Primary Care to Gain Fees: CMS Announces Several Proposals

The big news: CMS is proposing to eliminate the consultation visit codes, and increase the payments for E/M codes that all physicians would now use beginning in 2010. This will shift money – and income – from specialists to primary care physicians. The savings from eliminating the higher paying consultation codes will be shifted to the primary care codes. This is exactly what I’ve been saying would happen, and the administration has been signaling for several months that primary care fees would rise and specialist fees would fall. 


CMS is making several proposals to refine Medicare payments to physicians, which are expected to increase payment rates for primary care services.  The proposals include an update to the practice expense component of physician fees.  For 2010, CMS is proposing to include data about physicians’ practice costs from a new survey, the Physician Practice Information Survey (PPIS), designed and conducted by the American Medical Association. 


In another positive move, CMS is proposing to remove physician-administered drugs from the definition of “physician services” for purposes of computing the physician update formula in anticipation of enactment of legislation to provide fundamental reforms to Medicare physician payments.  While the proposal will not change the projected update for services during CY 2010, CMS projects that it would reduce the number of years in which physicians are projected to experience a negative update.


CMS is proposing to increase the payment rates for the Initial Preventive Physical Exam (IPPE), also called the “Welcome to Medicare” visit to be more in line with payment rates for higher complexity services.  The IPPE benefit was mandated by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 to pay for an initial assessment of key elements of a beneficiary’s health status within six months of the beneficiary’s enrollment in Medicare Part B.  Subsequently, Congress extended the time period for the IPPE benefit to within one year of the beneficiary’s enrollment in Part B.


In addition, CMS is proposing to refine how Medicare recognizes the cost of professional liability insurance in its payment system.  While these changes would have a modest impact, they will promote payment equity by redirecting the portion of Medicare’s payment for professional liability insurance to those physicians that have the highest malpractice costs.


Taken together, refining the practice expenses, eliminating payment for the consultation codes and revising the treatment of malpractice premiums would increase payments to general practitioners, family physicians, internists, and geriatric specialists by between 6 and 8 percent (before taking into account the proposed update and other proposed changes to the fee schedule). The update is the overhanging problem, of course, but is a distinct issue from the differing fees for office visits and consultation visits.


Second proposal:

The proposed rule would also implement provisions in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) that added new Medicare benefit categories for cardiac and pulmonary rehabilitation services, and for chronic kidney disease (CKD) education, beginning January 1, 2010.  



CMS is proposing two changes to address concerns from the Medicare Payment Advisory Commission (MedPAC) and the U.S. Government Accountability Office (GAO) about rapid growth in high cost imaging services.  First, CMS is proposing to reduce payment for services that require the use of expensive equipment which would produce a redistribution of the resulting savings to increase payments for other services, including primary care services.  The current payment rates assume that a physician who owns this type of equipment will use it about 50 percent of the time, but recent survey data suggest this expensive equipment is being used more frequently.  As the use of this type of equipment increases, the per-treatment costs for purchasing, maintaining and operating the expensive equipment declines, making a reduction in payment appropriate.


Second, CMS is proposing to implement a requirement in the MIPPA that suppliers of the technical component of advanced imaging services be accredited beginning January 1, 2012 by designating accrediting organizations (AOs) for these suppliers and utilizing the imaging quality standards that have been developed by the AOs.  The accreditation requirement would apply to mobile units, physicians’ offices, and independent diagnostic testing facilities that create the images, but would not apply to the physician who interprets them.  According to the GAO, spending on advanced imaging services, such as computed tomography (CT), magnetic resonance imaging (MRI), and positron emission tomography (PET), is growing almost twice as fast as spending on other types of imaging services, and is a significant contributor to the rapid growth in health care spending in recent years, but there is little administrative oversight to ensure the quality of care.  In a separate regulatory action, CMS will address suppliers’ accountability, business integrity, physician and technician training, service quality, and performance management. 



The proposed rule contains a number of provisions to promote improvement in quality of care and patient outcomes through revisions to the Electronic Prescribing Incentive Program (e-Prescribing Program) and the Physician Quality Reporting Initiative (PQRI).  Eligible professionals or group practices that meet the requirements of each program in CY 2010 will be eligible for incentive payments for each program equal to 2.0 percent of their total estimated allowed charges for the reporting periods.  CMS is proposing to simplify the reporting requirements for the electronic prescribing measure and to provide eligible professionals with more reporting options.  CMS is also proposing a new process for group practices to be considered successful electronic prescribers. 


In addition, CMS is proposing to add more measures and more measures groups for eligible professionals to report under the PQRI, to provide a mechanism for participants to submit quality measure data from a qualified electronic health record and to create a process for group practices to use for reporting the quality measures.


CMS will accept comments on the proposed rule until August 31, and will respond to all comments in a final rule to be issued by November 1, 2009.  Unless otherwise specified, the new payment rates and policies will apply to services furnished to Medicare beneficiaries on or after January 1, 2010.


For more information on the proposed rule, please see: or


A Fact Sheet providing more information about the e-Prescribing Program and PQRI proposals can be found at: