January 09, 2011
Area(s) of Interest: Health Care Reform 

The Centers for Medicare & Medicaid Services recently released a revised 2011 physician fee schedule. The 2.2 percent update that took effect on June 1, 2010, was the starting point for the 2011 payment update. The Medicare and Medicaid Extenders Act of 2010, signed by President Obama in December, established a payment update for 2011 of 0 percent, which means that the 2.2 percent update from last June continues throughout 2011. This payment update replaces the 25 percent pay cut that otherwise would have been imposed due to the sustainable growth rate (SGR) formula.

Although the physician payment rates are not being cut, the final rule included a reweighting of practice expense Relative Value Units (RVU), malpractice RVUs and work RVUs. Other modifications that affect payment are relative values for services that were identified as misvalued, updated data being used in the geographic practices cost indices and multiple procedure payment reductions for therapy and imaging services.

in order to maintain budget neutrality, the numerical value of the conversion factor was set to $33.9764.

These changes may affect the payment physicians will see for 2011, and may result in increases or decreases to individual codes. Some specialties may see more of an impact, as reflected in the impact table from the 2011 final rule.

Physicians are encouraged to use the California Medical Association's Financial Impact Worksheet to determine the impact the RVU and other factors will have on your practice. Medicare fee schedules for 2010 and 2011 are posted on Palmetto GBA's website and can be used for the calculations.

Additional information about these changes is explained in a Centers for Medicare and Medicaid Services transmittal sent to contractors along with the updated files.

CMA is pleased that Congress acted to stop the devastating 25-percent payment cut that physicians faced on Jan. 1, and is exploring a long-term fix to the flawed SGR formula. CMA thanks all county medical societies and physicians for their advocacy to stop the payment cuts.