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Updates to the conversion factor are made annually and are stipulated in a formula established by Congress. Congress is the only body able to authorize changes to the conversion factor or the underlying calculation. The update formula looks at estimates of the percentage change in physician’s fees, the average number of Medicare beneficiaries, growth in the real per capital GDP and the cost of the Medicare program due to changes in law or regulation. These four estimates are used to create a percentage by which the previous year’s conversion factor is modified.
The SGR, however, simply establishes a target rate for growth. The target does not bind actual expenditures. However, if spending exceeds the target, the conversion factor for the following year is reduced. Conversely, if spending falls below the target, the next year will see an increased conversion factor.
The House passed H.R. 3961 repealing the sustainable growth rate (SGR) formula. In 2011 and beyond, Medicare physician payments would be based on the gross domestic product (GDP) plus 2 percent for evaluation and management and preventive services, and the GDP plus 1 percent for all other services. These service categories would apply without regard to the specialty of the physician providing the service
The Senate failed to pass S. 1776, which would have repealed the SGR formula and set the foundation for creating a new Medicare payment update system.
On Dec. 21, the president signed the FY 2010 Defense Appropriations bill that includes a legislative change to the CY 2010 conversion factor, essentially freezing the Medicare conversion factor for 60 days at $36.0846. The bill addresses only the conversion factor; all other 2010 policy changes in the 2010 final
Medicare physician fee schedule became effective on Jan. 1. Due to ongoing healthcare reform negotiations, the Centers for Medicare &Medicaid Services (CMS) announced that it would hold all Part B claims until Jan. 15, and that the Physician Annual Participation Enrollment Program would be extended from Jan. 31 to March 17.
The House bill contains a 5 percent bonus for primary care practitioners if 50 percent of billings are for primary care services (E&M and preventive). The bonus is 10 percent for primary care health professional shortage areas.
The House bill also increases Medicaid payments to providers to
Medicare levels by 2012.
The Senate bill contains a 10 percent bonus for 2011-2015 if at least 60 percent of services performed are primary care-oriented.
The Senate bill does not contain provisions that increase Medicaid payments to providers at Medicare levels
The House bill increases the equipment utilization assumption (used to calculate practice expense relative value units [RVUs]) for advanced diagnostic imaging (diagnostic (MRI), (CT), and nuclear medicine
[including positron emission tomography (PET)], and other services specified by HHS) from 50 percent to 75 percent beginning on Jan.
The Senate bill increases the equipment utilization
assumption for the same services to 65 percent in 2010 , to 75 % in 2013 and to 80 % in 2014. (Note that both bills assume a current 50 % assumption, even though CMS increased the utilization assumption for MRI and CT to 90 percent
The House bill requires a study of practice patterns in advanced diagnostic imaging and radiation oncology services to evaluate physician self-referral and the impact it has on the cost of providing services. The study must be completed by July 1, 2011.
The Senate bill requires physicians referring patients for MRI, CT, PET and other
services specified by HHS relying on the “in-office ancillary services”
exception to the Stark law to inform the patient in writing at the time of the referral that such services may be obtained from persons other
than the referring physician. The physician must also provide a written list of alternative suppliers in the area where the patient
The House and Senate proposals establish a CMS Center for Medicare & Medicaid Payment Innovation (CMI) no later than 2011 to test payment and service delivery models to improve quality and lower costs. HHS is given the authority to expand the duration and scope of these models if certain legislative criteria are met, as well as the authority to publicly report provider performance information
The House bill extends a 2 percent financial incentive for successful
PQRI participation through 2012 and requires HHS to issue timely feedback reports and provide an appeals process.
The Senate bill provides for a 1 % incentive for 2011, 0.5 % incentive for 2012-2014, then penalties for not successfully participating begin in 2015. If a practice successfully participates through a Maintenance of Certification program in reporting years 2011-2013, they receive an additional 0.5 %.
The American Recovery and Reinvestment Act of 2009 (ARRA) included what the Congress and the administration consider a critical component of healthcare reform – a nationwide, interoperable,
secure and private electronic health information system. ARRA contains billions of dollars of incentives to encourage individual clinicians and hospitals to be “meaningful users” of electronic health records (EHR). In late 2009, CMS released a proposed rule and the Office of the National Coordinator released a companion interim final
rule regarding the EHR incentive program mandated in ARRA.
The proposed regulation defines the requirements eligible professionals must meet to be considered "meaningful users" of an EHR system. Eligible professionals who are “meaningful users” of an EHR can be reimbursed for up to $44,000 for adopting a “certified” system under the Medicare incentive program and up to $63,750 under the Medicaid program. Medicare penalties begin in 2015 for those who are not meaningful EHR users. Since the first incentive payments will be available in 2011, a large number of medical groups are expected to begin the transition to EHRs in 2010.
The proposed Stage 1 criteria for meaningful use focus on electronically capturing health information in a coded format, using that information to track key clinical conditions, communicating that information for care coordination purposes, and initiating the reporting of clinical quality measures and public health information.
The proposed criteria for meaningful use are based on a series of specific objectives, each of which is tied to a proposed measure that all EPs and hospitals must meet in order to demonstrate that they are meaningful users of certified EHR technology
CMS proposes 25 objectives/measures for EPs and 23 objectives/measures for eligible hospitals that must be met to be deemed a meaningful EHR user.
In 2011, all of the results for all objectives/measures, including clinical quality measures would be reported by EPs and hospitals to CMS, or for Medicaid EPs and hospitals to the states, through attestation.
In 2012, CMS proposes requiring the direct submission of clinical quality measures to CMS (or to the states for Medicaid EPs and hospitals) through certified EHR technology. CMS recognizes that for clinical quality reporting to become routine, the administrative burden of reporting must be reduced. By using certified EHR technology to report information on clinical quality measures electronically to a health information network, a state, CMS, or a registry, the burden on providers that are gathering the data and transmitting them will be greatly reduced. The burden of generating the necessary information for the provider to then use the information to improve health care quality, efficiency, and patient safety will also be reduced.
The policy goals of meaningful use will be most fully realized by building on findings from Stage 1 and by making full use of the greater proliferation of certified EHR technology and supporting HIT infrastructure that will take place under Stage 1. CMS intends to propose through future rulemaking two additional stages of the criteria for meaningful use.
Stage 2 would expand upon the Stage 1 criteria in the areas of disease management, clinical decision support, medication management, support for patient access to their health information, transitions in care, quality measurement and research, and bi-directional communication with public health agencies.