Medicare Physician Fee Schedule

We are reaching out today to provide an overview of the recently published 2014 Medicare Physician Fee Schedule Final Rule and some legislative developments regarding the future of physician reimbursement for imaging services. SonoSite is committed to not only producing innovative and dynamic equipment but also to be your partner and resource during these changing times in healthcare. We see many advantages for ultrasound used at the point of care in the future of healthcare policy as payments are determined based on the delivery of high quality and cost effective services. Ultrasound is a technology that absolutely lends itself to this paradigm shift.

On Wednesday, November 27th, the Centers for Medicare and Medicaid Services (CMS) released the final rule for the CY 2014 Medicare Physician Fee Schedule. To view this final rule and the addendum tables, please visit:

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices-Items/CMS-1600-FC.html?DLPage=1&DLSort=3&DLSortDir=descending

Most of the major payment policy changes, such as capping office-­‐based services at the hospital or ASC rate, were not adopted. Also, CMS did not move forward in changing any of the costs regarding practice expense inputs for ultrasound rooms. Although CMS did approve changes that they received from the Resource Update Committee (RUC) of the American Medical Association regarding what ultrasound equipment inputs are assigned to certain ultrasound codes. Of most interest to the MSK community is the change in equipment from the Ultrasound Room, to the Portable Ultrasound System for CPT code 76942 – Ultrasound guidance for needle placement – which CMS did finalize. For CY 2014 the relative values assigned to the diagnostic studies held very close to last year.

CMS also finalized the 18 codes that were identified as potentially misvalued services in consultation with Contractor Medical Directors. While for most of these 18 services, this means they have been forwarded to the RUC for potential re-­‐evaluation, for CPT code 76942 -­‐ Ultrasonic guidance for needle placement (e.g., biopsy, aspiration, injection, localization device), imaging supervision and interpretation CMS chose to move forward now, in reducing both the time that the equipment and clinical staff expend in performing the procedure for CY 2014. We understand this CPT code will still be re-­‐evaluated by the RUC for 2015. For CY 2014 the total relative value for global in office will be 2.07 RVUs.

Also, I wanted to share with you information regarding three new CPT codes for Arthrocentesis with Imaging Guidance, when the imaging used is ultrasound that were approved at the October 2013 meeting of the CPT Editorial Panel. These three new codes are by type of joint and, per the American Medicare Association calendar, should now be being surveyed for physician work and practice expenses. We encourage all MSK physicians to work with their medical societies to be a part of this process. These three new CPT codes will be effective starting January 1, 2015.

Outlook for Payment:

Without a change in the law, the conversion factor will be reduced by 20.1 percent for services in 2014. The President’s budget calls for averting these cuts and finding a permanent solution to this problem. The proposed CY 2014 conversion factor is $27.2006, if Congress does not act.

At this time, Congress is considering legislation that will repeal the Sustainable Growth Rate -­‐ SGR methodology and replace it with a new policy. While there is not enough time left in the year to pass this comprehensive policy, a temporary patch for a short period of time to stop this 20.1 percent cut is anticipated. SonoSite will keep you up to date as this develops.

We often hear from physician practices they are very concerned regarding any investments in new equipment with such uncertainty around Medicare payments for next year. We want to assure you that SonoSite will be your partner in working through these various end of year issues with the Medicare program and we are here to work with the physicians and practice regarding ways to improve their level of patient care in such circumstances.

As we do not yet know the outcome for the larger SGR repeal and replace package for the long term future and the short term patch for the 2014 Medicare conversion factor, SonoSite is happy to work with you and your staff to talk with each of you regarding this end of the year outlook and the role of ultrasound in the delivery of high-­‐value healthcare. As soon as we have Congressional action on the 2014 conversion factor, we will release updated reimbursement sheets for all ultrasound procedures.

Sincerely,

Kevin M. Goodwin
President and CEO