Here are the highlights of the FINAL RULE. These go into effect for dates of service starting the first working day in January.

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1 CMS Announces Medicare Physician Fee Schedule Final Rule for FY 2011 On November 2, 2010, the Centers for Medicare & Medicaid Services (CMS) posted a final notice for Medicare payments in the physician fee schedule for calendar year (CY) Many of these provisions were specified in Health Reform ( ACA ). The final rule affects physicians and office payment for services paid under the resource- based relative value scale/system (RBRVS), also known as, the Medicare Physician Fee Schedule. Remember that Medicare fee schedule uses three sets of relative values (work, practice expense, malpractice), updated by Geographical Cost Indices for your area. Adjusted relative values are multiplied times the conversion factor to give you your area s allowed amount for a specific code. Thus, relative value changes are one part of the fee schedule; the conversion factor is another major factor that influences the final payment. Here are the highlights of the FINAL RULE. These go into effect for dates of service starting the first working day in January. SGR: The current conversion factor is $ with the 2.2% increase, effective June 1. The projected (but not necessarily final) SGR cut will be on top of the 2010 reduction (which now up to 23.5%), currently delayed until December 1, The conversion factor will then be $ the biggest proposed decrease in the history of Medicare. Congress may change this, but bear in mind- - they are now lame ducks. Practice Expense: CMS continues for the second year (at a 50/50 blend), the phasing- in over four years the implementation of the American Medical Association (AMA) Physician Practice Information Survey (PPIS) data administered in 2007/08 for practice expense (PE) indirect per hour rate. Oncology is also partially subject to surveys done by ASCO, but even that was supposed to just cushion the blow. What is nice is that this year, due to the MEI described in the next section, is that many of our codes RVUs are in fact increased. The Medicare Economic Index: This re- basing for practice expense and malpractice RVUs was proposed and is finalized. For this reason, specialties like Hem- Onc with much practice expense will benefit. For specialties with high Work RVUs, not so much. For our services it looks like a big break:

2 BUT, as you know, CMS giveth and then they always taketh away. So, they are going to cut whatever conversion factor we get by 7.9%, regardless of the fix, by Congress (which they hopefully will fix) yielding lower allowables than it may appear Net- net, depending on the conversion factor, in terms of RVUs, that we will a 0% increase or increase depending upon how you look at life according to Table 101 of the Rule. Radiation will have a 1% decrease overall according to the same table. Related Imaging Codes Get A Cut: Well, of course, this is happening as of July But, what it means is that, as of July 6, there was a cut of 50% for related procedures in the same family of imaging procedures. There are some additional codes that fall into this 72159, 73225, , and , but Rad Onc s luck out in that and are not included in the rule. GPCIs: For several years, including 2010, there was a 1.00 floor on GPCIs in places where the work GPCI fell further than that. Upholding 1.00 was a really cool for some folks. It will not be upheld next year with the following exceptions. Alaska will have a GPCI floor of 1.5. The frontier states will have a practice expense GPCI floor of 1.00 as well as a work GPCI of Frontier states include: Montana, Wyoming, North Dakota, Nevada, South Dakota. Additionally, Medicare used housing data to change everybody s GPCIs. Telehealth Services: To perform telehealth services, there must be two- way communication between provider and patient, plus you must be in HPSA (Health Provider Shortage) area or outside an MSA. Additional services that it is proposed to be allowed in 2011 are

3 (every three days) and every 30 days. For those of you out in the rural areas, you can do this and get the add- on. Physician Extenders: They are sometimes known as NPs and PAs. It is part of next year s rule that they can now perform certification and periodic re- certification for SNF patients. Bone density payment: These will be paid 70% of the 2006 RVUs at the 2006 conversion factor with this year s GPCIs for codes Payment for Biosimilars: Here is the payment formula for drugs that are similar to today s biologics. We will see lots of these in cancer treatment for sure o A biosimilar is a product approved under an abbreviated application for a license of a biological product that relies on a license of another biologic. o The payment for these biosimilar products will be the sum of all ASPs assigned to a biosimilar products divided by all applicable units plus six percent. o CMS (Coding Must Suck) hedged in the Final Rule about whether or not all codes, including the branded biologic, will be in the same J- code. Waiver of Cost Sharing for Preventive Services: The ACA requires that CMS establish regulations that will waive the deductible and coinsurance requirements for some preventive services, including the following (there are others that would not be performed by you): o Annual wellness visits, o Initial preventive physician examination, o Pneumovax, influenza, hepatitis B vaccinations, o PAPs/pelvics, o Prostate screening, o Colorectal screening, even if a screening exam becomes therapeutic (e.g. removal of polyps), o Bone mass assessments, o And, smoking screening and cessation for asymptomatic patients or whose treatment is not affected by smoking. Primary Care Bonus Payments: Primary Care in certain areas is getting a bonus under certain conditions. The ACA (Health Reform)

4 requires that CMS implement a 10% bonus for providers designated as family medicine, internal medicine, geriatrics, pediatrics, or NPPs that furnish primary care services effective January 1, The ACA limits the bonus payments to practitioners whose allowed charges consist of 60% or more of primary care services (codes , , and ) divided by all of the other billed services, excluding (from the final rule) hospital services. Provides may get this bonus in addition to a HPSA bonus. Here s something that is very, very interesting about this part of the upcoming law and that is your Nurse Practitioners and PAs may qualify if that is how they are classified with Medicare (Specialty Codes 50, 89, or 97). So, if they are billing, you should check it out and see if they can get 10% more this coming year. It will be paid by the quarter by CMS. Self- Referral Disclosure Law: Thank goodness CMS modified this requirement. It was truly heinous before and now it is only semi- heinous in the Final Rule. These rules apply to practices that do imaging in terms of CATs, PETs, and MRIs. The following must be provided to the patient at the time of the referral for those services: o A list of FIVE (was 10) alternative suppliers (not a hospital) within a 25- mile radius of the physician s office who provide the same imaging services. o The list must include no less than 5 suppliers, if there are five within 25 miles of your office. o The list must include, name, address, phone number of these suppliers. It was supposed to include distance from your office, but, fortunately, CMS agrees that you do not have a GPS in your brain. o The list is to be given to the patient at the time of referral. o The form was supposed to be signed by the patient and retained in the record. But, in the spirit of paperwork reduction, CMS deleted this in the Final Rule. However, you should have a log, note in the record, or chart stamp to prove that you did it. o Emergency situations are not an exception. o Exceptions include patients who are not on Medicare at the time of the referral.

5 Equipment Utilization Rate: Medicare law requires CMS to implement a 75 percent equipment utilization rate assumption to expensive diagnostic imaging equipment in a non- budget neutral manner for CY 2011, and the changes to PE RVUs will not be transitioned over a period of years. All other codes will remain at the 50 percent equipment assumption rate. In general, the codes affected by the 75 percent utilization rate are PET, CT and MRI codes. Imaging Accreditation (furnishing TC) of Advanced Diagnostic Imaging Services (or lack thereof): CMS did not give further guidance in the final rule. Signatures on Requisitions for Labs Paid Under The Laboratory Fee Schedule. CMS makes a distinction between orders and requisitions. Every lab test must have an order- - - that is the rule. But, if there is a requisition, it must be signed by the ordering provider so that the lab has provider authentication. Drugs: The proposed rule maintains the current average sales price (ASP) + 6% reimbursement for Part B drugs for Part B offices; however, it includes changes to ASP reporting, thresholds, and vial amounts. o Among other provisions, if the manufacturer is late with quarterly reporting, the CMS proposes to update ASPs by carrying over the previously reported manufacturer ASP for applicable national drug code(s) (NDC(s)). This is called the carry over methodology, not to be confused with the hang- over methodology, which is when ASPs are calculated after a night in Vegas (I like this joke so I used it again). The Final Rule does clarify that this will only apply to multi- source drugs. But, manufacturers are still subject to Civil Monetary Penalties, if they make a habit of not submitting ASPs. o CMS also proposes to update the regulations to clearly state that Medicare will not pay for amounts of overfill, i.e. product in excess of the amount reflected on the FDA- approved label. The Medicare allowable is based on actual FDA label, so billing in excess of this constitutes billing for free product, which is and always has been against incident to rules.

6 o Partial quarter ASPs for new drugs were also in the Final Rule. Single- source drugs will be priced at WAC, plus 6% for that quarter and multisource and line extension drugs will be added to the weighted average of applicable NDCs. o CMS also proposes to maintain the applicable threshold percentage for price substitution of WAMP or AMP at 5% for two consecutive quarters, and proposed to make a substitute payment at 103% of AMP. That proposal did not go through yay! The Program Formerly Known As PQRI: Because there is now more permanent funding for PQRI, it is now known as the Physician Quality Reporting SYSTEM. As in prior years, CMS has added to the PQRI program in hopes that more providers will participate for less money. Next year, you get a whopping 1% of your MPFS payments. But, inevitably the hammer is going to fall in 2015, so they need to make it easy. This year, there are about 200 measures these will be finalized by the end of the year. Like last year, there are 2 reporting periods: 6 months and 12 months for claims and registry reporting. Other proposed changes to PQRS applicable to office- based cancer practices include: o Registries: CMS once again emphasized that Registries are the way to go for more accuracy in PQRI data submission there are 45 Registry- only measures. CMS wants to get away from claims submissions ASAP. o Success Criteria: For claims ONLY, you can report on at least 3 measures (if applicable) AND you report on at least 50% of applicable patients, instead of 80%- - - which would still be the rate for EMR/EHR or Registry submission. o Measures Groups: There are still no Measures Groups in cancer. There are some that apply if you perform screening procedures or if you are multi- specialty. You must report consecutive Medicare patients in 2011, not all patients. There is no EHR submission for Measures Groups. o Group Practices: Two types of group practices are proposed to report in First are practices over 200 eligible providers called GPROI. Then there are groups eligible providers called GPROII. To report as a GPROII, you must self- nominate;

7 you must participate in Medicare demonstration projects; be in the first 500 practices to do so after the beginning of the year 2011; and, you must report at least one of GPROII groups, which do not apply to many cancer practices. Sounds pretty impossible to me. o Deleted Cancer Measures: These measures used by cancer folks are leaving (maybe) in 2011: Measures 114 and 115 for Tobacco Use (more later about this); Measure 136 for Melanoma o Measures Reportable by Registry Only: : Melanoma : Pain In Cancer Measures o New Measures: Remember that more can be added Melanoma: Overuse of Radiation in Stages 0-1A Mammography: Reminder System Tobacco: Screening/ Cessation/ Interventions o EHR Reporting: If you have a certified (by CMS) EHR/EMR that can submit data to CMS for you, you can report using your EMR. Last year, there were no measures you could report on that were applicable to cancer practices. This year, there are some that might be: Screening Mammography Colorectal screening EHR Use (duh) Tobacco use and cessation Advance care plan Alcohol screening (on the patients, not the staff) o MOCP (Maintenance of Certification) Adjustment: Certain certifying agencies board- certify physicians and their facilities. If you meet these criteria, it is proposed that, in , an additional incentive 0.5% is offered. This seems to be a very complex process, which means that the certifying organization must submit your data; must inspect and certify your practice; and, you must be in it for one year. MOCP eligible organizations will be announced in Spring 2011.

8 o Public Reporting: the Medicare Compare web site was supposed to be up and running 1/1/2011 with all the PQRS and E- Rx success stats for providers. It is very controversial apparently, so might not happen until 2012 or o Integration of PQRS and Meaningful Use ARRA incentive: Many of the quality measures that are part of the Meaningful Use data set mirror PQRS measures. These measures must a) demonstrate meaningful use of HIT; b) quality of care furnished; and other factors as requested by CMS (in other words, whatever ). This will be more coordinated by 2012, so that duplication is more minimized, says the Final Rule. o Appeals: For the first time in 2011, it is proposed that the determination of whether or not EPs qualify for the incentive may be appealed through an appeal through ever- popular qnetsupport@sdps.org. The provider has 90 days from the date of payment to appeal. Responses will be in writing, but you have no ability to get a redetermination. o Interim Feedback: CMS proposes to provide feedback to participating providers in June 2011 about their PQRI incentive status. Maybe, they should have done this when the incentive was 2%. E- Prescribing: E- prescribing will pay 1% of the providers billed and allowed fee schedule services (all services paid by RVUs) in You may not participate in the ARRA HER/HIT incentive and e- prescribing at the same time in 2011 and thereafter. This is the last year where you will be paid and not penalized is the year that those that should be penalized will be identified. The penalty only exists for those who do not have at least 100 cases in the denominator codes (mostly E/M) by 6/30/2011. o Measures: Exactly the same as in 2010, unless you are reporting under GPROI or GPROII, i.e. as a group practice, which has the same qualifications as listed above. o Reporting period: Calendar year, but data 1/1/2011-6/30/2011 will be used to identify those who should be penalized. So, you must report at least 50% before 6/30/11. o Reporting mechanisms: Registries, claims, or EHR (if you are reporting PQRI this way). Registries and EHR submissions must

9 be received for the 2012 payment determination by August 19, o Hardship exceptions there will be new G- codes for these: Rural practices with no high speed internet OR Providers near pharmacies that do not process e- rx. Believe it or not, this is just an overview of 2023 pages of verbiage. To view the entire rule and RVUs, go to