Medicare Changes for 2010

Medicare’s 2010 final rule confirms that physicians face steep cuts of 21.2% in 2010. Permanent repeal of the flawed sustainable growth rate (SGR) formula is an essential element of comprehensive health system reform. In October, the Senate failed to pass a bill (S. 1776) that would fix the problem, while the House is expected to vote soon on a different bill (H.R. 3961) that would also fix the problem.

The rule includes other changes for EDX physicians as well. A proposal for Medicare to stop accepting consultation codes (99241-99245, 99251-99255) as of January 1, 2010 was finalized and included in the rule. Physicians will instead report the office visit codes (99201-99205, 99211-99215) to Medicare for these services. For inpatients, use hospital care codes (99221-99223) or initial nursing facility care visit (99304-99306) evaluation and management (E/M) codes for the first visit during a patient’s admission to a hospital or nursing facility. In its proposal to eliminate the consultation codes, Medicare cited continued provider dissatisfaction with Medicare documentation requirements, confusion between a consultation and a transfer of care, and similarity in the physician work of consults and office visits, despite the work higher value. The AANEM and many other entities commented in opposition to this change and the fast implementation to no avail.

To maintain budget neutrality the RVUs for other office visit E/M services will be increased proportionately, about 6%. Work RVUs for hospital and nursing facility visits will be increased approximately 2%. The table below shows how the removal of consult codes and subsequent redistribution of value affects key E/M codes.

* Calculated before 21.5% SGR cut is applied. **Inpatient codes have only three corresponding levels of service.

Finally, CMS currently utilizes practice expense (PE) data and physician hours from the 1995-1999 AMA Socioeconomic Monitoring System (SMS) survey to calculate “practice expense per hour” estimation and direct to indirect cost ratio for each specialty. This data and the accompanying PE and malpractice (MP) RVUs are being updated with new survey data from 2007-2008 that was compiled through joint efforts of AMA, CMS, and over 70 national health care organizations. Implementation of these data will redistribute practice expense payment among specialties during a 4-year transition period.

Physical medicine and rehabilitation physicians will receive a 2% increase from transitional practice expense RVU changes in 2010, increasing to a 6% increase in 2013. Neurologists will receive a 1% transitional increase in 2010, culminating in a 4% increase in 2013. As part of the redistribution, a number of other specialties will see net reductions in 2010 through the 2013 transition, as seen in this table.