OVERVIEW:

The Centers for Medicare & Medicaid Services (CMS) issued a final rule with comment for the Medicare Physician Fee Schedule (MPFS) for Calendar Year (CY) 2009 on October 30, 2008.  The final rule implements a number of provisions of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), which became law on July 15, 2008, after the Centers for Medicare & Medicaid Services (CMS) had issued the MPFS proposed rule for CY 2009.  Most of these changes are self-implementing and require only conforming changes, if any, to CMS regulations.  Some provisions require administrative interpretation for implementation.  For those provisions, CMS will accept comments on the rule, and responds to them in a subsequent final rule.

This Fact Sheet summarizes how the applicable MIPPA provisions have been incorporated in the final rule with comment period.  CMS is issuing two additional fact sheets discussing the general provisions and the quality initiatives in the MPFS final rule.

MIPPA CHANGES IN MPFS CY 2009 FINAL RULE WITH COMMENT:

Initial Preventive Physical Examination:

The Initial Preventive Physical Examination (IPPE), or Welcome to Medicare Physical, was created as a new preventive benefit in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA).  When implemented in 2004, the IPPE was subject to the Part B deductible and was only covered if it was furnished to the beneficiary within the first six months of the beneficiary’s enrollment in Medicare Part B. 

In an effort to increase beneficiary access to care, section 101 of the MIPPA waives the deductible for the initial preventive physical examination (IPPE), expands the types of services included in the IPPE to include discussion of end-of-life planning and body mass index assessments.  MIPPA also extends the timeframe for IPPE coverage to 12 months from Part B enrollment. The changes are effective for services on or after January 1, 2009.

Authority To Cover Additional Preventive Services:

The traditional Medicare fee-for-service program covers services that are medically necessary for the diagnosis and treatment of an illness, injury, or malformation of a body part, but has covered preventive services, including screening services that can detect illnesses at an earlier, more treatable phase, only as specifically authorized by statute.  Over the past several years, the menu of preventive services authorized by statute has grown significantly. 

To facilitate this expansion, the MIPPA for the first time authorizes the Secretary of Health and Human Services (HHS) to extend coverage to additional preventive services through the national coverage determination process if:

·        The Secretary determines them to be  reasonable and necessary for the prevention or early detection of an illness or disability;

·        They are recommended with a grade of A or B by the United States Preventive Services Task Force (USPSTF), a task force of the Agency for Healthcare Research and Quality); and

·        They are appropriate for individuals entitled to benefits under Medicare Part A or enrolled under Part B.

This new provision does not automatically affect preventive services that Medicare already covers, such as colorectal cancer screenings or mammograms.  Beginning January 1,  2009, CMS will accept requests for National Coverage Determinations (NCDs) resulting from the new provision.  USPSTF currently has 12 preventive services with a Grade A or B recommendation that may be appropriate for the Medicare population and that are not covered at all.  These services may be found at:

www.preventiveservices.ahrq.gov.

Under CMS’s NCD process, the public will have an opportunity to comment before any changes are made to the CMS list of covered preventive services.

Changes To Physician Fee Schedule Payment Rates:

Section 131 of the MIPPA substitutes a positive update to payment rates under the MPFS of 1.1 percent for the negative update that would have resulted from the application of the statutory formula that includes the sustainable growth rate.  

Section 133(b) of the MIPPA also requires CMS to make a technical change in how a statutorily required budget-neutrality adjustment is applied.  This budget-neutrality adjustment resulted from the increases in relative values that were implemented in 2007 and 2008 as a result of the 5-year review of work RVUs.  CMS previously applied a separate budget-neutrality adjustment to work RVUs, but Section 133(b) of the MIPPA requires that the budget-neutrality adjustment be applied instead to the conversion factor.

While this statutorily required change in how the budget-neutrality adjustment is applied results in a lower conversion factor, it removes the adjustment to the work RVUs, and, therefore, maintains the overall level of payments under the physician fee schedule.

Floor On Geographic Adjustment To The Physician Work Component:

Section 134 of the MIPPA extends the 1.0 floor on the geographic adjustment to the physician work component of the fee schedule through December 31, 2009.  It also establishes a 1.5 floor on the geographic adjustment for physician work in Alaska, beginning January 1, 2009.  The geographic adjustment is a factor used in the formula to calculate payments under the MPFS to reflect state or local regional cost variations.

Ambulance Payment Changes:

Section 146 of the MIPPA increases payments for ground ambulance services furnished during the period July 1, 2008, through December 31, 2009, by 3 percent for services originating in a rural area and by 2 percent for services originating in a non-rural area.  It also establishes a 1½ year “hold harmless” period from July 1, 2008, through December 31, 2009, for air ambulance services originating in an area that was switched from rural to urban under new geographic classifications that took effect January 1, 2007.  This provision of MIPPA was self-executing, but this language incorporates the MIPPA requirements in the Medicare regulations.

Payment for Oxygen Equipment, Supplies, and Maintenance:

Section 144(b) of the MIPPA repeals a provision mandated by the Deficit Reduction Act of 2005 (DRA) which required a supplier of oxygen equipment to transfer title of the equipment to the beneficiary at the end of a 36-month rental period.  MIPPA repealed the transfer of title provision, although Medicare payment for oxygen equipment will continue to be capped at 36 months.  MIPPA requires the supplier that furnishes oxygen equipment during the 36-month rental period continue to furnish the equipment after the rental period ends for any period of medical need for the remainder of the “reasonable useful lifetime” of the equipment.  MIPPA also requires CMS to continue to make payments to suppliers for furnishing oxygen contents after the 36-month rental period ends.  Lastly, MIPPA authorizes CMS to make certain maintenance and servicing payments if these payments are found to be “reasonable and necessary.”  CMS has decided to make certain routine maintenance and servicing payments that it has found to be “reasonable and necessary.”

End-Stage Renal Disease Composite Rate:

Section 153(a) of the MIPPA requires CMS to increase the composite rate payment for most services furnished to beneficiaries with end-stage renal disease (ESRD) by 1 percent, effective for services furnished on or after January 1, 2009, and before January 1, 2010.  The MIPPA also requires that the base composite rate for hospital-based renal dialysis facilities be the same as the base composite rate for independent dialysis facilities and, when applying the geographic index, reflect the labor share based on the labor share otherwise applied for renal dialysis facilities.

Miscellaneous Changes Required By MIPPA:

·        Technical Component of Pathology Services for Hospital Patients - Section 136 of the MIPPA allows independent laboratories to bill Medicare directly for the technical component of physician pathology services furnished to hospital inpatient and outpatients until December 31, 2009, rather than requiring that it be bundled into the payment to the hospital.

• Exceptions to Therapy Caps - Section 141 of the MIPPA extends the exceptions process for therapy caps through December 31, 2009.

·        Enrollment of Speech-Language Pathologists - Section 143 of the MIPPA allows speech-language pathologists to enroll as suppliers of services and permits them to bill Medicare directly for services furnished in private practice settings effective July 1, 2009.

• Clinical Laboratory Fee Schedule Update - Section 145 of the MIPPA sets the clinical laboratory fee schedule update at the Consumer Price Index for all Urban Consumers (CPI-U) minus 0.5 percentage points for each of the calendar years 2009 through 2013, but repeals a competitive bidding demonstration program for clinical laboratory services that had been required under the MMA.

•  Telehealth Services - Section 149 of the MIPPA adds the following new telehealth originating sites:  a hospital-based or CAH-based renal dialysis center (including satellites), a skilled nursing facility (SNF), and a community mental health center (CMHC), effective for services furnished on or after January 1, 2009.

The MPFS CY 2009 Final Rule with Comment will appear in the November 19 Federal Register and will be effective for services on or after January 1, 2009.  Comments on designated provisions must be received by December 29, and CMS will respond in a final rule at a later date.

For more information, see: www.cms.hhs.gov/center/physician.asp.