Medicare 2013 PPFS:
Focus on Primary & Coordinated Patient Care

On July 6, 2012, the Centers for Medicare & Medicaid Services ("CMS") released the 2013 Medicare proposed physician fee schedule ("PPFS"). The 2013 PPFS policies would affect payments for physician services provided on or after January 1, 2013, and continue in effect through the remainder of the year. CMS will be accepting comments on the rule through September 4, 2012, which can be submitted electronically here.

Earlier this year, a CMS analysis revealed that based on the current payment methodology there is a 27% projected decrease in the 2013 physician payment rate. While this adjustment represents a current concern for the healthcare provider community, it is anticipated that additional legislation will postpone any decrease as a function of the sustainable growth rate ("SGR") methodology. Despite the fact that anticipated legislation will likely bar such payment cuts from occurring in 2013, the PPFS rule does offer key insights into the policy-making approach that is moving the healthcare industry in new directions.

Notably, as baby boomers continue to join the ranks of Medicare enrollees at a growth rate of 2% annually,¹ the 2013 proposed Medicare fee schedule reflects a continuing trend in aligning physician reimbursement with the specialties needed for management of chronic disease and preventative care. Based on the proposed relative value changes to procedure codes in the 2013 PPFS, the following specialties are expected to see increased reimbursement for the services they typically provide:

In addition, the proposed rule also introduces procedure codes and related reimbursement to emphasize the need for transitional care and new care models, including the following:

• Post-Discharge Care Coordination

• Additional Care Coordination Suggestions

• Telehealth Services

• Mid-level Providers

Additional changes are proposed in the areas of:

• Multiple procedure payment reduction ("MPPR") for certain cardiovascular and ophthalmology diagnostic services.

• Noteworthy relative value units ("RVU") reductions for intensity modulated radiation treatment ("IMRT") delivery.

• Face-to-face interaction requirements for high-cost durable medical equipment ("DME") covered items.

• A claims-based data requirement for therapy services to report on patient condition and function during the treatment episode.

While the 2013 proposed rule is still in the comment period, there are actionable items to be considered by physician practices, both independent and hospital-owned:

• Assess the volume of projected patients in your area moving onto Medicare rolls - can you accommodate the increased service need in your practice?

• Analyze the current process in your practice to manage post-discharge care - can you adequately address the increased need for post-discharge services?

• Explore your opportunities to provide telehealth services.

• Evaluate the use of non-physician providers within the practice.

• Study your area's population disease management needs by evaluating chronic diagnosis trends.

• Analyze the projected community physician needs of your area by assessing physician specialty availability and population diagnosis trends.

• Explore the possibility of creating new alignment relationships with other providers in your healthcare community to enable you to efficiently respond to the changing reimbursement landscape.

If you have any questions about the information above or would like to discuss your strategic response to the proposed rule with PYA, please contact Linda ClenDening at (800) 270-9629 or Nancy McConnell at (888) 420-9876.


¹National Health Expenditure Projections 2010-2020

²AMA website

Resource: 

CMS fact sheet:  Proposed Policy and Payment Changes to the Medicare Physician Fee Schedule for Calendar Year 2013

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