On November 3, Centers for Medicare & Medicaid Services (CMS) issued a final 2011 Medicare physician fee schedule rule that cuts reimbursement rates by a total of 24.9 percent between November 2010 and January 2011.  Per CMS, physician payment rates will be reduced on December 1, when a congressionally mandated 2.2 percent increase expires, and then again on January 1, 2011, under current law, which is based on a much-maligned sustainable growth rate (SGR) formula.  These two reductions would bring about the 24.9 percent cut set forth in the final fee schedule.  CMS Administrator Donald Berwick commented in an accompanying press release, “Medicare needs to be a strong, dependable partner with physicians—and that means the SGR must be fixed.  The Administration supports permanently reforming the Medicare payment formula.”  The American Medical Association (AMA) issued a statement urging Congress to “take quick action this month to stop the cut before it begins in order to ensure there is no disruption in access to care for seniors.” 

The final rule also implements changes prescribed by the healthcare legislation, e.g., effective January 1, 2011, the new law mandates the waiver of the Medicare Part B deductible and 20 percent coinsurance that would otherwise apply to most preventative services.  In addition, the final rule includes a multiple procedure payment reduction policy for therapy services that will reduce by 25 percent the practice expense component of the second and subsequent therapy services furnished by a single provider to a beneficiary on a single date of service.  CMS stated that this latter policy applies to all outpatient therapy services paid under Part B, including those furnished in office and facility settings.

This final rule is scheduled to be published in the November 29 Federal Register, with an effective date of January 1, 2011, unless otherwise noted.  CMS said it will accept comments on certain aspects of the final rule until January 2, 2011.

About Sam Fish

Sam Fish has over 40 years of legal experience in federal and state human services laws and programs, having joined PCG in 1995 after serving as Chief Counsel, Region I, for the U.S. Department of Health and Human Services for more than 25 years. At PCG, Sam provides legal advice and counsel and has served on many projects that required legal research and interpretation and implementation of many federal and state laws.

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