CMS Announces Proposed Changes to Physician Fee Schedule Methodology and Results of Five Year Review

June 27, 2006

CMS Announces Proposed Changes to Physician Fee Schedule Methodology and Results of Five Year Review

On June 21, the Centers for Medicare & Medicaid Services (CMS) issued a notice proposing changes to the Medicare Physician Fee Schedule (MPFS) that CMS states, “will improve the accuracy of payments to physicians for the services they furnish to Medicare beneficiaries.” The proposed notice includes substantial increases for “evaluation and management” services, that is, time and effort that physicians spend with patients in evaluating their condition, and advising and assisting them in managing their health. The changes reflect the recommendations of the Relative Value Update Committee (RUC) of the American Medical Association and their work with the medical specialty societies.

The proposed notice addresses two components of physician payments under the MPFS: (1) a comprehensive review of physician work relative value units (RVUs), as well as (2) a proposed change in the methodology for calculating practice expenses. Other changes in physician payment policy will be addressed in a separate proposed rule to be published at a later date, (this summer). CMS will respond to public comments on both sets of proposals and announce final policies in a final rule to be issued in early November. These proposed changes will apply to payments for services furnished to Medicare beneficiaries effective January 1, 2007.

In the proposed five year review (FYR) rule, CMS accepted the RUC approved values for the five high volume nuclear medicine codes (CPT 78306, 78315, 78465, 78478, 78480) and two cardiovascular stress codes (CPT 93015, 93018). Based on CMS accepting the RUC reviewed values, these codes, with the exception of the two add on codes for wall motion and ejection fraction, are proposed to retain their current work values. CPT 78478 is proposed to be reduced from 0.62 work RVU to 0.50 and CPT 78480 from 0.62 to 0.30. SNM member participation in surveys is highly important in order for the nuclear medicine community to be well represented in the data. While the nuclear cardiology codes will likely experience this slight decrease from these FYR results next year, the good news is that CMS could have reduced more of these high volume codes if the survey data did not support the current values. For this reason, we strongly encourage SNM members to actively participate in these important AMA surveys when requested.

CMS is also proposing a new methodology for calculating practice expenses in this proposed rule. CMS projects minimal to no impact to nuclear medicine in 2007, with a slight decrease (-1%) when fully implemented in 2010 (Table 54). To ease the implementation of the change in the practice expense methodology for physician practices and to ensure continued beneficiary access to services, CMS is proposing a four-year transition to the new practice expense RVUs. The SNM will be analyzing the impact to nuclear medicine on a CPT code-by-code basis and will post an excel worksheet on the SNM coding corner under the Physician Offices Educational materials section. SNM members are encouraged to review the particular code proposed values and their own volumes to assess their individual impact from these proposed changes. Please send any comments to the SNM Public Affairs department so that we might include your comments when the SNM sends our comments to CMS. Comments on these two proposed rules are due to CMS no later than August 21, 2006 at 5 PM eastern time.

The proposed changes to the Physician Fee Schedule and results of the five year review can be downloaded from the CMS website by clicking on the following link: