Physician payment outlook for 2012: déjà vu

Pain Physician. 2012 Jan-Feb;15(1):E27-52.


Physician spending is complex related to national health care spending, government regulations, health care reform, private insurers, physician practice, and patient utilization patterns. In determining payment rates for each service on the fee schedule, the Centers for Medicare and Medicaid Services (CMS) considers the amount of work required to provide a service, expenses related to maintaining a practice, and liability insurance costs. The value of 3 types of resources are adjusted on a yearly basis of the combined total multiplied by a standard dollar amount, called the fee schedules conversion factor, which was $33.98 in 2011, to arrive at the payment amount. This factor will stay almost the same ($34.03) unless a 27.4% cut in the sustainable growth rate (SGR) takes place or CMS enacts further reductions. With a 27.4% cut, the conversion factor will be $24.67 in 2012 after the first 2 months if Congress fails to act. Since the inception of Medicare programs in 1965, several methods have been used to determine the amounts paid to physicians for each covered service. The SGR was enacted in 1997 to determine physician payment updates under Medicare Part B with intent to reduce Medicare physician payment updates to offset the growth and utilization of physician services that exceed gross domestic product (GDP) growth. This is achieved by setting an overall target amount of spending for physicians' services and adjusting payment rates annually to reflect differences between actual spending and the spending target. Since 2002, the SGR has annually recommended reductions in Medicare reimbursements. Payments were cut in 2002 by 4.8%. Since then, Congress has intervened on 13 separate occasions to prevent additional cuts from being imposed. The Medicare physician payment rule of 2012, which is still undergoing revisions -- but considered as the final rule-- is a 1,235 page document, released in November 2011. In this manuscript, we will describe important aspects of the 2012 physician fee schedule which include potentially disvalued services under the physician fee schedule, expansion of the multiple procedure payment reduction (MPPR) policy, establishment of the value-based payment modifier, changes to direct practice expenses (PEs), electronic prescribing, the Physician Quality Reporting System (PQRS), and lab testing signatures, along with their implications. Additionally, the impact of multiple changes on interventional pain management will be described. In conclusion, interventional pain management is facing widespread challenges in the U.S. health care system. A historic reform, which has been passed by Congress and signed into law whose survivability is not quite known yet, is affecting medicine drastically in the United States. Interventional pain management, like other evolving specialties will probably most likely suffer under the new affordable health care law and regulatory burden.

MeSH terms

  • Centers for Medicare and Medicaid Services, U.S. / economics*
  • Centers for Medicare and Medicaid Services, U.S. / trends
  • Fee Schedules / economics*
  • Fee Schedules / trends
  • Health Care Reform / economics
  • Health Care Reform / trends
  • Humans
  • Medicare / economics*
  • Medicare / trends
  • Medicare Payment Advisory Commission / economics*
  • Medicare Payment Advisory Commission / trends
  • Pain Management / economics*
  • Physicians / economics*
  • Reimbursement Mechanisms / economics
  • Reimbursement Mechanisms / trends
  • United States