Centers for Medicare and Medicaid Services (CMS) released its 2014 Medicare physician fee schedule (PFS) Final Rule. CMS calculates the 2014 Physician Fee Schedule Conversion Factor (CF) to be $27.2006, or a 20.1% reduction from the current CF of $34.0230. Total payments under the fee schedule in 2014 are projected to be at $87 billion, according to CMS. Payments to physicians are calculated primarily on three key factors: the resource-based relative value scale (RBRVS), the geographic practice cost indexes (GPCIs), and the monetary conversion factor (CF).
CMS was scheduled to release the fee schedules on November 1st, but the partial shutdown of the federal government delayed the release until now. While the cut is less draconian than earlier estimates, this still is a significant reduction to the physician fee schedule. Medicare cut payments to providers by 2% - $11 billion – last year in mandatory federal spending cuts under sequestration. And physicians are facing a Medicare pay freeze for a decade under a proposal to repeal the sustainable growth rate formula, which is currently pending in Congress. However, it is highly probable that Congress will intervene. Members on both sides of the aisle have publically stated their objection to any drastic reduction so, hopefully, some agreement will be worked out in the near future. Below are some of the largest percentage increases and decreases by specialties under the most recent proposal.
Specialties that saw the largest decreases were: Diagnostic Testing facility (-11%), Pathology (-6%), Independent Lab (-5%) and Rheumatology (-4%).
The largest increases are going to providers of mental health services. Chiropractic services will see a 12% increase while Clinical Social Workers and Clinical Psychologists will see an 8% gain.
These numbers are in the aggregate and the individual code impact within these specialties may not necessarily reflect these percentage changes. You can find more specific information relating to your specialty in the letter to the Medicare Payment Advisory Commission (MedPAC) regarding the CY 2014 Physician Fee Schedule. Click here to view the full report.
The proposed reduction is independent of anything that is occurring with regard to the Sustainable Growth Rate (SGR) or Sequestration.
