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Medicare/Medicaid Primary Care Payment Increase

October 6, 2010 | Comments Off on Medicare/Medicaid Primary Care Payment Increase
Posted by Beth Christian

While some physicians have expressed concern regarding the negative effect that health care reform will have on their level of reimbursement, others will soon see an increase in reimbursement from the Medicare program if they fit within the definition of a “primary care practitioner.”  Effective January 1, 2011, payments to primary care practitioners will be increased by an amount equal to 10% of the Medicare payment for the service in question.  Physicians who have a primary specialty designation of family medicine, internal medicine, geriatric medicine or pediatric medicine for whom primary care services accounted for at least 60% of their allowed charges will be eligible for the 10% increase.  Eligibility for the increase has also been extended to nurse practitioners, clinical nurse specialists and physician assistants.
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In order to meet the 60% test for primary care services, the physician must bill at least 60% of their allowed charges utilizing the following HCPCS codes:  (i) 99201-99215; (ii) 99304-99340; (iii) 99341-99350.  Practitioners who do not fall within this range will not have an avenue for administrative or judicial review of their inclusion in or exclusion from the primary care practitioner category.  It is notable that ob/gyn services were not included within the definition of primary care services.  While the number of Medicare patients who receive obstetrical services is typically quite low given the nature of the Medicare population, many third party payors categorize ob/gyn physicians as primary care physicians and do not require the patients to obtain a referral from their primary care physician before receiving ob/gyn services.

Certain surgeons may also benefit from a 10% incentive payment, although the category of surgeons that will benefit from these payments is more narrowly defined.  Effective January 1, 2011, a physician who practices as a general surgeon in an area designated as a health professional shortage area will also be able to realize a 10% incentive payment.  For purposes of eligibility for the incentive payment, the term “general surgeon” means a physician who is designated CMS specialty code 02-general surgery as their primary specialty code when they enrolled in the Medicare program.  The incentive payments apply to services that are billed as “major surgical procedures” which are defined as physician services which are surgical procedures for which a 10 day or 90 day global period is used for payment. 

Under the CY 2011 Medicare Physician Fee Schedule proposed rules that were issued on June 25, 2010, CMS has proposed that

a practitioner’s eligibility for incentive payments in CY 2011 will be determined using claims data and the provider’s specialty designation from CY 2009.  For subsequent years, CMS is proposing to revise the list of primary care practitioners on a yearly basis, based on updated data regarding an individual’s specialty designation and the percentage of allowed charges for primary care services.

In addition, Medicaid payment rates to primary care physicians in the primary specialty designations of family medicine, general internal medicine or pediatric medicine will receive a boost in 2013 and 2014.  At that time, the Medicaid payment rates for primary care services will be no less than 100% of Medicare payment rates for such services.  The federal government will provide 100% federal funding to the states to enable them to meet this requirement.  This may be a temporary boost, as both the increase in payment rates and federal funding expire at the end of 2014.  However, even a temporary boost is good news for those primary care physicians who treat Medicaid beneficiaries, as New Jersey’s Medicaid payment rates for physicians have historically been well below the rates paid by Medicare for identical services.

Of course, Congressional action (or inaction) at the end of November may impact the overall reimbursement paid to all physicians under Medicare.  The temporary fix for the 21% Medicare physician payment reduction that went into effect earlier this year is due to expire then.  It will be interesting to see how a lame duck Congress chooses to address this issue.


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