AGA Summary of 2011 Physician Fee Schedule Proposed Rule

On June 25, 2010, CMS posted a proposed rule that would establish new policies and payment rates for physicians and other providers who are paid under the Medicare physician fee schedule for 2011. In addition, the proposed rule implements many key provisions from recently enacted health-reform legislation, the Affordable Care Act (ACA). 

The rule will be published in the Federal Register on July 13, 2010. 

Medicare Payment Update

CMS has estimated the overall impact of the 2011 update to the physician fee schedule at -6.1 percent, absent Congressional intervention. This negative update is required under the sustainable growth rate formula. Unfortunately, steep payment cuts are still expected on Dec. 1, 2010, if Congress fails to act. The AGA and the Alliance of Specialty Medicine continue to advocate for a long-term solution to fix the flawed Medicare payment formula. The proposed conversion factor for 2011 is $26.6574.
The overall effect of the changes in this proposed fee schedule rule (multiple procedure reduction policy, imaging, Medicare economic index and practice expense transition) on gastroenterology is 0 percent, according to CMS impact analysis. 

June 2010 — Claims Processing Issues

On June 25, the president signed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act into law, which provides a 2.2 percent update for Medicare physician payment rates retroactive from June 1 through Nov. 30, 2010.
CMS has directed Medicare claims administration contractors to discontinue processing claims at the negative update rates and to temporarily hold all claims for services rendered June 1, 2010, and later, until the new 2.2 percent update rates are tested and loaded into the Medicare contractors’ claims processing systems. CMS is expected to begin processing claims at the new rates no later than July 1, 2010. Claims for services rendered prior to June 1, 2010, will continue to be processed and paid as usual.
Claims containing June 2010 dates of service, which have been paid at the negative update rates, will be reprocessed as soon as possible. Claims containing June dates of service that were submitted with charges greater than or equal to the new 2.2 percent update rates will be automatically reprocessed. Affected physicians/providers who submitted claims containing June dates of service with charges less than the 2.2 percent update amount will need to contact their local Medicare contractor to request an adjustment.

Physician Practice Information Survey (PPIS)

During 2007 and 2008, the AMA conducted the Physician Practice Information Survey(PPIS) survey, which was designed to update the specialty-specific practice expense (PE) per hour data used to develop PE relative value units in the physician fee schedule. The PE component of a service compensates physicians for the costs incurred in operating their practices such as rent, utilities, equipment, supplies, and the salaries of nurses, technicians and administrative staff.
The PPIS is a multispecialty, nationally representative PE survey of both physician and non-physician practitioners using a consistent survey instrument and methods highly consistent with those used for the socioeconomic monitoring surveys and the supplemental surveys. The PPIS gathered information from 3,656 respondents across 51 physician specialty and health-care professional groups. The AGA, ASGE, ACG and AASLD participated in this survey process.
This proposed rule continues the transition of the PPIS data for 2011 (50 percent old data and 50 percent PPIS data). GI sees a 1 percent positive impact for 2011 with the PE changes. 

Medicare Economic Index (MEI)

CMS is proposing to rebase and revise the Medicare Economic Index (MEI), a measure of inflation in providing physician services, and incorporate it into the 2011 Medicare physician fee schedule update. The MEI was last rebased and revised in 2003 for purposes of the 2004 Medicare physician fee schedule, and is based on data from 2000.
The MEI changes are budget neutral within the fee schedule, however, the MEI impact on GI is a -1 percent for 2011. Essentially, the more recent cost surveys indicate that a larger portion of the revenue that physicians receive now go to covering costs than “income/physician work.” 

Elimination of the Deductible and Coinsurance for Most Preventive Services

Effective Jan. 1, 2011, the Accountable Care Act (ACA) waives the Part B deductible and the 20 percent coinsurance that would otherwise apply to most preventive services. Specifically, the provision waives both the deductible and coinsurance for Medicare-covered preventive services that have been recommended with a grade of A (“strongly recommends”) or B (“recommends”) from the U.S. Preventive Services Task Force, as well as the initial preventive physician examination and the annual wellness visit.
AGA advocated heavily for this change and is pleased that as part of the ACA, CMS will implement the extension of waiver of deductible to services furnished in connection with or in relation to a colorectal cancer screening test that becomes diagnostic or therapeutic. Section 4104(c) of the ACA amends section 1833(b) of the act to waive the Part B deductible for CRC screening tests that become diagnostic. Specifically, section 1833(b)(1) of the act [as amended by section 4104(c)(2) of the ACA] waives the deductible with respect to a CRC screening test regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter, or other procedure that is furnished in connection with, as a result of, and in the same clinical encounter as a screening test. CMS is proposing that all surgical services furnished on the same date as a planned screening colonoscopy, planned flexible sigmoidoscopy or barium enema be considered to be furnished in connection with, as a result of and in the same clinical encounter as the screening test. CMS also noted that the beneficiary’s annual deductible would likely be met when any surgical procedure (related or not) is furnished on the same day as the scheduled screening test.
CMS is proposing to implement this provision by creating a Healthcare Common Procedure Coding System (HCPCS) modifier that providers and practitioners would append to the diagnostic procedure code that is reported instead of the screening colonoscopy or screening flexible sigmoidoscopy HCPCS code or as a result of the barium enema when the screening test becomes a diagnostic service. Coinsurance would continue to apply to the diagnostic test and to other services furnished in connection with, as a result of and in the same clinical encounter as the screening test. 

Coverage of Annual Wellness Visit Providing a Personalized Prevention Plan

The ACA extends the preventive focus of Medicare coverage, which currently pays for a one-time only initial preventive physical examination (IPPE or the “Welcome to Medicare Examination”) to provide coverage for annual wellness visits during which beneficiaries receive personalized prevention plan services. 
The law requires the annual wellness visit to include at least the following six elements: 
  • Establish or update the individual’s medical and family history.
  • ist individual’s current medical providers and suppliers and all prescribed medications.
  • Record measurements of height, weight, body mass index, blood pressure and other routine measurements.
  • Detect any cognitive impairment.
  • Establish a screening schedule for the next five to 10 years, including screenings appropriate for the general population and any additional screenings that may be appropriate because of the individual patient’s risk factors.
  • Furnish personal health advice and coordinate appropriate referrals and health education.
CMS is proposing to develop separate level II HCPCS codes for the first annual wellness visit, to be paid at the rate of a level four office visit for a new patient (similar to the IPPE), and for the subsequent annual wellness visits, to be paid at the rate of a level four office visit for an established patient.
AGA is pleased that this annual wellness visit will provide a physician the opportunity to discuss CRC screenings with patients. CMS, however, will still not pay for an evaluation and management service prior to a screening colonoscopy.

Increase in Non-Facility PE for GI Tests

AGA’s effort over this past year to update the non-facility PE inputs for several GI diagnostic tests was successful.
CMS has accepted updated PE inputs through the AMA Relative Value Update (RVU) Committee (RUC) process for codes 91132 (electrogastrography, diagnostic, transcutaneous) and 91133 (electrogastrography, diagnostic, transcutaneous; with provocative testing).
CMS also accepted updated PE inputs for code 91038 [esophageal function test, gastroesophageal reflux test with nasal catheter intraluminal impedance electrode(s) placement, recording, analysis and interpretation; prolonged (greater than one hour, up to 24 hours)]. For code 91038, CMS has assumed a useful life of five years for the equipment item "ZEPHR impedance /pH reflux monitoring system with data recorder, software, monitor, workstation and cart."
The RUC also provided recommendations regarding the PE inputs for code 91065 [breath hydrogen test (e.g., for detection of lactase deficiency, fructose intolerance, bacterial overgrowth, or oro-cecal gastrointestinal transit)]. CMS has accepted the recommendations with two modifications — it has folded the two pieces of equipment listed as "quinGas Table-Top Support Stand, 3 Tank" and "Drying Tube, Patient Sample" into the "BreathTrackerDigital SC Instrument" and summed their inputs into one equipment line item. CMS has increased the useful life input of the "BreathTrackerDigital SC Instrument" from seven to eight years. 

Updating Equipment and Supply Price Inputs

CMS is proposing a new policy for updating PE inputs for existing codes. Specifically, CMS is proposing to establish a regular and more transparent process for considering public requests for changes to PE database price inputs for supplies and equipment used in existing codes.
CMS is proposing to act on public requests to update equipment and supply price inputs annually through rulemaking by using the annual physician fee schedule proposed rule released in the summer and the final rule released on or about Nov. 1. Whenever GI codes are on the list for review, AGA will provide updated information to CMS as part of our fee schedule comment letter. 

Potentially Misvalued Codes

Currently, while CMS does assess the AMA RUC-recommended work RVUs to determine if the recommendations constitute appropriate adjustments to the RVUs under the physician fee schedule, the agency states that it intends to establish a more extensive validation process of RVUs in the future. CMS is especially interested in public comments regarding approaches, including the use of time and motion studies, to validate estimates of physician time and intensity that are factored into the work RVUs for services with rapid growth in Medicare expenditures, one of the categories that the statute specifically directs CMS to examine. CMS plans to discuss the validation process in a future physician fee schedule rule once public comments are considered.
In the rule, CMS provides several GI codes that are currently used on the RUC multispecialty points of comparison list that it believes are misvalued and recommends they be surveyed by the RUC for 2011: codes 43235 (upper GI endoscopy, diagnosis), 43239 (upper GI endoscopy, biopsy), 45380 (colonoscopy and biopsy) and 45385 (colonoscopy and polypectomy). AGA plans on surveying these codes as requested. 

Equipment Redundancy

CMS indicated that the ECG, 3-channel (with SpO2, NIBP, temp, resp) (CMS equipment code EQ011) incorporates all of the functionality of the pulse oximeter with printer (CMS equipment code EQ211). Therefore, in HCPCS codes in which the three-channel ECG is present, a pulse oximeter with printer is redundant. On this basis, CMS is proposing to remove the pulse oximeter with printer as an input for the 118 codes that also contain the three-channel ECG. CMS has already made these adjustments in the proposed CY 2011 direct PE database. The effect of this change is that practice expense will decrease for endoscopic procedures performed in the office setting. 

High Cost Supplies

In the calendar year (CY) 2009 proposed rule, CMS proposed a process to update the prices for high-cost supplies priced at $150 or more that are included in the PE inputs for procedures paid under the physician fee schedule PE methodology. In working towards refining a process to update the prices of high-cost supplies, CMS contracted with an independent contractor, L&M Policy Research, to research pricing information for these supplies. As part of this process, the contractor was directed to access the U.S. General Services Administration medical supply schedule to augment the results obtained through review of vendor materials and direct contact with vendors, manufacturers and group practice organizations.
This proposed rule provides a list of supplies and the associated codes for which CMS would like updated pricing. The AGA will contact manufacturers for updated information, in order to provide pricing to CMS as part of our comment letter, on the following items: 
  • Kit, capsule, ESO, endoscopy w-application supplies (ESO), code 91111.
  • Tube, jejunostomy, codes 49441, 49446, 49451, 49452.
  • Kit, capsule endoscopy w-application supplies (M2A), code 91110.
  • Catheter, balloon, ureteral-GI (strictures), codes 43456, 45303, 45340, 45386, 46604.
  • Guidewire, steerable (Transcend), codes 49440, 49441, 49442, 49446, 49450, 49451, 49452, 49460.
  • Sensor, pH capsule (Bravo), code 91035.
  • Catheter, balloon, esophageal or rectal (graded distention test), codes 91040, 91120.

Practice Expense Geographic Adjustment

The proposed rule discusses CMS’ analysis of PE geographic practice cost index (GPCI) data and methods and incorporates new data and GPCI cost share weights as part of the sixth GPCI update proposed for CY 2011. The ACA Act establishes a permanent floor for the PE GPCI for frontier states (currently Montana, Wyoming, Nevada, North Dakota and South Dakota).
The ACA also limits recognition of local differences in employee wages and office rents in the PE GPCIs for CYs 2011 and 2012 as compared to the national average. Localities are held harmless to any decrease in CYs 2011 and 2012 in their PE GPCIs that would result from this alternative methodology. In addition, the ACA requires HHS to analyze current methods of establishing PE GPCIs in order to make adjustments that fairly and reliably distinguish the costs of operating a medical practice in the different fee schedule areas. 
In the rule, CMS acknowledges concerns about the existing 89 GPCI payment localities, noting that any changes to the locality configuration must be made in a budget neutral manner within a state, which can lead to significant redistributions in payments. For many years, CMS has not considered making changes to localities without the support of a state medical association in order to demonstrate consensus for the change among the professionals whose payments would be affected (with some increasing and some decreasing). For the past several years, CMS has been involved in discussions with physician groups and their representatives about recent shifts in relative demographics and economic conditions, most notably within the current California payment locality structure.
CMS has contracted with Acumen to conduct a preliminary study of several options for revising the payment localities on a nationwide basis. In the interim report, Acumen has identified four alternative locality configurations, which would increase the number of localities and separate higher cost areas from rural "rest of state" areas. As a result, payments to urban areas would increase, while rural areas would see a decrease in payment because they would no longer be grouped with higher cost "urbanized" areas. A number of public commenters on the draft report expressed support for the option, which would separate metropolitan statistical areas from statewide localities, because the commenters believed this alternative would improve payment accuracy over the current locality configuration and could mitigate possible payment reductions to rural areas. Therefore, Acumen is conducting a more in-depth analysis of the dollar impacts that would result from the application of this option. 

Physician Self Referral for Certain Imaging Services

The ACA amends the in-office ancillary services exception to the self-referral law as applied to MRI, CT and positron emission tomography to require a physician to disclose to a patient in writing at the time of the referral that there are other suppliers of these imaging services, along with a list of other suppliers in the area in which the patient resides. CMS is proposing to require that the referring physician provide the patient with a list of 10 alternative suppliers within a 25-mile radius of the physician’s office who provide the same imaging services.

Timeframe for Submission of Medicare Claims

To implement the ACA, CMS is proposing that Medicare fee-for-service claims for services furnished on or after Jan. 1, 2010, must be filed no later than one CY after the date of service. This reflects a reduction in the maximum prior timely filing deadline of 15 to 27 months. The current timely filing requirements will continue to apply to claims for services furnished before Jan. 1, 2010, except CMS is proposing that claims for services furnished during the last three months of 2009 must be filed no later than Dec. 31, 2010. 

Physician Quality Reporting Initiative (PQRI)

The ACA has provided bonus money for the Physician Quality Reporting Initiative(PQRI) through 2014, however physicians will face penalties after that time frame if they do not satisfactorily report PQRI measures.
Key proposed changes for 2011 PQRI include: 
  • Adding 20 individual PQRI measures [including new measures for reporting through registries and electronic health records (EHRs)] and one new measures group on which individual EPs may report; none of these measures relate to GI care.
  • Making 12 additional individual PQRI measures available for reporting through EHRs, in addition to the 10 measures already available for EHR reporting.
  • Reducing the reporting sample requirements for claims-based reporting of individual measures from 80 percent to 50 percent, which could lessen the burden on electronic prescribers (EPs) to qualify for incentive payments.
  • Creating a new group practice reporting option (GPRO) that would allow group practices with fewer than 200 EPs to participate, which could broaden the ability of EPs to qualify at the group level (in addition to retaining the existing GPRO model for groups with 200 or more EPs).
  • Providing a 1 percent payment incentive for 2011.
  • Extending PQRI incentive payments for years 2012 through 2014 by providing an incentive payment of 0.5 percent during the applicable reporting period.
  • Implementing PQRI payment penalties beginning in 2015 for EPs (and group practices) that do not satisfactorily report data on quality measures by reducing the fee schedule payment by 1.5 percent in 2015 and 2.0 percent in 2016 and thereafter.
  • Providing timely feedback reports to EPs about satisfactory PQRI reporting, including proposals for interim feedback reports.
  • Creating an informal review process for EPs who wish to have CMS review its determination that an EP has not submitted data for PQRI satisfactorily.
  • Allowing EPs to qualify for an additional 0.5 percent incentive if they satisfactorily report PQRI measures and participate in a maintenance of certification program required for board certification by a recognized physician specialty organization for at least one year and complete a practice assessment as part of that organization’s maintenance of certification program.
  • Establishing the framework for a new physician compare Web site with 2011 PQRI data.
  • Describing CMS’ plans to integrate its reporting on quality measures under PQRI with the reporting elements required by the EHR incentive program.
  • Continuing to allow claims-based, EHR and registry-based reporting; however, CMS states that it will consider significantly limiting the claims-based mechanism of reporting in future program years.

Measures Proposed for 2011

Hepatitis C Measures Group

Measure Title
NQF measure
Hepatitis C: Ribonucleic Acid (RNA) Testing Before Initiating Treatment
Hepatitis C: HCV Genotype Testing Prior to Treatment
Hepatitis C: Antiviral Treatment Prescribed
Hepatitis C: HCV Ribonucleic Acid (RNA) Testing at Week 12 of Treatment
Hepatitis C: Counseling Regarding Risk of Alcohol Consumption
Hepatitis C: Counseling Regarding Use of Contraception Prior to Antiviral Therapy
Hepatitis C: Hepatitis A Vaccination in Patients with HCV
Hepatitis C: Hepatitis B Vaccination in Patients with HCV
Per above, for 2010 PQRI, the AGA Digestive Health Outcomes Registry ™ is qualified for reporting on the hepatitis C measures group for at least 30 patients, two of whom must be Medicare Part B fee-for-service patients. The proposed 2011 rule requires that when this reporting methodology is used, all 30 patients must be Medicare Part B fee-for-service patients. The gastroenterology individual measures and hepatitis C measures group remain in the proposed 2011 PQRI measures. However, four measures are proposed below related to continuity of care that gastroenterologist may wish to report.

New Individual Quality Measures Proposed for 2011 Related to Continuity of Care

Measure title
NQF measure number
Measure Developer
Care Transitions: Reconciled Medication List Received by Discharged Patients (Inpatient Discharges to Home/Self Care or Any Other Site of Care)
Currently under NQF review
Society of Hospital Medicine AMA-PCPI/NCQA
 Care Transitions: Transition Record with Specified Elements Received by Discharged Patients (Inpatient Discharges to Home/Self Care or Any Other Site of Care)
Currently under NQF review
Society of Hospital Medicine AMA-PCPI/NCQA
 Care Transitions: Timely Transmission of Transition Record (Inpatient Discharges to Home/Self Care or Any Other Site of Care)
 Currently under NQF review
 Society of Hospital Medicine AMA-PCPI/NCQA
Care Transitions: Transition Record
with Specified Elements Received by Discharged Patients (Emergency
Department Discharges to
Ambulatory Care [Home/Self Care]
or Home Health Care)
 Currently under NQF review
 Society of Hospital Medicine AMA-PCPI/NCQA
Measures pertaining to gastroenterology proposed for the 2011 PQRI program are: 
  • Measures 84 to 87 and 89 to 90 — treatment and management of hepatitis C.
  • Measure 113 — CRC screening.
  • Measure 124 — health information technology (HIT) — adoption/use of HIT (EHRs).
  • Measure 128 — BMI screening.
  • Measure 183 and 184 — treatment and management of hepatitis C (vaccinations).
  • Measure 185 — endoscopy and polyp surveillance colonoscopy interval in patients with history of adenomatous polyps. 

Electronic Prescribing (eRx) Incentive Program

CMS implemented an e-prescribing program in 2009. Electronic prescribers (EPs) and group practices who are successful EPs for 2011 may earn an incentive payment of 10 percent of the EP’s (or group practice’s) estimated total allowed charges for physician fee schedule provided during the reporting period. Beginning in 2012, the program will impose penalties on EPs who are not successful e-prescribers. 
Key changes under this proposed rule include: 
  • Clarifying that EPs who participate and qualify for the Medicare EHR incentive program (to be established under separate regulations) for CY 2011 may not receive a separate, additional Medicare eRx Incentive Program payment.
  • Clarifying that EPs who receive incentives under the EHR incentive program for calendar year 2011 could still be subject to a penalty applicable in 2012 for not participating and being successful EPs in the eRx incentive program in 2011.
  • Broadening opportunities for group practices with fewer than 200 members to participate in the eRx incentive program as group practices.
  • Establishing criteria for applying the penalty applicable in 2012 or 2013 that EPs (and group practices) may incur if they do not participate successfully in the eRx incentive program in 2011 or 2012, including a proposed process for hardship exemptions. 

Physician Feedback Reports (Resource Utilization Program)

The ACA contained two provisions relevant to the resource utilization program (RUR). Section 3003 continues the confidential feedback program and requires the secretary of HHS, beginning in 2012, to provide reports that compare patterns of resource use of individual physicians to other physicians. In addition, section 3007 of the ACA requires the secretary to apply a separate, budget-neutral payment modifier to the fee-for-service physician fee schedule payment formula. The payment modifier, which will be phased in beginning Jan. 1, 2015, through Jan. 1, 2017, will provide for differential payment under the fee schedule to a physician or groups of physicians, and later, possibly to other eligible professionals, based upon the relative quality and cost of care of their Medicare beneficiaries.
Accordingly, CMS’s goal is to have Medicare physicians receive a confidential feedback report prior to implementation of the payment modifier. CMS views these two provisions as complementary, as they expect the work done for the confidential feedback program under section 3003 of the ACA will inform their implementation of the payment modifier under section 3007 of the ACA. The approach used in the confidential feedback reports will serve as the foundation for implementing the payment modifier. Specifically, throughout future phases of reports under the RUR program, CMS will continue to enhance their measures and methods and improve the content of the reports based on both our research and the feedback of stakeholders before the payment modifier begins to affect physician payments in 2015. CMS will allow input on the RUR reports through rulemaking.
CMS anticipates that reports in phase II of the RUR program will be distributed in the fall of 2010. CMS plans to discontinue their use of commercially available proprietary episode grouping software. CMS also proposes not to include data from PQRI in the reports. Lastly, CMS proposes to distribute reports electronically in phase II. 


CMS will accept comments on the proposed rule until Aug. 24, and will respond to all comments in a final rule to be issued by Nov. 1, 2010. The new payment rates and policies will apply to services furnished to Medicare beneficiaries on or after Jan. 1, 2011.
Updated July 2, 2010