College of American Pathologists
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January 5, 2012  •  Volume 28, Number 1
Next Issue: January 19, 2012
© 2012 College of American Pathologists

In This Issue:

CMS Clarifies Physician Payment Policies
Medicare Extends 2012 Annual Participation Enrollment Period
House-Senate Conference Committee Members

CMS Clarifies Physician Payment Policies

The payroll tax extension legislation that was passed by Congress delayed the 27.4% Medicare pay cut and extended the TC “Grandfather” program for two months. It also extended the floor on the work geographic practice cost index (GPCI) and certain other policies. However, all of the other changes that were included in the Medicare physician payment final rule for 2012 will still take effect.

Medicare 2012 Conversion Factor – Although the legislation provided for a zero percent update to the Medicare conversion factor, the final rule indicated that there would be a 0.18% increase in the conversion factor for budget neutrality and this change will be effective Jan. 1, 2012. The budget neutrality increase is due to CMS adoption of the RVS Update Committee recommendations for misvalued codes. The 2011 conversion factor was $33.9764. The 2012 conversion factor will be $34.0376.

Physicians should expect payment rate changes as numerous changes are being made in the relative value units, GPCIs, electronic prescribing and quality reporting programs, and multiple procedure payment rules for 2012. All of these changes will take effect as scheduled for dates of service beginning Jan. 1, 2012. See details on the changes from AMA.

Claim Submission Delays – CMS also has indicated that because Congress acted so late in 2011 to prevent the SGR cut, claims must still be held for a period of time to allow CMS time to develop the new payment rate files and the Medicare claims administration contractors time to install and test the files. CMS expects that most if not all contractors will be ready to process claims under the revised rates on or before Jan. 18, 2012, which is the end of the 10-business-day claims hold period previously announced, but contractors’ time frames may differ. Contractors are expected to have the new rates posted to their web sites by Jan. 11th.

Physician Work Geographic Adjustment Floor – Current law requires payment rates under the MPFS to be adjusted geographically to reflect area differences in the cost of practice. The following three components of the MPFS payment are adjusted: physician work, practice expense, and malpractice expense. Section 303 of the TPTCCA extends the existing 1.0 floor on the physician work geographic practice cost index, through February 29, 2012, preventing negative adjustments to the work RVUs in many rural areas. As with the physician payment update, this change will be accomplished through a revised 2012 MPFS.

RVU Correction Notice – CMS published in the Jan. 4, 2012, Federal Register a correction notice to the 2012 final rule that modifies the relative values for a number of services. The agency also posted to its web site a revised relative value file reflecting both the corrections and the legislation that stopped the 27.4% cut.

Medicare Extends 2012 Annual Participation Enrollment Period

CMS has extended the 2012 Annual Participation Enrollment Period through Tuesday, February 14, 2012. The enrollment period now runs Monday, November 14, 2011 through Tuesday, February 14, 2012. The effective date for any participation status change during the extension remains Sunday, January 1, 2012, and will be in force for the entire year.

Contractors will accept and process any participation elections or withdrawals made during the extended enrollment period that are post-marked on or before Tuesday, February 14, 2012.

House-Senate Conference Committee Members

When Congress returns to Washington later this month, members of the bi-partisan, bicameral conference committee will have less than two months to negotiate an agreement on extending the payroll tax break and the other high cost programs including a new SGR patch, and extending unemployment insurance benefits for the long term unemployed. Congressional focus on reducing the federal deficit will be an important aspect of the negotiations and will likely factor into whether the programs remain intact, or are redefined; particularly since Republicans and Democrats disagree on possible sources of funding for the programs.

With the temporary extension of these programs set to expire at the end of February, the College has already scheduled meetings with members of the conference committee to discuss the importance of a long term SGR fix and extending the TC Grandfather.

Final Roster of the House-Senate Conference Committee

Senate Democrats
Max Baucus (D-MT)
Jack Reed (D-RI)
Ben Cardin (D-MD)
Bob Casey (D-PA)

House Democrats
Allyson Schwartz (D-PA)
Sandy Levin (D-MI)
Xavier Becerra (D-CA)
Chris Van Hollen (D-MD)
Harry Waxman (D-CA)

Senate Republicans
John Barrasso, (R-WY)
Jon Kyl (R-AZ), Republican Whip
Mike Crapo (R- ID)

House Republicans
Kevin Brady (R-TX)
Nan Hayworth (R-NY)
Tom Reed (R-NY)
Dave Camp (R-MI)
Renee Ellmers (R-NC)
Tom Price (R-GA)
Fred Upton (R-MI)
Greg Walden (R-OR)


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