Is your urology practice prepared for 2012 Medicare pay cuts?

Participation in PQRS, e-prescribing programs is encouraged


We once again approach the end of the year with the American Medical Association, many legislators, and Health and Human Services Secretary Kathleen Sebelius calling for a permanent fix to the sustainable growth rate formula, with no action by Congress.

The Centers for Medicare & Medicaid Services’ final rule has been published, and the current scheduled payment cut to physicians based on the SGR mandate is 27.4%. This number is less than projected due to a lower use of services, according to CMS data and changes to the geographic practice cost indices (GPCI) update, but represents a cut that should prompt physicians to consider a change in Medicare status, if not to opt out of Medicare altogether.

Prepare for the worst –

Every year for the last 5 years, Congress has managed to delay implementation of the planned drop in Medicare’s conversion factor for a short period. Many are expecting a similar result this year. However, this year, many practices and some private payers, who are expecting cost shifting, are preparing for the cuts in Medicare payments. Unfortunately, as physicians once again face this ridiculous debate, hospitals and ambulatory surgical centers get yet another raise. The increase in angst among those affected by this change is directly related to an ineffective Congress that holds the power to avert this crisis for physicians and their elderly patients. We certainly hope that those predicting no action by Congress are wrong, but we encourage you to prepare for a significant drop in Medicare payment in 2012.

To prepare for a tumultuous year, we recommend that you:

  • increase efficiency and lower costs
  • establish lines of credit
  • improve patient collections
  • your voice heard through donations and direct contact with Congress
  • consider changing your Medicare status to non-participating.

Additionally, Medicare continues to phase in the changes in practice expense values. These changes will amount to a 2% drop in payments for services provided in urology offices in addition to any drops in the conversion factor. Urologists have seen drops in office service payment for the past 2 years and will continue to see proportional drops the next 2 years. The work values for 2012 have also seen a few revisions, as the results from the mandated 5-year review of work values have been included in the final rule. These changes will have a limited effect on most urologists.

Medicare will extend multiple procedure reductions to the professional and technical components for radiology services. For the professional component, Medicare will reduce payments by 25% for the second and subsequent advanced imaging services furnished by the same physician to the same patient in the same session on the same day. Further, Medicare will extend the current 50% reduction for the technical component of same-family services to all radiology services.

The GPCI update is also negative, as the 1.0 work adjustment floor has been removed for all states, with the exception of Alaska. The frontier states of Montana, Wyoming, North Dakota, Nevada, and South Dakota retain a 1.0 floor for the practice expense GPCI. Although many states will not be affected, for those that will decrease, the average drop in GPCI across all states and territories is –1.68%. This aspect of the update is required to be budget neutral.

The Physician Quality Reporting System (PQRS) program will continue in 2012 with a 0.5% bonus for those successfully reporting PQRS measures. The 6-month reporting period for claims and electronic health records reporting has been eliminated. However, for those using a certified data registry, a second 6-month reporting period from July 1, 2012 through Dec. 31, 2012 is still available.

We still recommend that you participate in the program regardless of when you begin. It is clear from current success rates that the best reporting methods require the use of a registry. Medicare will publish a list of certified registries in the summer of 2012. Finally, if practices do not submit satisfactory PQRS reports during 2013, the practice will have payments from Medicare reduced to 98.5% of Medicare-allowed amounts in 2015.

E-prescribing program set for 2012, 2013

The e-prescribing program has been set for both 2012 and 2013 in the final rule. There are two parts to the e-prescribing program. The first is an incentive program that rewards successful providers with a bonus: 1.0% for 2012 and 0.5% for 2013. The second part is a payment adjustment for providers who are not successful; these payment adjustments will be applied as a reduction in all Medicare payments in 2013 (1.5%) and 2014 (2.0%) based on service provided in 2012 and/or 2013.

Participation in the e-prescribing incentive program can be reported as a group, if you have greater than 25 providers in the group, or as an individual regardless of group size. Group participation requires a few additional steps and should be reviewed for each group wishing to participate as such. To participate in the program as an individual, you do not need to sign up; simply submit the G8553 on the same claim for which one of the codes listed in the table (page 40) is reported if you used e-prescribing for at least 25 patients during the calendar year.

There are two kinds of qualified e-prescribing systems. The first is a stand-alone system that can:

  • generate a complete active medication list incorporating electronic data received from applicable pharmacies and pharmacy benefit managers, if available
  • enable eligible professionals to select medications, print prescriptions, and electronically transmit prescriptions, as well as provide notifications (that is, signals to warn the prescriber of possible undesirable or unsafe situations including potentially inappropriate dose or route of administration of a drug, drug-drug interactions, allergy concerns, or warnings and cautions). This functionality must be enabled.

The ability of an e-prescribing system to receive tiered formulary information, if available, would again suffice for this requirement for reporting the electronic prescribing measure during the reporting periods occurring in calendar years 2012 and 2013 until this function is more widely available in the marketplace.

  • information on formulary or tiered formulary medications, patient eligibility, and authorization requirements received electronically from the patient’s drug plan (if available).

The second acceptable e-prescribing system is one included with a certified EHR system. In both cases, the reporting process is the same and must be included on the bill submitted to the payer.

To avoid the payment adjustment for 2013, you needed to either successfully report e-prescribing on at least 25 encounters in 2011 according to the guidelines above, or you will need to submit the supported G8553 on at least 10 claims during the first 6 months of 2012 for any encounter in which e-prescribing is used. To avoid the payment adjustment for 2014, you need to either successfully report e-prescribing on at least 25 encounters in 2012 according to the guidelines above, or submit the supported G8553 on at least 10 claims during the first 6 months of 2013 for any encounter in which e-prescribing is used.

We have provided significant detail on the e-prescribing program because the action you must take is time sensitive. Hopefully, most of you are fully familiar with e-prescribing and PQRS and have complied. We encourage the rest of you to comply now.