President Obama Signs the Middle Class Tax Relief and Job Creation Act of 2012
--New Law Includes Physician Update Fix through December 2012--

On Wednesday, February 22, 2012, President Obama signed into law the Middle 
Class Tax Relief and Job Creation Act of 2012 (Job Creation Act).  This new law 
prevents a scheduled payment cut for physicians and other practitioners who 
treat Medicare patients from taking effect on March 1, 2012.  The new law 
extends the current zero percent update for such services through December 31, 
2012.  President Obama remains committed to a permanent solution to eliminating 
the Sustainable Growth Rate reductions, which result from the existing 
statutory methodology.  The Administration will continue to work with Congress 
to achieve this goal, as well as implement the policies in the Affordable Care 
Act to move toward a patient-centered, quality oriented system.

The new law extends several provisions of the Temporary Payroll Tax Cut 
Continuation Act of 2011 (Continuation Act).  Specifically, the following 
Medicare fee-for-service policies have been extended.  We also have included 
Medicare billing and claims processing information associated with the new 
legislation.  Please note that these provisions do not reflect all of the 
Medicare provisions in the new law, as some provisions are effective later in 
the year and more information about those provisions will be forthcoming.

Section 3003 - Physician Payment Update - The new law extends the current zero 
percent update for claims with dates of service on or after March 1, 2012, 
through December 31, 2012.  However, the new law does not extend Sections 307 
and 309 of the Continuation Act, the five percent physician fee schedule mental 
health add-on payment and the special 2011 payment rates for bone mass 
measurement, respectively.  The Centers for Medicare & Medicaid Services (CMS) 
is currently revising the 2012 Medicare Physician Fee Schedule (MPFS) to 
reflect the expiration of both of these provisions.  In order to allow 
sufficient time to develop, test, and implement the revised MPFS, Medicare 
claims administration contractors may hold mental health and bone density 
claims with March 2012 dates of service for up to 10 business days.  We expect 
these claims to be released into processing no later than March 15, 2012.  
Other March 2012 claims will be unaffected by this claim hold.  Claims with 
dates of service prior to March 1, 2012, also are unaffected.  Finally, 
Medicare contractors will be posting the new mental health and bone density 
rates on their websites no later than March 15, 2012.

Section 3004 - Extension of Medicare Physician Work Geographic Adjustment Floor 
- The existing 1.0 floor on the physician work geographic practice cost index 
is extended through December 31, 2012.  As with the physician payment update, 
this extension will be reflected in the revised 2012 MPFS.

Section 3001 - Extension of Medicare Modernization Act Section 508 
Reclassifications -
Section 3001 extends Section 508 reclassifications and certain special 
exception wage indexes from December 1, 2011, through March 31, 2012.  For the 
period beginning on December 1, 2011, and ending on March 31, 2012, section 
3001 also requires (as did section 302 of the Continuation Act) removing 
Section 508 and special exception wage data from the calculation of the 
reclassified wage index if doing so raises the reclassified wage index.  All 
hospitals receiving section 508 reclassifications and inpatient special 
exception reclassifications under the Continuation Act and the Job Creation Act 
shall be assigned a special wage index effective for October 2011 through March 
2012.  We will apply these provisions to both inpatient and outpatient hospital 
payments.  A special wage index will be applicable, from January 1, 2012, 
through June 30, 2012, for hospital outpatient payments, to special exception 
hospitals and reclassified hospitals affected by these extensions.  Hospital 
inpatient and outpatient payments under both section 302 of the Continuation 
Act and section 3001 of the Job Creation Act will be made by June 30, 2012.

Section 3002 - Extension of Outpatient Hold Harmless Payments - Section 3002 
extends outpatient hold harmless payments for rural hospitals and sole 
community hospitals with 100 or fewer beds through December 31, 2012.  However, 
hold harmless payments for sole community hospitals with more than 100 beds 
were not extended by this provision and are set to expire on February 29, 2012.

Section 3005 - Extension of Exceptions Process for Medicare Therapy Services - 
Section 3005 extends the exceptions process for outpatient therapy caps from 
March 1, 2012, until December 31, 2012, with some modifications to current 
therapy policies.  Providers of outpatient therapy services are required to 
submit the KX modifier on their therapy claims, when an exception to the cap is 
requested for medically necessary services furnished through December 31, 2012. 
 In addition, the new law includes changes related to therapy services 
furnished in a hospital outpatient department (OPD).  These changes impact the 
annual therapy cap in 2012 as well as the applicability of the therapy cap 
exception process.  More information about the changes affecting hospital OPDs 
will be forthcoming in a future issuance.  Additional information about the 
exception process for therapy services may be found in the Medicare Claims 
Processing Manual, Pub.100-04, Chapter 5, Section 10.3: 
http://www.cms.gov/manuals/downloads/clm104c05.pdf.



The therapy caps are determined for a beneficiary on a calendar year basis, so 
all beneficiaries began a new cap for outpatient therapy services received on 
January 1, 2012.  For physical therapy and speech language pathology services 
combined, the 2012 limit for a beneficiary on incurred expenses is $1,880.  
There is a separate cap for occupational therapy services which is $1,880 for 
2012.  Deductible and coinsurance amounts applied to therapy services count 
toward the amount accrued before a cap is reached, and also apply for services 
above the cap where the KX modifier is used.



Section 3005 also mandates that Medicare perform manual medical review of 
therapy services furnished beginning on October 1, 2012, for which an exception 
was requested when the beneficiary has reached a dollar aggregate threshold 
amount of $3,700 for therapy services, including OPD therapy services, for a 
year.  There are two separate $3,700 aggregate annual thresholds:  (1) physical 
therapy and speech-language pathology services, and (2) occupational therapy 
services.



Finally, Section 3005 requires that all claims for therapy services furnished 
on or after October 1, 2012, include the National Provider Identifier of the 
physician who reviews the therapy plan.



CMS will issue additional information about all of these new requirements later 
in the year.


Section 3006 - Extension of Moratorium On Qualified Pathologists and 
Independent Laboratory Billing for the Technical Component of Physician 
Pathology Services Furnished to Hospital Patients - Section 3006 extends the 
moratorium through June 30, 2012.  Therefore, those qualified pathologists and 
independent laboratories that are eligible may continue to submit claims to 
Medicare for the technical component of physician pathology services furnished 
to patients of a hospital, regardless of the beneficiary's hospitalization 
status (inpatient or outpatient) on the date that the service was furnished.  
This policy continues to be effective for claims with dates of service on or 
after March 1, 2012, through June 30, 2012.

Section 3007 - Extension of Ambulance Add-On Payments - Section 3007 extends 
through December 31, 2012, the following three Continuation Act ambulance 
payment provisions: (1) the 3 percent increase in the ambulance fee schedule 
amounts for covered ground ambulance transports that originate in rural areas 
and the 2 percent increase for covered ground ambulance transports that 
originate in urban areas; (2) the provision relating to air ambulance services 
that continues to treat as rural any area that was designated as rural on 
December 31, 2006, for purposes of payment under the ambulance fee schedule; 
and (3) the provision relating to payment for ground ambulance services that 
increases the base rate for transports originating in an area that is within 
the lowest 25th percentile of all rural areas arrayed by population density 
(known as the "super rural" bonus).  Suppliers of ambulance services affected 
by these provisions may continue billing as usual.


Be on the alert for more information about the Job Creation Act and the 
provisions which take effect later in the year.

________________________________

It's Not too Late to Give and Get the Flu Vaccine. Take advantage of each 
office visit and protect your patients against the seasonal flu. Medicare will 
continue to pay for the seasonal flu vaccine and its administration for all 
Medicare beneficiaries through the entire flu season. The Centers for Disease 
Control and Prevention (CDC) also recommends that patients, healthcare workers 
and caregivers be vaccinated against the seasonal flu. Protect your patients. 
Protect your family. Protect yourself. Get the Flu Vaccine-Not the Flu.


Remember - The flu vaccine plus its administration are covered Part B benefits. 
 CMS has posted the 2011-2012 seasonal flu vaccine payment limits at 
http://www.CMS.gov/McrPartBDrugAvgSalesPrice/10_VaccinesPricing.asp.  Note that 
the flu vaccine is NOT a Part D-covered drug.

For more information on coverage and billing of the flu vaccine and its 
administration, as well as related educational provider resources, visit 
http://www.CMS.gov/MLNProducts/35_PreventiveServices.asp and 
http://www.cms.gov/immunizations.

________________________________
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