Major Changes Coming to Physician Reimbursement

July 10, 2012

Eight major changes to physician pay are quickly approaching. Here’s a brief overview of each.

Many changes to physician pay loom before us due to recently proposed adjustments to the Medicare Physician Fee Schedule (MPFS), and due to several provisions set forth in the 2010 health law.

In fact, so many changes are proposed, and so many changes are already scheduled to go into effect, that it can be difficult to understand how and when they will affect you.

We’ve broken down eight of the most noteworthy changes to help provide some clarity:

1. Proposed Payment Hikes for Primary-care Physicians

In early July, CMS announced its proposed changes to the MPFS for 2013.

One of the most noteworthy changes is a proposed 7 percent pay increase for family physicians, a 5 percent increase for internists, and a 4 percent increase for geriatricians.

The increases are part of a plan to begin reimbursing primary-care physicians separately for providing successful follow-up care after a Medicare patient’s dismissal from a hospital or nursing-home.

2. Proposed Payment Decreases for Specialists

To fund the above increases for primary-care physicians, CMS lays out a plan to reduce Medicare pay to specialists in 2013. Radiation oncologists, for instance, would experience about a 15 percent pay reduction, according to Medscape.

For more information on proposed payment reductions by specialty, view this handy chart.

3. Value-based Payment Modifier Updates

The proposed rule further spells out how physician pay would be influenced by the value-based payment modifier. In 2015, all physician groups with at least 25 physicians would experience Medicare pay adjustments based on the quality and cost of care they provided in 2013.

The payment modifier is designed to move physicians away from payment based on productivity, such as RVUs, and instead reward physicians for the quality of care they provide.

The initiative is great in theory, but it could also present several challenges for physicians.

4. Alignment of Quality Reporting Programs

The proposed rule also includes steps to better align definitions, measures, and quality reporting requirements across various programs, such as the Physician Quality Reporting System, the eRx Incentive Program, the Medicare and Medicaid EHR Incentive Programs, and the Medicare Shared Savings Program.

“We believe that alignment of these quality reporting programs will lead to greater overall participation in these programs, as well as minimize the reporting burden on eligible professionals,” the rule states.

5. Broader Reimbursement for Telehealth-related Services

Finally, the proposed rule broadens the list of services physicians can be reimbursed for when provided to Medicare patients through telehealth-related technologies. The list includes brief behavioral counseling for alcohol misuse, annual depression screening, and behavioral counseling for obesity.

Take note that items 1 through 5 are proposed changes, and are not final. CMS will accept comments on the proposed rule until September 4, and will respond to them in a final rule with comment period in November.

6. Increase Medicaid Pay

In an effort to encourage physicians to open their doors to the estimated 17 million patients that will gain insurance in 2014 as a result of the Medicaid expansion portion of the 2010 health law, CMS will increase Medicaid pay to primary-care physicians to Medicare levels in 2013 and 2014.

7. Increase Rural Physicians’ Pay

The health law will also increase Medicare payments to rural healthcare providers. For instance, qualified physicians will receive a 10 percent bonus payment for primary-care services provided to Medicare patients from 2011 to 2015.

8. Payment Reforms

Finally, the health law will continue to encourage (and broaden) payment reform initiatives that are focused on rewarding - or penalizing - physicians based on the quality and cost of care they provide.

Such initiatives include accountable care organizations and bundled payments.

What do you think of all of the proposed and scheduled changes to physician pay?