Today, we received the following notice from the Tennessee Department of Labor and Workforce Development concerning the Emergency Rule which was scheduled to become effective December 1, 2011.
“The Department is withdrawing the emergency rule regarding the Medical Fee Schedule professional fees. After considering all of the factors, especially the uncertainty surrounding Medicare rates, the Department is changing the final permanent rule to implement a flat conversion factor of 33.9764, rather than a floating conversion factor as originally proposed. If the emergency rule changes were to go into effect on December 1, 2011, then payers and providers would have to adapt to multiple reimbursements systems within a short period of time. As such, the emergency rule will be withdrawn and, in the interim, professional fees will remain the same until the final permanent rule becomes effective.”
Attached is a summary of the final rules that was handed out at the Medical Care & Cost Containment Committee today. Let me know if you have any questions.
Below is the attachment referenced:
Final Medical Fee Schedule Amendments
• Remove the 2008 Medicare conversion factor designation and replace it with the 2011 Medicare conversion factor. The 2008 conversion factor of 38.0870 will no longer be the baseline for professional fees. Rather the 2011 conversion factor of 33.9764 will be the new baseline. This will achieve the desired reduction in professional fees, but will not subject providers to the instability surrounding the Medicare conversion factor.
• Modify the surgical reimbursement system that is based on the specialty of the treating physician. The amendments will provide instructions for orthopaedic and neurosurgeons to place a modifier on the surgical bill and will designate the TN Department of Health’s database as the determining factor for specialties. Board-certification/eligibility will no longer be required.
• Cap pathology/laboratory rates at 200% of Medicare. Currently, the cap is 80% of the provider’s billed charge, which effectively lets the providers set their own rates. This leads to extremely high costs for relatively inexpensive tests, such as drug screens.
• Allow chiropractors to bill for an office visit on the same day as the initial treatment. Currently, this is prohibited by our rules, but our chiropractic rates are lower than average and this prohibition can cause unnecessary delays to care.
• Require repackaged and compounded drugs to be reimbursed by the original NDC number. Since this issue has been addressed in several other states and many commenters had suggestions on the proper language, the final amendments will maintain the intent of the original proposal, but with tighter language.
• All references to generic equivalent average price (“GEAP”) have been removed. The original proposal inserted GEAP to the pharmacy fee schedule. Due to several problems with such a change, the final amendments will not include GEAP.
• Set ambulance rates at 150% of Medicare. Currently, the rates are based on submitted charges, so there is no effective cost containment. Although states cannot regulate air ambulances, this amendment will greatly reduce costs for ground ambulances.
• Remove language regarding Medicare bundling for the in-patient stop-loss calculation. There were concerns about unintended effects of this proposed amendment. As such, the final amendments will not include this change and the Department will study the issue further.
* The original proposals included a cap of 130% of Medicare for emergency care. This was a typo and the final amendments will maintain the 200% level for emergency care.