Health Care and Life Sciences > Health Reform Resource Center > CMS Releases CY 2011 Hospital Outpatient Department and Physician Fee Schedule Final Rules
17 Nov '10

Consistent with its annual regulatory cycle, CMS issued the 2011 final  Medicare Physician Fee Schedule (PFS) and Outpatient Prospective Payment System (OPPS) rules on November 2, 2010.  The rules will be published in the Federal Register on November 29, 2010.  The final rules implement key elements of health care reform legislation, as well as other changes to physician and OPPS payment for the coming year.

Two key issues dominate discussions of the 2011 final PFS: 1) the implementation of certain health care reform provisions; and 2) the impact of the Sustainable Growth Rate (SGR) payment adjustment.  Additionally, the 2011 final PFS rule addresses the following important areas:

  • codes and reimbursement rates for all Medicare Part B physician services;
  • changes to the Medicare Economic Index (MEI) and Geographic Practice Cost Index (GPCI) methodology;
  • Medicare Part B payments for drugs and drug administration services;
  • the Physician Quality Reporting System (PQRS), formerly called the Physician Quality Reporting Initiative (PQRI); and
  • the Electronic Prescribing (E-Prescribing) Incentive Program.

The final OPPS rule implements the following key health care reform provisions:

  • Provides reductions to the OPPS market basket update
  • Establishes the following conditions for Medicare reimbursement:
    • Community mental health centers (CMHCs) must have a minimum percentage (40%) of non-Medicare patients, and
    • CMHCs and hospitals cannot provide home care services through partial hospitalization programs
    • Eliminates beneficiary cost-sharing for certain Medicare-covered preventive services
    • Establishes a floor on the wage index adjustment to payments for hospital outpatient services furnished in certain designated states (Montana, Nevada, North Dakota, South Dakota and Wyoming)
    • Authorizes the redistribution of unused medical residency positions for purposes of determining Medicare payment and permits time spent in non-patient activities to count toward the determination of full-time equivalency (FTE) for graduate medical education (GME) and indirect medical education (IME) payment purposes
    • Limits physician referrals to a hospital where the physician has an ownership or investment interest