The legislation recently stopped the 24.9% payment cut from occurring on January 1, 2011. However, CMS announced that the conversion factor used to update payment for next year will be $33.9764 instead of the $36.8729 conversion factor that was in effect in 2010.
The Centers for Medicare and Medicaid Services (CMS) this week released corrected payment amounts for 2011 that incorporate the changes included in the Medicare and Medicaid Extenders Act of 2010 that was signed into law December 15. The legislation stopped the 24.9% payment cut from occurring on January 1, 2011. However, CMS announced that the conversion factor used to update payment for next year will be $33.9764 instead of the $36.8729 conversion factor that was in effect in 2010. The conversion factor is lower for 2011 because CMS is rebasing the Medicare Economic Index (MEI), an inflation index for physician practice costs that is used as part of the formula to calculate the Medicare physician fee schedule rates. To offset the increased practice expense and malpractice relative value units (RVUs), CMS is reducing the 2011 conversion factor by approximately 8% to achieve budget neutrality as required by law. The practical effect of this change will be a slight overall reduction of approximately 2%. However, codes in which the value of the practice expense is high (relative to the total value of the code) may see increases and other codes (with minimal practice expenses) may see a larger decrease. For example, ultrasound (CPT code 97035) received an increase in practice expense from 0.33 units to 0.35 units. Combined with the conversion factor decrease, this results in a decrease in payment of 27 cents. APTA will post a fee schedule calculator to include the new payment amounts early next week on www.apta.org. Also important to physical therapists will be the January 1, 2011, implementation of the multiple procedure payment reduction (MPPR) policy. See the following article for details on the policy and the reduction amounts in office and institutional settings.