On July 13, 2010, CMS is publishing its proposed rule to update the Medicare physician fee schedule (MPFS) for 2011. The proposed rule addresses a wide variety of Medicare Part B policies, including many policy revisions mandated by the ACA. CMS will accept comments on the proposed rule until August 24, 2010. A summary of the rule is available after the jump:

Among many other things, the proposed rule would:

  • Provide a negative 6.1% update for 2011 under the statutory sustainable growth rate (SGR) formula. Coupled with the expiration of a temporary 2.2% boost in MPFS payments on November 30, 2010 (see summary of related legislation below) and the more than 21% cut that goes into effect December 1, 2010, along with a proposed 0.921 “rescaling factor”/ budget neutrality adjustment, the conversion factor will be reduced by approximately 29% in 2011 unless Congress takes further action.
  • Update several durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program policies, including provisions that: expand Round 2 by adding 21 of the largest metropolitan statistical areas (MSAs); implement a national mail order competitive bidding program for diabetic testing supplies and make other refinements related to the furnishing of diabetes supplies, create an appeals process for suppliers considered to be in breach of contract; and modify policies related to off-the-shelf orthotics, oxygen and oxygen equipment, and reimbursement to grandfathered suppliers. In addition, the rule addresses payment policy for power wheelchairs and oxygen and oxygen equipment outside of competitive bidding.
  • Implement ACA provisions that reduce Medicare payments for certain diagnostic imaging equipment, including assigning a 75% utilization rate assumption to certain expensive diagnostic imaging equipment used in diagnostic CT and MRI services and increases the multiple procedure payment reduction applied to the technical component of certain single session imaging services to contiguous body parts from 25% to 50% for more than one imaging procedure preformed in the same session (CMS also is proposing to apply the MPPR policy across imaging families and not limited to contiguous body areas).  CMS estimates that this provision, along with the equipment utilization change, will save Medicare $160 million in 2011.  In addition, CMS discusses how it will implement the ACA requirement that physicians who refer patients to certain imaging services under the in-office ancillary services exception to the physician self-referral prohibition inform patients of their option to receive these services from other area suppliers and to provide a list of alternative suppliers.
  • Establish a multiple procedure payment reduction (MPPR) policy applicable to certain outpatient therapy services reimbursed under Medicare Part B, under which CMS would apply a 50% payment reduction to the practice expense (PE) component of the second and subsequent therapy services for certain multiple therapy services furnished to a single patient in a single day..
  • Update certain payment policies for Part B drugs, including implementing the ACA provision providing for Medicare payment of biosimilar biological products using the ASP methodology.
  • Implement an ACA requirement that the Secretary periodically review and identify potentially misvalued codes and make appropriate adjustments to the relative values of misvalued services.  As part of this effort, CMS has asked the RUC to review services that fall into five categories: high volume/cost items on the RUC’s "Multi-Specialty Points of Comparison list of procedures, codes with low work values that are reported with multiple units; codes with high volume and low work RVUs; 23 hour stay services, and procedures that were inpatient and have subsequently migrated to the outpatient setting.
  • Base future PE updates for certain high cost supplies (priced at $150 or more) on the U.S. General Services Administration medical supply schedule.
  • Establish the methodology for applying the ACA’s “multi-factor productivity” adjustment to the updates for the ASC, ambulance, clinical laboratory and DMEPOS fee schedules.
  • Update a variety of policies applicable to payment for renal dialysis services furnished by end stage renal disease facilities.
  • Implement ACA provisions that authorize Physician Quality Reporting Initiative incentive payments through calendar year 2014, with a penalty thereafter for eligible professionals who do not provide satisfactory reports, and make revisions to the Electronic Prescribing Incentive Program and the Physician Feedback Program.
  • Implement ACA provisions that eliminate beneficiary coinsurance for most preventive services and expand coverage of certain preventive services.