2010 Medicare Fee Schedule Update

The president signed the Department of Defense Appropriations Act of 2010 which provides for a zero percent (0%) update to the 2010 Medicare Physician Fee Schedule for a two month period. This update is effective with dates of service on January 1, 2010 through February 28, 2010. Due to this action, the Centers for Medicare & Medicaid Services (CMS) has recalculated the 2010 fee schedule.

Fees have NOT been frozen at the 2009 fee schedule!

CMS used 2010 relative value units and geographic adjustment factors multiplied by the 2009 conversion factor to determine the interim 2010 fee schedule. This distinction is important due to CMS’ decision regarding the use of consultation codes.

As you know, consultation codes are not acceptable for billing Medicare patients as of January 1, 2010. According to CMS, the decision regarding consultation codes is budget-neutral because CMS increased the work relative value units for specific evaluation and management codes (E/M) used in lieu of consultation codes (e.g. new patient E/M, established patient E/M office and other outpatient service codes, initial hospital care, initial nursing facility care). By recalculating the 2010 fee schedule based on the 2009 conversion factor, the fee schedule for these codes has been increased. Thus, the decision to exclude consultation codes has NOT been modified for January and February 2010 dates of service.

Further, the increase in payment for the initial preventive physical exam (IPPE) is also noted on the interim fee schedule. The Indiana 2010 January through February fee schedule is available on the National Government Services website here.

Although the 21.2 percent fee schedule reduction is temporarily resolved, at the time this article was written, CMS is continuing to instruct its contractors to hold claims for services paid under the Medicare Physician Fee Schedule (MPFS) for up to the first 10 business days of January (January 1 through January 15) for 2010 dates of service.

CMS believes this action should have minimum impact on provider cash flow because, by law, clean electronic claims are not paid any sooner than 14 calendar days (29 days for paper claims) after the date of receipt. Meanwhile, all claims for services delivered on or before December 31, 2009, will be processed and paid under normal procedures.

The holding of claims allows Medicare contractors time to receive the new, updated payment files and perform necessary testing before paying claims at the new rates. CMS has instructed contractors to begin processing claims at the new rates no later than January 19, 2010. Please note that most contractors are closed on the January 18 Martin Luther King Day holiday. Therefore, even absent a new update, most claims likely would not have been paid any sooner than January 19, 2010, given the aforementioned statutory 14-day payment floor.

CMS has extended the 2010 Annual Participation Enrollment Program end date from January 31, 2010, to March 17, 2010– therefore, the enrollment period now runs from November 13, 2009, through March 17, 2010.

The effective date for any participation status change during the extension, however, remains January 1, 2010, and will be in force for the entire year. Contractors will accept and process any participation elections or withdrawals, made during the extended enrollment period that are received or post-marked on or before March 17, 2010.