Final action was taken early this year to reverse the across-the-board
payment cut to physician services that the Centers for Medicare and Medicaid
Services had announced in its final rule released on Nov. 21, 2005. In
the same final rule, the CMS had adopted College-recommended relative
values for several codes that are new this year.
Because of calculation errors the CMS published in the 2006 proposed
fee schedule, the agency delayed in the final rule practice expense updates
that the CAP supported. Those errors led the CMS to cancel nearly all
proposed changes to the practice expense relative value units.
President Bush’s Feb. 8 signing of the Deficit Reduction Act of 2005
canceled a 4.4 percent cut in Medicare physician fees that began Jan.
1, which allowed the CMS to give its payment contractors the final go-ahead
to begin paying claims this year at 2005 rates. The president’s signature
followed a 216-214 vote on Feb. 1 in the House that gave final approval
to the budget bill, S. 1932.
The bill first won House approval Dec. 19 and Senate approval Dec. 20.
Legislation to cancel the payment cut was delayed late last year when
Senate Democrats used a parliamentary procedure to send the bill back
to the House for a second vote.
The CMS originally announced the 4.4 percent reduction to the Medicare
conversion factor, a result of the sustainable growth rate update formula,
with the release of the final 2006 Medicare physician fee schedule last
November. The CAP and other physician organizations argue that the SGR
is flawed and have lobbied in recent years to replace it with a formula
that accounts more accurately for physicians’ true practice costs. Congress
has averted similar cuts in recent years while efforts continue in the
physician community to overhaul the fee schedule update formula.
The CMS told its contractors in a Feb. 10 transmittal that they could
begin making public the new payment rates and start processing or reprocessing
claims at the higher amounts. The transmittal makes final an earlier version
with a pending directive that said contractors "will have 2 business days
from the date of enactment of the Deficit Reduction Act to begin to process
claims using the new fees as well as begin to reprocess those claims that
were paid under the [Medicare physician fee schedule] at the -4.4 percent
rate." Medicare contractors will automatically reprocess claims submitted
since Jan. 1 and paid at the lower rate; physicians need not resubmit
The final physician fee schedule rule for 2006 adopts CAP-recommended
values for new array-based evaluation codes and a new intraoperative touch
prep examination code ("CPT—What Lies Ahead,"
December 2005). It revises downward slightly the College-recommended value
for an add-on touch prep code for additional sites.
The CAP worked with the American Medical Association CPT editorial panel
to establish new codes in these areas and surveyed CAP members to develop
proposed work values. It then presented the proposed work values to the
AMA/ Medical Societies RVS Update Committee, or RUC, which makes recommendations
to the CMS on RVUs for new and revised codes. The CAP also compiled and
developed for the RUC direct practice expense costs input recommendations
for these new CPT codes, which the CMS uses to determine practice expense
relative value units. The RUC endorsed the values and direct practice
expense costs that the College proposed and forwarded its approved recommendations
to the CMS.
In the Nov. 21, 2005 final rule, the CMS said it has withdrawn its entire
practice expense method proposals from the fee schedule’s Aug. 8 proposed
rule. A practice expense calculation program error that resulted in incorrect
figures across all physician services prompted the decision.
While the CMS did implement practice expense cost inputs for codes new
in 2006, practice expense updates for nearly all physician services—including
several the College supported as the 2006 fee schedule was being developed-have
been put on hold for this year. Specifically, the final rule accepts but
does not implement the following practice expense direct cost changes
for pathology services supported by the College:
- Flow cytometry: The CMS accepted revised practice expense cost inputs
for flow cytometry codes 88184 and 88185 relating to the clinical staff
type and antibody costs, and added a computer, printer, slide stainer,
biohazard hood, and FACS wash assistant to CPT code 88184. A computer
and printer will be added to CPT code 88185.
- In situ hybridization (CPT 88365, 88367, and 88368): In the rule,
the CMS notes the CAP’s comments on the number of DNA probes assigned
to the in situ hybridization codes and agrees to adjust the number for
88367 from 0.75 to 1.5, as the College recommended.
- Refinement of 88355 and 88356: The CAP presented refined practice
expense data to the RUC last year for CPT codes 88355 and 88356. The
CMS accepted the refined inputs, as well as additional cost information
the College submitted.
- Supply and equipment items needing specialty input: The CMS accepted
additional pricing information sought and provided by the CAP for CPT
codes 88184, 88355, and 88356.
Pamela Johnson is CAP assistant director for economic affairs.