Extension of the 2011 Physician Payment Rates and Other Policies

The following article is written by Susan Vecchi-Cedrone, senior research analyst for AdvantEdge Healthcare Solutions.

On Dec. 23, 2011, President Obama signed the Temporary Payroll Tax Cut Continuation Act of 2011 (TPTCCA). The TPTCCA included the extension of the 2011 Medicare physician fee schedule (MPFS) by postponing the SGR reduction of 27.4 percent through the month of February.


While the physician fee schedule will be a zero update, other changes to the RVUs used to calculate the fee schedule rates must be budget neutral and is accomplished by adjusting the 2012 fee schedule. CMS is currently developing the fee schedule and as previously announced, will hold new January 2012 claims for up to 10 business days in order to effectively test and implement the new 2012 MPFS. CMS expects these claims to be processed no later than Jan. 18, 2012, and will be posting the new rates on its website by Jan. 11, 2012.

Some of the key provisions of the TPTCCA that have been extended through Feb. 29, 2012, and will be reflected in the 2012 MPFS are as follows:

  • The 1.0 floor on the physician work component.
  • The ability of independent labs to directly receive Medicare payments for the technical component of pathology services performed for a hospital patient.
  • The 2011 Medicare payment rate for bone mass measurement.
  • The 5 percent Medicare increase for certain mental health services.
  • The exceptions process for outpatient therapy caps.


The TPTCCA also includes and extends through the end of February, the two percentage point payroll tax cut for employees, measures to extend unemployment insurance, and other assistance programs for Medicare beneficiaries and low income individuals.

Congress leadership also chose certain legislators to work on a longer extension, or other resolution, of these provisions. We can also be certain that the future of Medicare will be a hot congressional topic in 2012.


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