CMS Issues CY 2012 Physician Fee Schedule Proposed Rule

July 1, 2011

The Centers for Medicare & Medicaid Services (CMS) today issued a proposed rule that would update payment policies and rates for physicians and non-physician practitioners for services paid under the Medicare Physician Fee Schedule (MPFS) in calendar year (CY) 2012.  More than 1 million providers of health services to Medicare beneficiaries are paid under the MPFS.

The proposed rule again projects a steep across-the-board reduction in payment rates, based on a formula– the Sustainable Growth Rate (SGR) formula – that was adopted in the Balanced Budget Act of 1997.  If it goes into effect, Medicare payment rates are projected to be reduced by 29.5 percent for services in 2012.

The proposed rule would update a number of physician incentive programs including the Physician Quality Reporting System, the e-Prescribing Incentive Program and the Electronic Health Records Incentive Program. Additionally, it includes proposed quality and cost measures that would be used in establishing a new value-based modifier that would reward physicians for providing higher quality and more efficient care.  The Affordable Care Act requires CMS to begin making payment adjustments to certain physicians and physician groups on January 1, 2015, and to apply the modifier to all physicians by January 1, 2017.  CMS intends to work closely with physicians to ensure that efforts to improve the quality, safety, and efficiency of care do not have unintended consequences to patient access to care.

CMS will accept comments on the proposed rule until August 30, 2011, and will review and respond to all comments in a final rule to be issued by November 1, 2011.

More details about this proposed rule may be found in the attached press release and fact sheets.  If you have any questions about this announcement, please contact the CMS Office of Legislation at 202-690-8220.

Display Copy can be found at:

Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2012:

The CMS Press Release and Fact Sheets are attached.