It happens every year. All healthcare professionals have learned to anticipate annual changes in Medicare regulations, coding and reimbursement. However, this year’s delays and payment uncertainties definitely qualify 2003 as one of the worst years yet for physicians trying to do some financial planning for their practices. For starters, the Centers for Medicare and Medicaid Services (CMS) released its 2003 Medicare Physician Fee Schedule and Final Rule on Dec. 31, 2002, two months behind schedule. As a result of that delay, the payment rates for 2003 were amended to take effect on March 1, and 2003 procedures provided prior to that date were to be reimbursed at last year’s rates. The flawed formula that was used to calculate the annual pay updates included a 4.4 percent reduction in the fee schedule conversion factor (CF) across the board. Under that Final Rule, the physician fee CF for 2003 ($34.5920), which adjusted the base calculation for all physician services, was not to become effective until March 1 because of the delay in its release. Services provided on or after Jan. 1 and before March 1 were paid under the 2002 Fee Schedule at the $36.1992 CF. Without congressional intervention, physicians could well have been facing an overall drop of 18 percent over a four-year period, with CY 2005 fee payments falling below the 1991 Medicare payment scale. In an attempt to halt the proposed reductions prior to implementation, congressional negotiators agreed in early February to increase Medicare payments to doctors by nearly $49 billion over the next 10 years. Doing so warded off the scheduled March 1 pay cut that many feared could drive thousands of physicians out of the program. Finally, the agreed-on remedy, beyond maintaining payments at current levels, provided an approximately 1.6 percent increase. This legislative change in Medicare payments was attached to the $395 billion annual appropriations bill that had been delayed for more than four months by partisan battling. The bill, applying to all government departments and program funding, cleared both the House of Representatives and the Senate on Feb. 14. Finally, after waiting for over two months into the year, the Medicare CF of $36.7856 became finalized for professional physician services provided during the period of March 1 through Dec. 31, 2003. As this issue went to press, CMS was revising its opinion on the effect of the legislation and estimating that Medicare payments to physicians will decline during the years 2004-2007, with a 4.2 percent cut in 2004. This change is due to the Sustainable Growth Rate (SGR), which cuts payments if growth in Medicare patients’ use of services exceeds the growth in the Gross Domestic Product (GDP) of the entire U.S. economy. Physicians are the only medical providers subject to the SGR. Be Aware Of These Coding Twists Now there are some answers to the inevitable question: What specific changes are in the wind this year? CMS finalized the relative value units (RVUs) for Healthcare Common Procedure Coding System (HCPCS) Codes G0245, G0246 and G0247 for the treatment of peripheral neuropathy that became effective on July 1, 2002. Specifically, CMS stated these services are provided to those diabetic beneficiaries who are “at risk” for foot care problems but do not have an injury or illness of the foot. You should use the appropriate CPT codes (for example, E/M service, debridement service) for any service you provide to a diabetic beneficiary who has an illness or injury to the foot (for example, foot pain, foot ulcer, foot infection). This year’s CMS changes contain both new codes and revisions to existing codes. CMS has confirmed its determination that CPT Code 97602 for active wound care is already included in the work and practice expenses of CPT Code 97601, and typically the patient has the dressing placed over the wound. It determined the services included in Code 97602 are contained in the work and practice expenses of CPT Code 97022 for whirlpool application. In essence, CMS finalized its decision that Code 97602 is a bundled service and should not be paid separately. New HCPCS Codes G0281-G0283 have been established to implement the coverage determination for electrical stimulation in wound care. Medicare does not presently cover G0282. Keep in mind that CMS has directed practitioners to avoid using the CPT Code 97032 for any wound care.