The payroll tax extension legislation that was passed by Congress and signed by the President on Dec. 23, 2011 (Public Law 112-078) delayed the 27.4% Medicare pay cut due to the SGR formula for two months. It also extended the floor on the work geographic practice cost index (GPCI) and provides for a continuation of the exceptions process to the $1880 therapy cap through February 29, 2012. However, the Centers for Medicare & Medicaid Services (CMS) has confirmed that all of the other changes that were included in the Medicare physician payment final rule for 2012 will still take effect. As a result, providers should not expect that payment rates will remain unchanged, as numerous changes are being made in the relative value units, GPCIs, electronic prescribing and quality reporting programs, and multiple procedure payment rules for 2012. All of these changes have taken effect as scheduled for dates of service beginning Jan. 1, 2012.

Public Law 112-078 provided for a zero percent update to the Medicare conversion factor, the final rule indicated that there would be a 0.18% increase in the conversion factor for budget neutrality and this change will also be effective Jan. 1, 2012. The budget neutrality increase is due to CMS adoption of the RVS Update Committee recommendations for misvalued codes. The 2011 conversion factor was $33.9764. The 2012 conversion factor will be $34.0376.

Congress has now turned its attention to the conference committee assigned to hammer out a deal between the two chambers to prevent fee schedule cuts and therapy caps from being effective March 1, 2012. The American Physical Therapy Association asks the profession to remain vigilant to prevent this from happening next year.

The Medicare Fee Calculator has been updated to reflect the Medicare Physician Fee Schedule allowable payment amounts for services provided from January 1 through February 29, 2012, and will be updated again after any additional Congressional action occurs prior to March 2012.