent incentive in 2011 and exempt you from the 1.5 percent penalty in 2013, but you will still need to submit 10 claims indicating your use of a qualified eRx system before June 30, 2011 to avoid the off-setting 1 percent penalty for 2012.

In the proposed rule, CMS has suggested additional exemptions for the eRx program. If the rule is implemented, physicians would be able to request consideration for a significant hardship exemption from the 2012 eRx payment adjustment if one of the following circumstances applies:

• The practice is located in a rural area without high speed Internet access.

• The practice is located in an area without sufficient available pharmacies for electronic prescribing.

• The physician has registered to participate in the Medicare or Medicaid EHR Incentive Program and adoption of certified EHR technology.

• The physician lives in an  area where a local, state or federal law or regulation prevents e-prescribing (e.g., such as those prohibiting paperless prescriptions for narcotics). (Must cite law/regulation.)

• The physician has limited prescribing activity. (Must submit number of prescriptions written.)

• The physician has insufficient opportunities to report the electronic prescribing measure due to limitations of the measure's denominator.

The proposed rule would require that you provide the following to CMS by Oct. 1, 2011, to request an exemption:

1. Identifying information such as the TIN, NPI, name, mailing address, and e-mail address of all affected eligible professionals.

2. The significant hardship exemption category(ies) above that apply.

3. A justification statement describing how compliance with the requirement for being a successful electronic prescriber for the 2012 eRx payment adjustment during the reporting period would result in a significant hardship to the eligible professional or group practice.

4. An attestation of the accuracy of the information provided.

CMS proposes to have an online tool for submission of exemptions by Oct. 1, 2011, but should that fail to happen, requests for exemption would need to be submitted by mail and postmarked no later than that date. We will keep you posted on how this works out.

CMS is requesting comments on this proposed rule and particularly on whether the serial number of the EHR product should be required for identification of the certified EHR technology the physician has purchased and adopted to meet the requirements for the EHR incentive program. The AAFP will submit a comment letter about this still overly complex process. You too can provide comments online at www.regulations.gov (enter ID CMS-3248-P to bring up this docket). The rule is open for public comment until July 25, 2011.

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