This Week – July 9, 2011

This Week in Washington D.C.:

  1. CMS Releases Proposed 2012 Medicare Physician Fee Schedule and Related Policy Changes
  2. CMS Releases Proposed 2012 Medicare HOPD and ASC Reimbursement and Related Policy Changes
  3. ACG Urges Federal Deficit Negotiators to Save Lives and Medicare Costs by Promoting Preventive Services in Cost-Effective Health Care Settings

The GI Clinician Faces a 30% Reimbursement Cut & More Quality Reporting
The Centers for Medicare and Medicaid Services (CMS) on July 1 released its proposed rule on 2012 Medicare physician fee schedule (PFS) rates and related payment policies. CMS is required to release its proposed 2012 reimbursement rate to reflect current law. Without new legislation, Medicare providers face 29.5% across-the-board reduction in payments beginning January 2012. This cut is based on the sustainable growth rate (SGR) formula that has required a reduction in Medicare reimbursement eleven times since its enactment. Last year, Congress passed three bills to avert projected Medicare payment cuts, followed by two additional bills to increase Medicare payments from June 2010 to December 2011. As ACG members are well aware, each time Congress intervenes to avert scheduled payment cuts, the scheduled cuts get carried over to the following year. In his FY 2012 proposed budget sent to Congress, President Obama does propose an extension to the current Medicare physician payment rates through December 2013.

According to CMS estimates, the net impact of the 2012 payment changes to gastroenterology is a net zero (assuming Congress averts the 29.5% reduction). However, ACG members should anticipate more quality reporting for the same or lower reimbursement in the future. Many of these proposed policies are pursuant to the health reform law, the Patient Protection and Affordable Care Act passed in March 2010 (now known as the Affordable Care Act or “ACA”).

ACG is currently reviewing the proposed regulation and is preparing comments on these drastic payment reductions and other payment policies impacting clinical gastroenterology.

Physician Quality Reporting System (PQRS). In 2012, providers successfully reporting PQRS measures via claims, a qualified registry, or through a qualified electronic health record (EHR) are eligible to receive an additional bonus of .5% of all Medicare Part B fee for service charges. CMS proposes to keep all PQRS measures from 2011 and add twenty-six additional measures for 2012. CMS will also retain all fourteen PQRS “measure groups” from 2011 and add ten new measure groups. Beginning 2015 Medicare providers will face a 1.5% reimbursement cut for not successfully participating in PQRS and a 2% cut in 2016 and beyond. CMS proposes to use the CY 2013 PQRS reporting period for the 2015 payment adjustment.

The GI clinician may report on any PQRS measure. The most popular measures for gastroenterology among the proposed 2012 PQRS:

• Measures 83-87 and 89. Treatment and management for hepatitis C.
• Measure 113. Colorectal cancer screening. (this is not an endoscopy measure but a verification of screening)
• Measure 124. Health information technology and adoption/use.
• Measure 128. Preventive care and screening: Body mass index screening and follow-up.
• Measure 130. Documentation and verification of current medications in the medical record
• Measure 183 and 184. Treatment and management of hepatitis C (vaccinations).
• Measure 185. Endoscopy and polyp surveillance/surveillance colonoscopy interval in patients with history of adenomatous polyps.
• New Measure for 2012: Barrett’s Esophagus
• New Measure Group for 2012: Assessment, screening, and treatment management for Irritable Bowel Disease (IBD).

Medicare ePrescribing Incentive (eRx) Program. 2012 is the first year in which CMS will be providing a 1% payment incentive to “successful ERx providers” as well as a 1% payment cut for those eligible Medicare providers not participating in the eRx “incentive” program in the 2011 reporting period. To qualify as a “successful eRx provider” in 2013, CMS proposes for the 2012 eRx reporting period to retain the same reporting requirements and specifications as in 2011. To avoid the 2013 payment penalty, CMS instead proposes to eliminate the requirement that the eRx measure be reported only on Medicare claims forms for certain dominator codes. CMS also proposes to retain “hardship exemption” codes in certain circumstances.

Physician Compare Website. The ACA requires CMS to create a plan by 2013 for a “Medicare Physician Compare” website that would ultimately display individual physician performance on quality measures. CMS proposes in this rule to use PQRS measures as the initial performance measurements. CMS also proposes to display successful participation in the Medicare eRx Program as well as the Medicare electronic health record (EHR) “meaningful use” program. Additionally, CMS proposes to post on the website by 2013 the PQRS performance rates for those group practices participating in the group practice or “GPRO” PQRS reporting mechanism.

Medicare EHR “meaningful use” Incentive Program. For eligible Medicare providers participating in the “meaningful use” of health information technology incentive program, CMS proposes to continue allowing participants to “attest” to quality measurers as opposed to reporting clinical quality measure electronically as originally proposed. Providers wising to electronically report clinical quality measures can do so via a newly proposed PQRS-Medicare EHR pilot program beginning in 2012.

Physician Value-Based Payment Modifier. CMS is required by the ACA to implement a “value-based payment modifier” for certain physicians by 2015, as determined by CMS, and all physicians by 2017. CMS proposes to use CY 2013 as the reporting year to implement the 2015 payment adjustment and will provide more details on this payment modifier in future rulemaking. However CMS will begin implementing this “value-based” initiative this year by issuing tailored “physician feedback reports” based on PQRS performance measures as well as resource use and other Medicare cost information to certain successful PQRS providers in four states: Iowa, Kansas, Missouri, and Nebraska. One of the measures on this initial value-based initiative is a Hepatitis C measure (NQF measure # 0584).

CMS views this physician-level modifier as the means to reform the traditional Medicare fee for service system to a payment model measuring health outcomes and costs associated with treating Medicare beneficiaries. CMS will use its current system of providing confidential feedback reports to help design this value-based payment modifier that will ultimately pay Medicare providers different rates for performing the same services. CMS proposes to initially use the common quality measures currently in the PQRS and the Medicare “meaningful use” incentive programs. For the GI Clinician, this includes the colorectal cancer screening (PQRS measure no. 113) and most likely will include outcome measures in future rule making. CMS proposes to use Medicare per capita costs and “episode groupers” as the means to determine the cost-effectiveness component of this value-based modifier.

Review of “Misvalued” Codes. CMS proposes to reform the review process for medical payment codes. Traditionally, the Five-Year Review of Work would list certain codes for the AMA RUC to audit and review. However, the ACA gave CMS additional authority to review certain “misvalued” codes, including high growth and volume codes as well as codes with potentially out-dated value units. CMS now proposes to combine the Five-Year Review of Work with its new authority to review potential “misvalued” codes on a recurring basis. CMS also invites the public to nominate other “misvalued” codes as soon as this year, which would be submitted as comments to the 2012 Medicare PFS final rule. A 2011 start-date affords CMS the opportunity to announce new codes for review under the 2013 Medicare PFS proposed rule.

CMS also proposes that AMA RUC determine whether provider evaluation and management (EM) codes are undervalued. The AMA RUC must review and provide a recommendation for at least one half of these EM codes by July 2012 and the remaining EM codes by July 2013. Even more alarming to GI is the second category of codes CMS proposes the RUV to review: high expenditure procedural codes. CMS chose a list of codes that have not been reviewed since CY 2006 and also have 2010 allowable charges greater than $10 million. CMS requests the AMA RUC to review at least one half of the codes (35) contained on this list of 70 procedural codes by July 2012 so that CMS can make proposals to the 2013 Medicare PFS final rule. Among the codes on this list impacting gastroenterology: 45378 (Diagnostic Colonoscopy) and 43235 (Upper GI Endoscopy, diagnosis).

The 2012 Proposed Medicare Physician Fee Schedule Rule

CMS Releases Proposed Payment Policies for Hospital Outpatient Departments and Ambulatory Surgical Centers
CMS also released on July 1 the 2012 Medicare proposed rule on payment policies for hospital outpatient departments (HOPD) and ambulatory surgical centers (ASCs). This rule provides for a meager .9% positive update for ASCs in 2012.

CMS is proposing to implement ASC quality reporting requirements beginning 2012, based on eight quality measures, in order for an ASC to be eligible for a full update in 2014. The proposed measures include seven surgical and control measures and one healthcare associated infection measure that would be reported through the National Healthcare Safety Network. Six of these proposed measures come from the ASC Quality Collaborative (ASC QC). Beginning 2013, and to be eligible for a full ASC update in 2015, CMS also proposes ASCs report two additional “structural measures”: use of a safe surgery checklist; and volume data for certain high-volume ASC surgical procedures (all patients). This list includes many codes related to gastroenterology such as colorectal cancer screening and codes 40000-49999, among others.

ACG is currently reviewing the proposed regulation and preparing comments. ACG will continue to fight for GI ASCs and other physician-owned facilities.

For the 2014 payment determination, CMS will create quality data codes (QDCs) in order for ASC to report each quality measure via Medicare fee for service claims forms. These measures include:
• Patient Burns (NQF #0263)
• Patient Falls (NQF #0266)
• Wrong Site, Side, Procedure, Implant (NQF #0267)
• Hospital Transfer Admission (NQF #0265)
• Prophylactic IV Antibiotic Timing (NQF #0264)
• Ambulatory Patient with Appropriate Method of Surgical Hair Removal (NQF #0515)
• Prophylactic Antibiotic Selection for Surgical Patients (NQF #0268)- first or second generation Cephalosporin
• Surgical Site Infection Rate (to be reported in 2013 but derived from ASC data in CY 2012)

While ASCs are required to report QDCs on Medicare claims beginning 2012, CMS will not provide guidance on the minimum reporting requirements or what is considered a “successful participant” until the 2013 Medicare PFS proposed rule (due out July 2012). ACG will request that CMS alter this illogical policy.

For the 2015 payment determination, the two additional quality measures include verification of a “safe surgery checklist” and submission of patient volume data for certain high volume codes. The following codes impact gastroenterology (to be reported in 2013 but based on CY 2012 data):
• Codes 40000-49999
• G0104: CRC Screening flexible sigmoidoscopy
• G0101: CRC Screening; high risk individual
• G0121; CRC Screening; not high risk
• C9716: Thermal Anal Lesions by Radiofrequency
• C9724: Endoscopic full thickness placation in gastric cardi using EPS
• C9725: Placement of endorectal intracavitary for high intensity brachytherapy
• 0170T: (code deleted December 2009)

CMS is also soliciting recommendations for future quality measures in the ASC setting, including specific colonoscopy and endoscopy measures.

Physician-Owned Hospitals. The ACA limited expansion of physician-owned hospitals beyond what the hospital was licensed for on March 23, 2010 (the day ACA was signed into law) and also required CMS to propose exceptions to this prohibition on hospital expansion. CMS has previously released regulations on this exception process, outlining the requirements an “applicable hospital” or “high Medicaid facility” must meet to seek an exception. CMS proposes to allow community input on expansion requests and provides other clarifying guidance for hospitals seeking an exception under the “applicable hospital” or “high Medicaid facility” application process.

The 2012 Proposed Medicare HOPD/ASC Rule

ACG Urges Policy Makers to Focus on Prevention and Cost-Effective Healthcare
ACG urged Congressional leadership and Vice President Biden on July 6 to consider Medicare program improvements — and cost savings — by promoting colorectal cancer screening and other health care services delivered in the ASC setting. As these leaders participate in the ongoing federal deficit negotiations, it is important to stress the power of prevention and cost-effective health care when leaders negotiate ways to improve the federal deficit and Medicare’s solvency.

The letter was sent to Republican and Democrat leaders in both the House of Representatives and Senate, as well as Vice President Joe Biden. Please click here to view the letter:

Letter to Policy Makers

ACG will continue to monitor the ongoing discussion on the federal deficit and any proposed changes to the Medicare program.

Please stay tuned for further updates. Please also share and discuss your thoughts with fellow ACG members on the ACG GI Circle. To login and share your comments, visit If you have not yet activated your ACG GI Circle account, please email us at

Contact Brad Conway, VP Public Policy, with any questions or for more information.

Brad Conway