FAQ: 2012 Medicare Physician Fee Schedule

This FAQ was developed December 21, 2011. As further details regarding legislation and administrative claims processing issues emerge, this document will be updated.

December 23, 2011: Legislation Passed Today to Prevent Caps and Cuts for 2 Months.

Practice Administration

Will payments under the physician fee schedule be reduced by 27.4% as of January 1, 2012? 

Congress has not yet taken action to prevent the 27.4% cuts to payment. Congress must pass legislation prior to December 31, 2011, to stop the 27.4% payment cut. If legislation does not pass before the end of the year, the 27.4% fee schedule reductions will go into effect January 1. The Centers for Medicare and Medicaid Services (CMS) has announced that it will hold claims for 10 business days beginning January 1, 2012 (ie, January 1, 2012, through January 17, 2012), to give Congress additional time to pass legislation.

Medicare physician fee schedule claims for services rendered on or before December 31, 2011, are unaffected by the 2012 claims hold and will be processed and paid under normal procedures and time frames. If Congress takes action, the payment reductions will be stopped.

Has APTA placed a 2012 fee schedule calculator and MPPR calculator on its Web site? 

No. APTA has not placed an updated fee schedule and MPPR calculator for 2012 on the Web site. When APTA gets final confirmation of any Congressional action related to the fee schedule, the calculators will be updated.

Should I hold claims until Congress passes legislation? 

This is a business decision that you need to make considering all relevant factors. In the past CMS has held claims for 10 business days to give Congress time to pass legislation. In instances when a fee schedule reduction has gone into effect and was later stopped retroactively by Congress, CMS has made automatic adjustments to claims.

What does an automatic adjustment mean? 

APTA anticipates that Congress may pass legislation that would stop the 27.4% reduction in payment retroactively to January 1, 2012. If CMS paid claims at a rate that incorporates the 27.4% cut, it is likely that the agency will automatically reprocess the claim, determine the amount owed to providers, and pay the amount due to them. In 2003 and 2008 under similar circumstances, CMS made this type of automatic mass adjustment. Based on this experience, APTA does not anticipate that providers will need to resubmit claims paid under the reduced rate. If you submit your claims with charges that include the Medicare fee schedule amount with a 27.4% reduction, you will need to resubmit your claims.

What rates should I charge? 

It is important to establish fee schedule charges that are representative of your costs and would be applicable to all your patients regardless of payer. It is appropriate to establish charges that are above the Medicare fee schedule amount. Be aware that Medicare pays the lower of submitted charges and the Medicare fee schedule amount. Therefore, we advise that you do not lower your rates based on the 27.4% cut. More information about establishing a fee schedule can be found on APTA's Web site.

Congressional Action

What are the chances that an extension will pass before the December 31, 2011, deadline? 

There is no way of knowing for sure that a measure will be passed before Congress adjourns for the year. Though we are carefully optimistic, there is always a possibility that Congress cannot come to an agreement on legislation. Legislators are very aware of the consequences of not extending these benefits and support the initiative to do so. Unfortunately, there is not an agreement on how to pay for these Medicare Extenders and how long they can be “fixed” without looking for a long term solution.

If an extension is not passed until after the deadline, will the changes be retroactive? 

Again, there is no way of knowing for sure how any legislation passed will be written or how it may be interpreted by CMS, but based on previous years, legislation passed after the deadline has had provisions to retroactively pay for the time before passage of the legislation. APTA will educate members on how they must comply with any action or inaction of Congress.

What is APTA doing to prevent the therapy cap and a 27.4% cut in payments from going into place beginning January 1, 2012? 

APTA Government Affairs staff have been meeting with members in both the House and the Senate to maintain awareness for a necessary solution to both of these issues. Though we advocate for a long term solution to both the Sustainable Growth Rate formula and the therapy cap exceptions process (through repeal bill HR 1546/S 829), it is necessary for Congress to prevent the cap and cuts from going into place. Congress must, at the very least, extend both of these into 2012.

What can APTA members do prevent the therapy cap and a 27.4% cut in payments from going into place beginning January 1, 2012? 

Stay up to date on the actions of this issue by joining PTeam at www.apta.org/pteam.

  • Call or e-mail your legislators. For sample letters and easy access to contacting your members of Congress by electronic means or to download and print letters, use APTA's Legislative Action Center.
  • Request that your patients contact Congress on this issue through APTA's Patient Action Center at www.apta.org/patientaction. This site is designed to educate patients on the issue and to provide easy access to form e-mails and letters for them to contact Congress.
  • Keep Your Colleagues Informed. Request that your colleagues take action through APTA's Legislative Action Center and sign up for APTA's Grassroots Network, PTeam.
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