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CMS Proposes Changes to Physician Fee Schedule for 2013, Includes Payment Increase for Family Physicians

July 13, 2012 The Center for Medicare and Medicaid Services (CMS) July 6 released a proposed rule for changes to the calendar year (CY) 2013 Physician Fee Schedule (PFS). The proposed rule also includes changes to the Physician Quality Reporting System (PQRS), the Electronic Prescribing (eRx) Incentive Program, the PQRS-Electronic Health Record (EHR) Incentive Pilot, and the CMS Physician Compare Web site. Proposals for implementation of the Physician Value-based Modifier (PVBM) for eligible physician groups also are included in the proposed rule.

The major change proposed is an increase in payments to community physicians or non-physician practitioners for coordination of care in the 30 days following discharge from an inpatient hospital stay, skilled nursing facility, and certain outpatient services.

To pay for the new service, CMS proposes a standard reduction in all other services in order to maintain budget neutrality. This new payment would pay for care coordination services outside of face-to-face encounters.

The proposed rule discusses the implementation of the physician value modifier (VM) which begins in 2015 and will use CY 2013 as the performance period. CMS proposes that groups of 25 or more would be subject to the VM in 2015. Groups can avoid all negative payment adjustments by satisfactory participation in PQRS.

In addition, these groups will have the option to have their VM adjusted based on quality and cost performance. This will make them eligible for positive payment adjustments if deemed high-performing, but will put them at risk for negative adjustments if deemed to be low-performing. Groups that do not meet PQRS reporting requirements will be subject to a payment reduction of 1.0 percent for the VM in addition to a negative 1.5 percent for failing to meet PQRS requirements.

The proposed rule also sets forth CMS’s vision for the future of the Physician Compare Web site. The agency proposes to post performance rates on the quality measures submitted by group practices participating in the PQRS Group Practice Reporting Option (GPRO) and accountable care organizations (ACOs) participating under the Medicare Shared Savings Program, starting with measures submitted in 2013. The agency also wants to post patient experience survey data such as the Clinician and Group Consumer Assessment of Healthcare Providers and Systems (CG-CAHPS) for those group practices.

Additionally, CMS projects a 27 percent cut for Medicare payment rates under the sustainable growth rate (SGR) methodology for CY 2013. Congress has prevented cuts from occurring in the past.

The proposed rule will appear in the July 30 edition of the Federal Register, with comments due Sept. 4. AAMC will submit comments.


Mary Patton Wheatley, M.S.
Director, Health Care Affairs
Telephone: 202-862-6297

Evan Collins, MHA
Specialist, Clinical Operations and Policy
Telephone: 202-828-0552


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806