2008 Medicare Physician Fee Schedule Released

November 16, 2007

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The 2008 Medicare Physician Fee Schedule, effective January 1, includes a number of revisions that directly affect neurologists.

Conversion Factor

Without congressional action, reimbursement rates will be cut by 10.1 percent in 2008: the conversion factor will be lowered to $34.0682 from its 2007 value of $37.8975.

Therapy Standards and Requirements

CMS plans to go ahead in 2008 with dropping recertification requirements for outpatient therapy services at 30-day intervals. The AAN is supportive of this decision. The change should improve patients' access to treatment, reduce administrative burden to physicians, therapists, and office staff, and reduce unnecessary visits for patients.

Payment for IVIG Add-on Code

CMS will continue to pay for preadministration services related to IVIG furnished to patients in physicians' offices in 2008. Payment will be made based on values established for 2007.

Anti-markup and Reassignment Proposals

The AAN strongly opposed the CMS proposal to extend the anti-markup rule to professional component services and to apply it to services performed by part-time employees and independent contractors. Of primary concern was the impact the proposal would have on EMGs and nerve conduction studies.

The final rule would prohibit the markup of both the technical and professional components of diagnostic tests if ordered and billed by a physician or physician practice and performed either by 1) an outside supplier; or 2) outside of the billing physician's office space. Services performed by outside suppliers would generally be services provided by a separate entity. It would not include independent contractor physicians who execute a valid reassignment to the billing group. Thus, if a neurologist provides EMGs or NCSs to another physician practice on a contract basis, and the services are provided in the offices of that other practice, these types of arrangements would not be affected by the new anti-markup rule. The second criterion – that the service be provided in the office - has significant implications for many physician arrangements including those that make use of the "centralized building" exception under the Stark law. It would essentially prohibit the markup of diagnostic tests even if performed by employees of the group unless the service is provided in the office of the physician. "Office" is defined as a place where the physician group provides the full range of physician services they typically provide. Thus, it would not include an off-site facility devoted primarily to imaging services, for example. If a neurology practice provides imaging services in a separate building where it does not furnish the entire range of office-based services, it would have to calculate a "net charge" for those imaging services and its charge to Medicare could not be more than the "net charge." It would not matter that the services are provided by employees of the group practice. Similarly, if a neurology practice contracts with a neuro-imaging specialist to review images via teleradiography from an off-site location, the practice could not mark-up its charge to Medicare. In other words, it would have to charge Medicare whatever it pays the independent contractor physician. If, however, the neuro-imaging specialist reviews images in the office of the billing practice, he/she could reassign billing rights to the practice and the anti-markup rule would not apply.

Physician Quality Reporting Initiative (PQRI)

CMS plans to conduct an evaluation of the inaugural 2007 PQRI program, to include participation rates by specialty/profession, associated trends in clinical performance and beneficiary outcomes, and other observable impacts on participants, the Medicare program, and beneficiaries. This information will be made available to the public, though operational details have not been worked out. The final list of 2008 measures is available on the CMS website, with specifications forthcoming.

In our letter, the AANPA indicated its support for CMS to explore EHR-based submission of measure as an alternative to claims-based reporting. CMS has agreed to this for 2008, stating that it will partner with several self-nominated EHR vendors that CMS selects to develop and test EHR clinical quality data submission.

Budget Neutrality/Five-Year Review Work Adjuster

As in 2007, CMS will again apply a budget neutrality adjustment to the work relative value units (RVUs) in 2008. Its value will be 11.94 percent, slightly higher than its value in 2007. Comments AANPA submitted regarding the 2007 Fee Schedule, and again this year for the 2008 Fee Schedule, asserted our strong belief that any necessary budget neutrality adjustments be made to the conversion factor rather than use of the work adjuster.

Resource-based PE RVUs

Though CMS states in the Final Rule that it agrees with commenters (including AANPA) that the equipment utilization rate should continue to be examined for accuracy, the assumption will remain at 50 percent utilization for equipment in 2008. CMS promises to continue to monitor the appropriateness of the assumption and evaluate whether changes should be proposed in light of available data. The AANPA believes this assumption rate should be increased in order to redistribute practice expense relative values to all services within the resource-based relative value scale (RBRVS).

Telehealth Services

In agreement with the AAN, CMS has elected to add neurobehavioral status exam code 96116 to its list of covered Medicare telehealth services. The agency decided not to include subsequent hospital care of neuropsychological testing on the list of telehealth services, noting that further study is needed.

Anticoagulation Management CPT®: Codes 99363, 99364

Despite the AAN recommendation that CMS distinguish anticoagulation management codes 99363: anticoagulation management (initial 90 days of therapy and each subsequent 90 days of therapy, respectively) as separately billable services, CMS will continue to recognize codes 99363 and 99364 as bundled services in 2008. CMS believes the work represented by CPT codes 99363 and 99364 are inherent in the services captured by the existing Evaluation and Management (E/M) codes and will continue to pay for E/M services as appropriate.

RVU Values
Dollar Values