Physician Payment
Congress Agrees on Temporary Freeze in Medicare Physician Reimbursement (January 2012)Following extensive negotiations, the House and Senate approved the Temporary Payroll Tax Cut Continuation Act of 2011 (H.R. 3765)(Pub.L. 112-78) by unanimous consent on December 23. The Act was signed into law the same day.
The Act provides a temporary reprieve for a number of provisions that were set to expire January 1. Specifically, H.R. 3765 extends for 60 days the payroll tax cut; extends Unemployment Insurance (UI) programs; extends the Medicare Work Geographic adjustment; and prevents the 27.4 percent reduction in Medicare physician reimbursement scheduled for January 1, among other things. The provisions of H.R. 3765 expire on February 29, 2012.
As part of the agreement to secure passage of H.R. 3765, House and Senate leaders agreed to appoint conferees to bridge differences in the Middle Class Tax Relief and Job Creation Act of 2011 (H.R. 3630) approved by the House on December 13 and the Senate on December 17. The conferees are as follow: senators Max Baucus (D-MT), Benjamin Cardin (D-MD), Jack Reed (D-RI), Robert Casey (D-PA), Jon Kyl (R-AZ), Mike Crapo (R-ID), and John Barrasso (R-WY); representatives Dave Camp (R-MI), Kevin Brady (R-TX), Renee Ellmers (R-NC), Nan Hayworth (R-NY), Tom Price (R-GA), Tom Reed (R-NY), Fred Upton (R-MI), and Greg Walden (R-OR). The conference committee is expected to begin meeting the week of January16 when Congress returns from its winter recess. Negotiators are charged with the task of extending the provisions contained in H.R. 3765.
The enactment of H.R. 3765 and the appointment of conferees do not resolve the underlying problems caused by the Medicare Sustainable Growth Rate (SGR) formula. To this end, the ACOI will continue to seek a meaningful long-term solution to this ongoing problem. MedPAC Finalizes SGR Reform Proposal (November 2011)
The Medicare Payment and Advisory Commission (MedPAC) recently approved draft recommendations for repealing the Medicare Sustainable Growth Rate (SGR) formula by a vote of 15 to 2. The recommendations are to eliminate a nearly 30 percent cut scheduled for January, 2012 and replace the SGR formula with a 10- year legislative fee schedule update. The proposal would shift this fee schedule toward primary care by freezing payment rates for primary care physicians and reducing fee schedule conversion factors for non-primary care physicians.
Repealing the SGR is estimated to cost $300 billion over 10 years. In order to preserve budget neutrality, MedPAC has recommended a freeze for primary care physicians and a 5.9 percent reduction for three years, followed by a freeze for the remaining seven years for all other Medicare Part B providers. Under the proposal, physician contribution toward the repeal would be $200 billion over 10 years. Additional offsets would be obtained from payments for post-acute care, Medicare Advantage, laboratories, hospitals, prescription drugs, durable medical equipment, and from beneficiaries by allowing for balance billing. While most agree there is a need to replace the SGR, a great deal of concern has been raised with MedPACs proposed approach. The ACOI will continue to closely monitor efforts to reform or repeal the SGR. CMS Proposes Annual Physician Reimbursement Rule (July 2011)
CMS proposed a 29.5 percent reduction in physician reimbursement under the Physician Fee Schedule on July 1. According to a release by CMS, there are over one million Medicare providers consisting of physicians and non-physicians. CMS is projecting over $80 billion in payments under the Medicare Physician Fee Schedule (MPFS) in 2012 alone. Physician payment under the Medicare program is directed by the Sustainable Growth Rate (SGR) formula created under the Balanced Budget Act of 1997. The formula has resulted in 11 reductions since its inception. All but one reduction, the 2002 cut, has been averted by congressional intervention. The final rule is expected to be issued by November 1. The ACOI is working aggressively with other physician organizations to prevent the scheduled 29.5 percent reduction and replace the current formula with a long-term solution to this annual problem. The issue is complicated this year by congressional negotiations to sharply reduce discretionary spending. New Appointments to the Medicare Payment Advisory Commission Announced (June 2011)
The Government Accountability Office (GAO) announced the appointment of two new members to the Medicare Payment Advisory Commission (MedPAC) on May 31. In addition, three existing members were reappointed to the Commission. The newly appointed members are: Willis D. Gradison, Jr., MBA, a Scholar in Residence in the Health Care Sector Management Program at Duke Universitys Fuqua School of Business and William J. Hall, MD, a geriatrician and Professor of Medicine at the University of Rochester School of Medicine. Their terms will expire in 2014. MedPAC was created by Congress to advise it on issues related to access to care, cost and quality of care, and other key issues affecting Medicare. IOM Report Highlights Disparities in Medicare Geographic Payment Adjustments (June 2011)
According to a report released by the Institute of Medicine (IOM) on June 1, fundamental changes are needed to the data sources and methods used to calculate geographic adjustments under the Medicare program. The report states that the fact that almost 40% of hospitals have been granted exceptions to their adjustments, strongly suggests that the mechanisms underlying the adjustments are inaccurate. According to the IOM report, Medicare should use health sector data from the Bureau of Labor Statistics (BLS) to develop its indexes for calculating wage adjustments. The report argues that the BLS statistics are more accurate, independent and appropriate than hospital cost reports, physician surveys, census data and other information currently used. The full report is available at www.iom.edu. Report Estimates Reduced Solvency of Medicare Hospital Insurance Trust Fund (June 2011)
A report recently released by the Centers for Medicare and Medicaid Services (CMS) projects the Medicare Hospital Insurance Trust Fund will remain solvent through 2024. The 2011 Medicare Trustees Report projects the solvency of the fund decreased by five years from the previous report issued in 2010. According to the report, the five-year reduction in solvency is a result of the slowdown in the national economy and the resulting decline in tax revenues and an increase in future expenditures. The full report can be accessed at www.cms.gov. House Approves Legislation to Modify Payment Structure of Graduate Medical Education (June 2011)
The House approved H.R. 1216 to convert mandatory funding for training at health centers into an authorized appropriation. The Patient Protection and Affordable Care Act (ACA, Pub. L. 111-148) provided $230 million to health centers to establish or expand primary care training programs for medical residents from fiscal years 2011 to 2015. H.R. 1216 is part of the House leaderships ongoing efforts to completely defund the ACA. The legislation is not expected to clear the Senate and the White House has expressed strong opposition to H.R. 1216. Physician Reimbursement under Medicare Receives Committee Consideration (May 2011)
The House Energy and Commerce Subcommittee on Health held a hearing to explore mechanisms to repeal the sustainable growth rate (SGR) formula on May 5. The SGR is used to calculate physician payment under the Medicare program. Without congressional intervention, physicians will experience a reduction in reimbursements by approximately 29.4 percent beginning January 1, 2012. The Congressional Budget Office (CBO) has estimated that simply maintaining the current system with a zero percent update through 2020 would cost $275.8 billion. As such, the cost of repeal is certain to be an issue. The ACOI and others continue to work to secure a long-term solution to this ongoing problem. Efforts are underway to repeal the SGR formula, create a stable 5-year payment environment, and establish a transitional period in an effort to avoid unintended consequences, among other things. FACOI Calls for Long-Term Fix to Medicare Physician Payment Formula (March 2011)
The ACOI and 130 other physician organizations called on House and Senate leadership to eliminate the sustainable growth rate (SGR) formula in a letter on March 10. Without congressional intervention, physicians are facing an approximate 29.5 percent reduction on January 1, 2012. Congress acted five times to pass short-term measures in 2010 alone. On three occasions Congress failed to act prior to implementation of cuts, causing disruptions in processing Medicare claims. The letter sent by the ACOI and others reflects the growing concern that payment uncertainties and delays create for physicians and their patients. While Congress continues to address this issue through a series of short-term fixes, the cost of permanently repealing the SGR continues to rise making it increasingly difficult to find a long-term solution. The ACOI will continue to work to address this important issue. Medicare Physician Payment Legislations Signed Into Law
2011 Payments Adjusted (February 2011)
The President signed into law the Medicare and Medicaid Extenders Act of 2010 (MMEA, H.R. 4994, Pub. L. 111-309) on December 15. The legislation extends through 2011 the payment rate in place at the end of 2010; extends the work geographic practice cost index; and allocates money to the Centers for Medicare and Medicaid Services (CMS) to cover the expenses of reprocessing 2010 claims impacted by payment fixes enacted earlier in 2010.
The 2011 payment update is based on the 2.2% update that went into effect on June 25, 2010. As a result, the 2.2% update from June continues through 2011. This replaces the approximate 23 percent reduction in reimbursement scheduled for December 1 and the additional 1.9 percent reduction scheduled for January 1. According to CMS, all properly filed 2011 claims are expected to be paid at the correct rates with no adjustments or withholding of claims. Efforts are already underway to find a long-term solution to the ongoing problems created by the Sustainable Growth Rate formula that dictates Medicare physician payment rates. Final Rule on Physician Payment Released (December 2010)
The Centers for Medicare and Medicaid Services (CMS) issued a final rule with comments entitled, Medicare Program; Payment Policies Under the Physician Fee Schedule and other Revisions to Part B for CY 2011 on November 2. The final rule provides that the Medicare physician fee schedule will result in a 23 percent reduction in physician reimbursement on December 1 and an additional reduction of 1.9 percent on January 1, 2011. While the reductions are required by law, the ACOI and others are actively pursuing legislation to block the cuts from taking effect.
The final rule also implements a number of provisions contained in the Patient Protection and Affordable Care Act (ACA, Pub. L. 111-148). As such, the rule provides for incentive payments equal to 10% of primary care services under Medicare Part B and expands the Physician Quality Reporting Initiative (PQRI), among other things. House and Senate Act to Briefly Extend Medicare
Physician Payment Rates (December 2010)
The U.S. Senate and House of Representatives approved the Physician Payment and Therapy Relief Act of 2010 (H.R. 5712) on November 18 and November 29, respectively. Once signed into law, this legislation will extend the current Medicare physician payment rates for one month through December 31. Additional legislation will be needed to prevent reductions from taking effect on January 1, 2011. The ACOI continues to advocate for an equitable payment system. CMS Announces Payments for PQRI Participants (August 2010)
The Centers for Medicare and Medicaid Services (CMS) announced that payments for successful participation in the 2009 Physician Quality Reporting Initiative (PQRI) will not be made until October. According to a representative of CMS, technical issues associated with the collection and analyses of submissions have delayed payment. The same official announced that payments for successful participation in the 2010 PQRI, which is ongoing, are expected to be made in July, 2011. CBO Puts Price Tag on 10-Year Physician Payment Fix (August 2010)
According to new numbers released by the non-partisan Congressional Budget Office (CBO), blocking reductions in physician reimbursement under the Medicare program from 2011 2020 would cost approximately $330 billion. The previous estimate for freezing rates with an inflation adjustment from 2011 2019 was $278 billion. The current political environment, the state of the economy, estimates by the CBO and other factors will continue to shape the dialogue to reform the physician payment model under the Medicare program. The ACOI continues to work to find meaningful reforms to the Medicare physician payment system. CMS Issues Proposed Physician Payment Rule for 2011 (June 2010)
The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule entitled, “Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2011” on June 25. The proposed rule would cut physician reimbursement rates by 6.1 percent effective January 1, 2011 and would implement provisions of the healthcare reform law, among other things. Included in the rule is a requirement that would waive the Medicare Part B deductible and coinsurance that applies to most preventative services. The proposed rule would also implement a provision of the healthcare reform law that provides a 10 percent primary care bonus for allowed services under Medicare Part B. In addition to other measures, the proposed rule modifies the Physician Quality Reporting Initiative (PQRI) by adding new measures and would create a group practice reporting option. Final comments are due by August 24. You may view the proposed rule in its entirety at www.regulations.gov. The ACOI is continuing to review the proposed rule. Medicare Physician Reimbursement Receives Yet Another Short-Term Patch
(July 2010)
The President signed into law the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010” (Pub.L. 111-192) on June 25. The legislation was approved by the Senate by unanimous consent and by the House by a vote of 417 -1 on June 18 and June 25, respectively. This Act replaces the 21.3 percent reduction in physician reimbursement under the Medicare program that took effect on June 1 with a positive 2.2 percent update. The update is for the six months running from June 1 through November 30, 2010. It is estimated that reimbursements would be cut by approximately 23 percent on December 1 without further congressional action. This is the fifth piece of legislation since November, 2009 signed into law to prevent the reduction that was slated for January 1, 2010. If you have any questions or concerns, you may contact Tim McNichol directly at tmcnichol@acoi.org or by calling 1-800-327-5183. CBO Releases New Cost Estimate for Increasing Physician Reimbursements
(June 2010)
According to a recent report released by the Congressional Budget Office, keeping physician reimbursement rates level for the remainder of 2010 will cost approximately $6.5 billion. In addition, the report indicates physicians would experiences a 26 percent reduction beginning in 2011, unless Congress intervenes. In the report, the CBO goes on to estimate that it will cost approximately $374 billion dollars to provide a 2 percent increase in reimbursements. You may view the full report at www.cbo.gov. Permanent Fix for Medicare Physician Reimbursement Remains Elusive
(June 2010)
Following three short-term extensions to the 2009 physician fee schedule under the Medicare program, Congress continues to seek a long-term solution to what has become an annual problem. At the time this goes to press, there appear to be two likely scenarios that involve passage of the “Tax Extenders Act of 2009” (H.R. 4213). The Senate approved H.R. 4213 with amendment on March 10 by a vote of 62 – 36. As amended, H.R. 4213 would extend the 2009 physician fee schedule through September 30, 2010. Discussions are underway to further amend the legislation to provide a five-year fix to physician reimbursements under the Medicare program. The five-year patch would provide minimal positive updates over the next five years. Absent further congressional action, a significant reduction would occur following expiration of the five-year patch. Additional information will be provided in upcoming newsletters. The status of these efforts to reform physician reimbursement under the Medicare program continues to evolve. For the most current news and information you may sign up for the ACOI government affairs listserv at www.acoi.org/InteractListerve.html. In addition, if you have any questions or concerns, you may contact Tim McNichol directly at tmcnichol@acoi.org or by calling 1-800-327-5183. CMS Delays Implementation of Non-Payment for Physicians Not Enrolled in PECOS
(April 2010)
The Centers for Medicare and Medicaid Services (CMS) announced that it will delay implementation of its policy requiring rejection of Medicare claims filed or services ordered by physicians and other Part B providers not enrolled in the Provider Enrollment, Chain and Ownership System (PECOS). Implementation was set to begin on April 5. The policy will now take effect on January 3, 2011. CMS has said that even if physicians have had no change to their enrollment data, they still need to submit an initial enrollment application that will establish a current record in PECOS. Most Recent Delay of Reduction in Medicare Physician Reimbursement Expires
(April 2010)
After two separate bills were signed into law delaying implantation of the scheduled 21.2 percent reduction in Medicare physician reimbursements, Congress has failed to act to address the expiration of the most recent temporary extension. In an attempt to address the pending reduction in Medicare physician reimbursement for physicians, the Senate approved the “Tax Extenders Act of 2009” (H.R. 4213) by a vote of 62-36 on March 10. The package of tax breaks and economic safety-net extensions includes a provision to freeze the 2009 Medicare physician payment rate through September 30, among other things. The House approved the “Continuing Extension Act” (H.R. 4851) under suspension of the rules on March 17. Neither the House nor Senate was able to approve the legislation approved by the other chamber. Most recently, the Senate tried to consider H.R. 4851 as approved by the House. Consideration of the bill was blocked by a senator Tom Coburn (R-OK) who required that the cost of the legislation by offset by cuts in spending elsewhere. The Majority Leader filed a motion to move to consideration of the bill (cloture motion) on March 25. The earliest that the Senate will be able to consider H.R. 4851 is April 12. The Centers for Medicare and Medicaid Services (CMS) announced that it instructed its contractors to hold claims containing services paid under the Medicare Physician Fee Schedule for the first ten business days of April under the belief that Congress will act to advance another short-term freeze in reimbursement rates. It appears that the House and Senate will continue to address this important issue with additional short-term fixes. The ACOI will continue to work to advance meaningful long-term solutions to this annual problem that threatens the ability of patients to access needed care. Medicare Physician Reimbursement Reductions Loom (February 2010)
The temporary extension of the 2009 fee schedule provided for by Congress late last year is scheduled to expire February 28. Without further congressional intervention, the 21.2 percent reduction originally scheduled for January 1 will take effect on March 1. The President received H.J. Res 45 on February 4. The resolution raised the federal debt limit and reinstated Pay-as-You-Go (PAYGO) rules for new federal spending. Under the PAYGO rules, any new spending or tax cuts will have to be offset by corresponding spending cuts or tax increases. The resolution exempts any legislation that would reform the Medicare Sustainable Growth Rate (SGR) from the PAYGO rules, effectively allowing Congress to address the looming reduction in physician reimbursements without having to offset the cost of the fix. Efforts continue to prevent the reduction scheduled for March 1 and to enact a long-term solution. You are encouraged to contact your federal elected officials on this important issue by visiting the ACOI’s webpage at www.acoi.org and click on the “Write to Congress” icon. Massachusetts Special Election Changes Healthcare Reform Debate Republican Scott P. Brown’s election to fill the US Senate seat vacated by Senator Edward M. Kennedy on January 19 changed the landscape of the healthcare reform debate, as well as the prospects for any legislation that is viewed to be controversial. As a result of Senator Brown’s election, the Senate consists of 59 Democrats and 41 Republicans. Sixty votes are needed to end filibusters, which have become increasingly common. The change in the composition of the chamber will allow the minority to indefinitely delay floor action on any matter before the Senate. In the end, Senator Brown’s election has called into doubt the enactment of a comprehensive healthcare reform package. The majority leadership in the House and Senate are left trying to find a way to move forward. It appears unlikely that a comprehensive healthcare reform bill will be sent to the President’s desk without considerable modification of the packages that have been advanced thus far. Physicians Receive Temporary Reprieve in Reimbursement Reductions
(January 2010)
The House and Senate approved the “Department of Defense Appropriations Act, 2010” (H.R. 3326) on December 16 by a vote of 395 – 34 and December 19 by a vote of 88-10, respectively. The President signed the bill into law (Pub. L. 111-118) on December 19. The bill contains a provision extending the 2009 physician fee schedule for two months. The extension will expire February 28. The freeze in Medicare physician reimbursements temporarily prevented a 21.2 percent reduction scheduled to take effect on January 1. Efforts are ongoing to achieve a permanent fix to this annual problem. CMS Releases 2010 Final Payment Rule (November 2009)
The Centers for Medicare and Medicaid Services announced payment and policy changes under the Medicare Physician Fee Schedule on October 30. Under the rule, absent congressional action the conversion factor for services on or after January 1, 2010 will be reduced by 21.2 percent. Excluding medical oncology, the rule phases in the use of a new survey called the Physician Practice Information Survey (PPIS) to calculate practice expense relative value units. Use of the new data will be phased in over four years. The rule also finalizes the proposal to stop paying for consultation codes and will redistribute the savings to increase payments for existing evaluation and management (E/M) services. CMS also announced that it would increase payment for the �Welcome to Medicare� visit. In addition to these and other policy and payment changes, CMS added additional measures that can be reported under the Physician Quality Reporting Initiative. Reporting through qualified electronic health records will also be allowed and a process for group practices to report quality measures is created. The rule impacts over one million physicians and nonphysician providers and sets the payment rate for over 7,000 types of services. Following is a summary of the percentage impact of the 2010 Physician Fee Schedule on selected specialties.
ACOI Provides Comments on the Medicare Proposed
Physician Payment Rule for CY 2010 (September 2009)
Humayun Chaudhry, DO, MS, ACOI President, recently provided comments to the Centers for Medicare and Medicaid Services (CMS) in response to the proposed rule entitled, �Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2010.� Included in the proposed rule is a provision to retroactively remove physician-supplied drugs from inclusion in the definition of �physician services� under the Medicare program. Dr. Chaudhry recommended adoption of this significant policy change because enactment would decrease the number of years in which physicians are projected to receive negative Medicare payment updates. It would also address the disproportionate affect of the increasing cost of pharmaceuticals on the Medicare physician sustainable growth rate formula. Currently, physicians are projected to experience an average 21.5 percent negative update in 2010 with additional reductions over the next few years. The proposed rule would benefit some physicians, but creates large reductions in reimbursements for others. The ACOI continues to advocate for reimbursement that covers the cost of providing care for all its members. In addition to proposed payment policy reform, the ACOI expressed continued opposition to an effort by CMS to redefine �physician� for purposes of the Competitive Acquisition Program. As stated in the ACOI�s comments, �There is no justifiable reason to define a nonphysician provider as a physician for the sole purpose of expediency.� Comments were also provided on provisions to increase payment for expanded initial preventative physical examinations under the Medicare program; efforts to reform coding for consultation services; and, expansion of reporting mechanisms under the Physician Quality Reporting Initiative (PQRI), among other things. The ACOI�s comments may be viewed in their entirety at www.acoi.org. CMS Issues Proposed Physician Payment Rule (July 2009)
CMS announced proposed changes to policies and payment rates under the Medicare Physician Fee Schedule (MPFS) for calendar year 2010 on June 30. The MPFS sets payment rates for more than 7,000 types of services in physician offices, hospitals and other settings. An initial review of the proposed rule indicates that certain payments rates for primary care physicians could be increased as a result of some of the proposed changes. Specifically, the proposed rule includes an update to the practice expense component of physician fees. The ACOI will continue to review the proposed rule and provide comment where appropriate. ACOI Endorses Joint Medicare Payment Reform Principals (June 2009)
The ACOI and nearly 60 other national medical organizations endorsed a set of joint recommendations on eliminating Medicare�s sustainable growth rate (SGR) formula and supporting efforts to promote health care quality and appropriateness. The SGR formula limits growth in Medicare spending and has caused the recent annual reductions in physician reimbursement under the Medicare program which have been prevented by legislative action. The joint recommendations highlight the need to reform the SGR formula this year through a transitional approach that would link payment updates to the Medicare Economic Index (MEI). In addition, the joint recommendations include suggestions to promote healthy lifestyles and appropriate use of medical services, improve quality reporting incentives, and strengthen Medicare�s resources by careful analysis of system-wide reforms. The ACOI will continue to advocate on behalf of its membership to ensure fair and efficient reimbursement under the Medicare program.
2009 Physician Fee Schedule Interim Final Rule Released (December 2008)
The Centers for Medicare and Medicaid Services (CMS) released the Physician Fee Schedule (PFS) final rule on October 30. The rule provides for an update of 1.1 percent as required by the �Medicare Improvements for Patients and Providers Act of 2008� (MIPPA)(Pub. Law 110-275). In addition, the final rule sets the 2009 conversion factor at $36.0666 and allows for potential incentive payments totaling up to four percent. In an effort to advance the adoption of electronic prescribing, the PFS rule provides for up to a two percent incentive payment for physicians who acquire and utilize electronic prescribing in their practices in 2009. The rule also provide for up to a two percent incentive payment of their total Medicare allowed charges during the year for those who successfully participate in the revamped Physician Quality Reporting Initiative program. Click here to view summary of the impact of the 2009 Physician Fee Schedule excluding potential incentive payments.
Efforts to Address 2010 Physician Reimbursement Reductions Underway (October 2008)
The House Ways and Means Subcommittee on Health held a hearing on reforming Medicare�s physician payment system on September 11. Testimony was presented on the effect of the sustainable growth rate (SGR) formula and the future outlook for Medicare providers and beneficiaries. One member of the Subcommittee noted that there have been six separate laws since 2003 blocking negative growth in reimbursements for physicians under the SGR formula, thus compounding the difficulty in obtaining a long-term solution to a continuing problem. It is estimated that there will be a 20 percent reduction in physician reimbursements under the Medicare program beginning January 1, 2010. The ACOI will continue to advocate on behalf of its members to ensure proper reimbursement for services provided under the Medicare program.
CMS Proposes Transition to ICD-10 Coding (September 2008)
The U.S. Department of Health and Human Services (HHS) published a proposed rule on August 22 that calls for the transition to the 10th Revision of the International Classification of Disease code sets standard (ICD-10) by October 1, 2011. According to HHS Secretary Michael Leavitt, �The greatly expanded ICD-10 code sets will enable HHS to fully support quality reporting, pay-for-performance, bio-surveillance, and other critical activities.� He went on to say, �Conversion to ICD-10 is essential to development of a nationwide electronic health information environment�.� According to an HHS press release, the transition from ICD-9, which contains approximately 17,000 codes, would result in an expansion to over 155,000 available codes. A number of groups already have expressed concern with the scope and practical effect of the proposal.
Medicare Reimbursement Legislation Becomes Law (August 2008)
After months of effort by the ACOI and others to prevent a reduction in physician reimbursement under the Medicare program, the U.S. House of Representatives and the U.S. Senate voted to override a presidential veto and made the �Medicare Improvements for Patients and Providers Act of 2008� (H.R. 6331) (MIPPA) law on July 15, 2008. The new law, Public Law 110-275, immediately took effect.
As previously reported in ACOInformation, H.R. 6331 worked its way through the House and Senate overcoming a number of hurdles. The House took the first significant step when it approved the legislation by an overwhelming margin of 355-59 on Tuesday, June 24. It was not until July 9 that the Senate was able to overcome efforts by the Republican minority to filibuster the legislation on the grounds that it reduced bonus payments to Medicare Advantage (MA) plans. Finally, the Senate approved the legislation by a margin of 69-30 and sent the bill to the President for his signature. President Bush vetoed the legislation on July 15 citing concerns that the legislation would adversely impact MA plans. The House and Senate voted to override the veto on July 15 by votes of 383-41 and 70-26, respectively. Two-thirds of the members and senators present had to vote in the affirmative to override the veto. As a result of the override votes, the legislation automatically became law upon the final vote of both chambers.
This important law addresses a 10.6 percent reduction in Medicare physician reimbursements that took effect on July 1, 2008. It replaces the reduction with a positive update of 0.5 percent for the remainder of 2008 and creates a positive update of 1.1 percent for 2009. The law also extends the 1.0 geographical practice cost indices (GPCI) through December 31, 2009. In addition, the law extends the physician quality reporting initiative (PQRI) through 2010 and increases bonus payments to two percent. The Act also provides incentives for the adoption of electronic prescribing systems in 2009 through 2013 with a requirement that prescribers use an e-prescribing system beginning in 2011. Finally, MIPPA provides for expanded access to primary care services by expanding the Centers for Medicare and Medicaid Services� Medical Home Demonstration Project, among other things.
Passage of H.R. 6331 and the successful override of the President�s veto was the culmination of a great deal of effort by ACOI and other organizations. Efforts are continuing to find a long term solution to the continual problems created by the sustainable growth rate (SGR) formula. For additional information on reimbursements under the Medicare program you may contact Tim McNichol at tmcnichol@acoi.org or by calling toll-free 1-800-327-5183.
Medicare Reimbursements Continue to be on Top of Congressional Agenda
(July 2008)
The U.S. House of Representatives and the U.S. Senate considered legislation to address a 10.6 percent reduction in physician reimbursements that took effect on July 1, 2008. The House took a significant step forward when it approved the �Medicare Improvements for Patients and Providers Act of 2008� (H.R. 6331) by an overwhelming margin of 355-59 on Tuesday, June 24. The bill which would have prevented a 10.6 percent reduction in physician reimbursement was modeled after S. 3101. S. 3101 was first put before the Senate on June 12. The Senate was not able to invoke cloture, and as a result, the bill was successfully filibustered by the Republican minority by a vote of 54-39. Sixty votes are needed to invoke cloture, end debate and proceed to final consideration of a bill in the Senate. While the President issued a potential veto threat for H.R. 6331 and S. 3101, The House approved the legislation on a widely bipartisan basis with enough votes to override a veto should it be necessary. Following approval of H.R. 6331 with broad support, the Senate considered the bill. The legislation was again blocked by the Republican minority by a vote of 58-40. Shortly after this vote the Senate recessed for the July 4th Holiday. The sticking point for both H.R. 6331 and S. 3101 is the manner in which to finance the increased payment to physicians. Specifically, the legislation that has been considered thus far would pay for the increased expenditures by reducing the bonus payments made to Medicare Advantage (MA) plans. As a result of the legislation reducing these payments, the President and Republican leadership has blocked final approval of this important legislation. The U.S. Senate and the House of Representatives returned from the July 4th recess on Monday, July 7 and Tuesday, July 8th respectively. The Senate is expected to take another vote on H.R. 6331 shortly after its return. Should the measure fail, it is expected that a compromise bill will be considered shortly thereafter. In the end, it is widely believed that Congress will act to address the reductions caused by the Medicare physician fee schedule formula. In the interim, the Centers for Medicare and Medicaid Services (CMS) has announced that it will hold all physician claims for services provided on or after July 1 for the first 10 business days of July. More information on this important matter will posted by email and on the ACOI�s website as it becomes available. For additional information on reimbursements under the Medicare program you may contact Tim McNichol at tmcnichol@acoi.org or by calling toll-free 1-800-327-5183.
MedPAC Releases June 2008 Report to Congress (July 2008)
The Medicare Payment Advisory Commission (MedPAC) released it June report entitled, �Report to Congress: Reforming the Delivery System� on June 13. The Commission concluded that fundamental reforms in payment and delivery systems are needed to improve quality, coordinate care and reduce cost growth. To this end, MedPAC made specific recommendations in the areas of primary care, care provided around hospitalization, and skilled nursing facility (SNF) payments.
With regard to primary care, MedPAC made two specific recommendations. First, the Commission suggested a budget-neutral adjustment that increases fee schedule payments for primary care services. Second, the Commission recommended the establishment of a medical home pilot program in Medicare. Under the pilot program, physicians would receive a monthly, per-beneficiary payment to promote comprehensive care management. MedPAC also recommended that CMS conduct a voluntary pilot program to test bundled payment for all services around a hospitalization for select conditions. You can view the full report and its contents at www.medpac.gov.
PQRI Payments to be Made in July (July 2008)
CMS has announced that it will begin paying bonus payments to providers who successfully participated in the 2007 Physician Quality Reporting Initiative (PQRI) on July 14. Payments will be made to the physician�s practice under the tax identification number (TIN). According to CMS, feedback reports will also be made available online around the same time and will allow providers to compare themselves to a national average for performance. More information is available at www.cms.hhs.gov/pqri/..
CMS Announces 2009 Medicare Physician Payment Fee Schedule (July 2008)
CMS released it annual proposed rule setting forth physician payment under the Medicare program for 2009 on June 30. Under the proposal physicians face an additional 5.4 percent reduction in reimbursements on January 1, 2009. The reduction, provided for in statute, will reduce Medicare spending by about five percent to an estimated $54 billion in 2009, down from an estimated $57 billion in 2008. The proposed rule contains a number of potential changes to the Medicare program that the ACOI is continuing to review and analyze. It is important to note that if approved both S. 3101 and H.R. 6331 would prevent the 2009 reductions as well as the one that took effect on July 1. In light of the proposed rule and pending congressional action, the ACOI will continue its efforts to ensure patients� access to quality health care services and fair and adequate compensation for the physicians who provide the care.
Legislation Introduced to Address Medicare Physician Reimbursement (May 2008)
With a 10.6 percent reduction in Medicare physician reimbursements less than three months away, U.S. Senator Debbie Stabenow introduced the �Save Medicare Act of 2008� (S. 2785) on March 13. The proposed legislation would prevent the July 1 scheduled reduction of 10.6 percent and replace it with a small positive update of .5 percent. In addition, the legislation would prevent an additional projected reduction of 5.4 percent scheduled for January 1, 2009 with a positive update of 1.8 percent. The legislation contains other provisions including an extension of Physician Quality Reporting Initiative (PQRI) through 2010. Senator Max Baucus, Chairman of the Senate Finance Committee has expressed his desire to consider physician reimbursement legislation by mid-May. There are, however, a number of hurdles that remain before legislation is approved by the U.S. Senate and sent to the U. S. House of Representatives for consideration.
CMS Forecasts Reductions in Physician Reimbursement (March 2008)
The Centers for Medicare and Medicaid Services (CMS) released updated estimates for physician reimbursement under Medicare on February 29. According to CMS, upon expiration of provisions contained in the �Medicare, Medicaid, and SCHIP Extension Act of 2007� (Pub. L. 110-173), reimbursements will be reduced by 10.6 percent on July 1. Further, reimbursement rates are projected to be reduced by an additional 5.4 percent on January 1, 2009. The reductions are a direct result of the Sustainable Growth Rate (SGR), which creates targets to control the growth of Medicare spending on physician services. The ACOI continues to advocate on behalf of its members for permanent reform of the SGR. The U.S. House of Representatives and Senate must act before July 1 to stave off the next round of reductions. Efforts are underway to find a mechanism to address the matter and protect patients� access to physician services.
MedPAC Issues Annual Payment Recommendations (March 2008)
The Medicare Payment Advisory Commission (MedPAC), an independent Congressional agency, released its annual March report on Medicare payment and policy updates to Congress on February 29. While MedPAC stated that most indicators suggests that access to physician services are stable, it found limited access issues for primary care physicians in certain geographic areas. In addition, MedPAC stated that in light of projected reductions through 2016, it will closely monitor this issue due to its concern that patient access to care will be affected. In the end, two recommendations were made with regard to physician services. First, MedPAC recommended a 2009 update of 1.1 percent. Second, MedPAC recommended that Congress enact legislation requiring CMS to measure and report physician resource use confidentially for two years. The U.S. House of Representatives Committee on Ways and Means, Health Subcommittee, heard testimony from Glen M. Hackbarth, Chairman of MedPAC on its recommendations on March 11. MedPAC is scheduled to release another report in June. The U.S. Senate and U.S. House of Representatives are continuing to examine physician reimbursement under the Medicare program.
David F. Hitzeman, DO, FACOI Appointed as RUC Workgroup Chair (February 2008)
ACOI Board of Directors member and Chairman of the ACOI Committee on Clinical Practice, David F. Hitzeman, DO, has been appointed Chair of the Relative Value Update Committee�s (RUC) Medical Home Workgroup. The RUC is a panel established by the American Medical Association (AMA) in conjunction with other national medical societies to advise CMS in the development and maintenance of relative values for CPT codes under the Medicare program. Dr. Hitzeman will direct the efforts of the RUC to examine and put forth coding recommendations for care management activities. Appointment as Chair of this workgroup is recognition of Dr. Hitzeman�s vast knowledge and expertise in the area of coding.
Joseph A. Giaimo, DO, FACOI, Appointed to PPAC (February 2008)
ACOI member and Chairman of the ACOI Committee on Government Affairs, Joseph A. Giaimo, DO, has been appointed to serve on the U.S. Department of Health and Human Services� (HHS) Practicing Physician Advisory Council (PPAC). The four-year appointment was made by HHS Secretary Michael O. Leavitt. The PPAC is established in federal law to advise the Secretary and the Administrator of the Centers for Medicare and Medicaid Services (CMS) on proposed changes in regulations and carrier manual instructions related to physicians services identified by the Secretary. As one of only 15 practicing physicians on the Council, Dr. Giaimo�s selection to this highly competitive panel is testament to his qualifications. Dr. Giaimo will be replacing ACOI member Geraldine O�Shea, DO, on the panel upon the expiration of her four-year term. Thank you to Dr. O�Shea for your service on this important advisory body. Congratulations to Dr. Giaimo on your appointment to the Practicing Physicians Advisory Council.
Melinda Allen, DO Testifies before U.S. House of Representatives Subcommittee
(December 2008)
Melinda R. Allen, DO, an internist from Ponca City, Oklahoma provided testimony before the U.S. House of Representatives, Committee on Small Business, Subcommittee on Regulation, Health Care, and Trade on November 8, 2007. The hearing entitled, �Medicare�s Reimbursement Cuts: The Potential Impact on Solo and Small Group Practitioners and the Businesses they Run,� was held to explore the impact of Medicare payment policies on physicians as small business owners. Dr. Allen, a solo-practioner and a member of the ACOI Government Affairs Committee, detailed the daily challenges she faces proving care as a rural physician. Further, she testified about the barriers she has had to overcome over the past few years as Medicare reimbursements failed to keep pace with the cost of providing care. The future outlook is bleak. Dr. Allen noted that the current physician reimbursement system forced her partner out of practice and has limited her ability to accept new Medicare beneficiaries as patients. Speaking on her past experiences and future projections, Dr. Allen stated, �Based on my calculations, I will be unable to sustain my practice if the scheduled payment cuts are realized.� Dr. Allen also spoke on the role of health information technology (HIT) and the need to ensure future access to quality health care for the most vulnerable members of society. Dr. Allen�s testimony was well-received by members of the Subcommittee and received national coverage in several trade publications. Dr. Allen is to be commended for efforts to advocate on behalf of her patients and osteopathic internists. Thank you Dr. Allen for your testimony before Congress!
ACOI Comments on Proposed Medicare Payment Policies (October 2007)
ACOI President Joanna R. Pease, DO, FACOI, wrote to the Centers for Medicare and Medicaid Services (CMS) in response to a proposed rule that would, among other things, revise payment policies under the physician fee schedule for calendar year 2008. Recognizing the potential adverse effect of the provisions of the proposed rule on the future ability of physicians to provide needed care to Medicare beneficiaries, Dr. Pease called on CMS to utilize its full regulatory authority to improve the overall quality and efficiency of the health care delivery system and ensure beneficiary access to health care services by addressing physician reimbursement.
In her comments on behalf of the College, Dr. Pease addressed the estimated 9.9 percent reduction in physician reimbursement under the Medicare program for calendar year 2008; commented on recommendations to modify certain geographical practice indices; asked for the withdrawl of proposed changes to the physician self-referral law; and, encouraged the delay in the repeal of the exemption for computer-generated facsimiles for the transmission of prescription information, among other things. In addition, Dr. Pease encouraged CMS to utilize the $1.35 billion Physician Assistance and Quality Initiative Fund (PAQI), established under the �Tax Relief and Health Care Act of 2006� (THRHCA) (Pub. L. 109-432), to address the projected reduction in physician reimbursements for 2008. The final rule will be published later this year.
Legislation Advances to Stave off Reductions in Medicare Physician Reimbursement
(August 2007)
The U.S. House of Representatives approved the �Children�s Health and Medicare Protection (CHAMP) Act (H.R. 3162) by a mostly party-line vote of 225-204 on August 1. Two hundred twenty democrats voted in favor of the legislation while all but five republicans voted against the bill. The legislation would prevent scheduled reductions in physician reimbursements under the Medicare program in 2008 and 2009 and would reauthorize the State Children�s Health Insurance Program (SCHIP), among other things.
H.R. 3162 would prevent an estimated combined reduction of 15 percent in 2008 and 2009 for physician reimbursement under the Medicare program and provide for a 0.5 percent positive update. The bill would also establish mechanisms to facilitate future efforts to reform the Sustainable Growth Rate (SGR) formula, extend important existing rural payment provisions and establish a medical home demonstration project. The legislation is funded by a 45 cent per-pack tax on cigarettes and a cut in overpayments to Medicare Advantage plans. In order to bring the legislation into compliance with pay-as-you-go budget rules, which require new spending to be offset by either increased revenues or reduced expenditures elsewhere, the legislation would create sharp reductions in the physician payment component of the bill in 2010 and 2011. House majority leadership has stated that the intention is to revisit Medicare physician reimbursement prior to the application of reductions in 2010 and 2011. The ACOI submitted letters to the leadership of the House Committees on Ways and Means and Energy and Commerce in support of provisions of the legislation.
The U.S. Senate approved its version of SCHIP legislation (H.R. 976) by a bipartisan vote of 68-31 on August 2. The Senate legislation does not contain any provisions addressing Medicare physician reimbursement. As a result, efforts will have to be made to ensure that the provisions contained in the House-approved legislation remain in the final conference bill that likely will be considered by both chambers of Congress this Fall. The President has said that he will veto the SCHIP legislation that has been approved thus far. A great deal of work remains before legislation preventing the scheduled reductions in physician reimbursements and reauthorizing SCHIP is signed into law. If you have any questions on physician reimbursement under the Medicare program, you may contact Tim McNichol at tmcnichol@acoi.org or by calling toll-free 1-800-327-5183.
CMS Releases 2008 Physician Payment Proposed Rule (July 2007)
The Centers for Medicare and Medicaid Services (CMS) released its annual proposed rule setting forth physician payment under the Medicare program for 2008 on July 2. Under the proposal, physicians face a 9.9 percent reduction in payment, among other things.
The proposed rule released by CMS decreases the conversion factor to comply with the Sustainable Growth Rate (SGR) formula for 2008. CMS had at its disposal $1.35 billion made available through the �Tax Relief and Health Care Act of 2006� (P.L. 109-432) that could be used to lesson the impact of the reduction. The ACOI and 85 other physician groups urged CMS prior to the release of the proposed rule to utilize its rule-making authority to apply the $1.35 billion to offset the size of the reduction that physicians will experience in 2008. A similar recommendation was also made by the Medicare Payment Advisory Committee (MedPAC). CMS instead proposed to apply the funds to continue bonus payments under the Physician Quality Reporting Initiative (PQRI) in 2008.
In light of the proposed rule and impending congressional action, the ACOI will continue its efforts to ensure patients� access to quality health care services and fair and adequate compensation for the physicians who provide the care. If you have any questions on the proposed rule or physician payment under the Medicare program, you may contact Tim McNichol at tmcnichol@acoi.org or by calling toll-free 1-800-327-5183.
ACOI and Others Call on Congress to Reform the Medicare Physician Payment System (June 2007)
The ACOI recently joined with 86 other medical organizations in calling on Congress to fix the Medicare Sustainable Growth Rate (SGR) formula which dictates physician payment under Medicare. The letter suggests that the current SGR formula be replaced with a payment structure similar to the one used for hospitals, nursing homes and other Medicare Part A providers. Furthermore, the letter provides additional alternatives to address a series of reductions in physician payment slated to begin in 2008 with an estimated 10 percent cut. The ACOI will continue to aggressively pursue efforts to ensure fair compensation for physicians under the Medicare program. For additional information on physician payment under the Medicare program you may contact Tim McNichol at tmcnichol@acoi.org or by calling toll-free 1-800-327-5183.
Congress Continues to Examine Physician Payment Under the Medicare Program
(May 2007)
Medicare spending for physician services is expected to exceed $60 billion in 2007. Further, it is estimated that physicians will experience a 10 percent reduction in Medicare reimbursements in 2008 with additional reductions in subsequent years as a result of the Sustainable Growth Rate (SGR) formula. To this end, the U.S. House of Representatives, Committee on Ways and Means, Subcommittee on Health held a hearing to examine options to improve both quality and efficiency among Medicare physicians on May 10. Testimony was provided by representatives of the Government Accountability Office (GAO), CMS, and the Medicare Payment Advisory Committee (MedPAC), among others. Testimony focused on efforts to control the growth in the volume and intensity of physicians services under the Medicare program. Of note, A. Bruce Steinwald, Director of Health Care for the GAO, indicated that CMS already has the data necessary to identify inefficient providers. Herb Kuhn, CMS Acting Deputy Administrator, indicated that CMS could begin contacting physicians identified to be inefficient by as early as mid-2008. For additional information on physician payment under the Medicare program you may contact Tim McNichol at tmcnichol@acoi.org or by calling toll-free 1-800-327-5183.
MedPAC Releases SGR Recommendations (April 2007)
The Medicare Payment Advisory Commission (MedPAC) released its congressionally mandated recommendations to reform the Medicare Sustainable Growth Rate (SGR) formula on March 1. The SGR formula was created to control the growth of Medicare expenditures and has resulted in the need for continued congressional intervention to prevent annual reductions in Medicare physician payment. Due to disagreement among the commissioners, MedPAC recommended two paths to reform the flawed Medicare physician payment system. The first path would repeal the SGR. The second path would apply expenditure targets, such as the SGR, to all Medicare providers. The MedPAC commissioners did agree, however, that Congress, �Should make major investments in Medicare�s capability to develop, implement, and refine payment systems to reward quality and efficient use of resources while improving payment equity.�
In response to the release of the MedPAC report, the U.S. Senate Finance Committee, the U.S. House of Representatives Ways and Means Subcommittee on Health and the House Energy and Commerce Subcommittee on Health conducted hearings to examine MedPAC�s recommendations and the costs associated with reforming the current Medicare physician payment system. Testimony presented by the Congressional Budget Office suggests a complete repeal of the SGR would cost $262 billion over 10 years. This amount would exceed $300 billion over the same time period if steps are taken to hold harmless Medicare beneficiaries. Without congressional intervention, Medicare physician payments are projected to fall below inflation through at least 2115. Physicians are projected to see a 10 percent reduction in payment under the Medicare program in 2008 alone. The ACOI will continue to aggressively advocate for appropriate physician compensation.
Legislation Enacted to Freeze Reductions in Medicare Physician Payment
(January 2007)
Following extensive negotiations, the U.S. House of Representatives and the U.S. Senate approved the �Tax Relief and Health Care Act of 2006� (H.R. 6111), a comprehensive bill containing tax reforms, health care provisions, and more. The legislation was signed into law (P.L. 109-432) on Dec.20, 2006. The Act sets the 2007 conversion factor for Medicare physician payment at the same level as in 2006 ($37.8975), thus reversing the 5.1 percent reduction that was scheduled to take effect on January 1, 2007. In addition, the Act provides a 1.5 percent increase for physicians who report select data on quality-of-care starting in July of 2007. Further, the Act extends the floor created by the Medicare Modernization Act (P.L. 108-173) on Work Geographic Practice Cost Indices (GPCIs) through the December 31, 2007.
As earlier reported, the Centers for Medicare and Medicaid Services (CMS) announced the Medicare Physician Fee Schedule (MPFS) final rule on November 1, 2006. The rule provides increases for the work component of the Relative Value Units (RVUs) for evaluation and management (E&M) services. ACOI Board member David Hitzeman, DO played an integral role in the increases for E&M services. (See summary of the impact of the final rule and the �Tax Relief and Health Care Act of 2006.�) The ACOI has participated in meetings with CMS officials and other health care organizations in preparation for the 2007 Medicare physician fee schedule. Efforts will continue to address additional reductions scheduled from 2008 forward.
ACOI Calls on CMS to Adopt Proposed Rule Changes Impacting Physician Payment
(September 2006)
As earlier reported, the Centers for Medicare and Medicaid Services (CMS) issued a �Proposed Notice on the Five-Year Review of Work Relative Value Units under the Physician Fee Schedule and Proposed Changes to the Practice Expense Methodology.� The proposal contains significant increases in the work relative value units (RVUs) for evaluation and management services (E&M), among other things. CMS must maintain budget neutrality by offsetting reimbursement increases with reductions elsewhere. Due to the significant benefit most internists would see under the proposed rule, however, ACOI submitted comments to CMS calling for its adoption. (See chart highlighting the impact of the proposal). For additional information you may contact Tim McNichol at tmcnichol@acoi.org. or by calling toll-free 1-800-327-5183
Brief Hold on Medicare Payments Occurs This Month (September 2006)
Members are reminded that the Centers for Medicare and Medicaid Services (CMS) has announced that a brief hold will be placed on Medicare payments for all claims from September 22 through September 30, 2006. The hold is mandated by the �Deficit Reduction Act of 2005.� All eligible claims held during this time period will be paid on October 2, 2006. There will be no interest accrued or late payments made for the amounts held during this time.
Comment Sought on Proposed Changes to Medicare Physician Payment Methodology
(August 2006)
As earlier reported, the Centers for Medicare and Medicaid Services (CMS) proposed significant increases in the work relative value units (RVUs) for evaluation and management services (E&M). CMS must maintain budget neutrality by offsetting reimbursement increases with reductions elsewhere. As a result, some specialties are expected to raise opposition to the proposed change during the public comment period which closes August 21, 2006.
You can take action to support the proposed changes, which will significantly benefit most internists, by submitting comments to CMS. In your comments you should urge CMS to finalize the proposed increases in the RVUs for E&M services; give examples of how the complexity and work of providing care has increased; how the proposed changes would promote continued access to care; and urge CMS to reject any comments that would undermine the improvements in the physician payment methodology. Comments should be submitted to the Department of Health and Human Services, Centers for Medicare and Medicaid Services, Attention: CMS � 1512 � PN, P.O. Box 8014, Baltimore, MD 21244 � 8014.
CMS Announces Brief Hold On Medicare Payments (August 2006)
The Centers for Medicare and Medicaid Services (CMS) has announced that a brief hold will be placed on Medicare payments for all claims from September 22 through September 30, 2006. The hold is mandated by the �Deficit Reduction Act of 2005.� All eligible claims held during this time period will be paid on October 2, 2006. There will be no interest accrued or late payments made for the amounts held during this time.
U.S. House Committee Explores Physician Payment Under the Medicare Program
(August 2006)
The U. S. House of Representatives Committee on Energy and Commerce, Subcommittee on Health, held a hearing entitled, �Medicare Physician Payment: How to Build a Payment System that Provides Quality, Efficient Care for Medicare Beneficiaries,� on July 27. The hearing was called to explore what steps Congress can take to address the flawed sustainable growth rate (SGR) formula currently used to calculate physician payment under the Medicare program.
Testimony was provided by a range of experts including Mark McClellan, MD, PhD, Administrator for the Centers for Medicare and Medicaid Services (CMS) and Paul A. Martin, D.O. Testimony of Dr. McClellan, Dr. Martin and others focused on the current state of physician payment under the Medicare program as well as efforts by the physician community to improve the safety and efficiency of the health care delivery system. Absent congressional action, physicians are slated to take an estimated 4.6 percent cut in 2007 with additional cuts through 2015 totaling over 34 percent. ACOI staff will continue to monitor this issue. For additional information you may contact Tim McNichol at tmcnichol@acoi.org or by calling toll-free 1-800-327-5183.
Medicare Payment Change to Benefit Internists (July 2006)
The Centers for Medicare and Medicaid Services (CMS) announced proposed changes to physician payment methodology under the Medicare program on June 21. Under the proposal, the work component for physician work relative value units (RVUs) would increase by 37 percent for an intermediate office visit and 29 percent for office visits requiring moderately complex decision-making. In addition, the proposal would modify the methodology for calculating practice expenses. The result is an anticipated 10 percent increase in the two most common evaluation and management codes used by internists under Medicare. Additional Medicare physician payment policy matters are expected to be addressed by forthcoming proposals.
Central to the development of this CMS proposal were ACOI Board member David Hitzeman, DO and past-president Robert J. Stomel, DO. Drs. Hitzeman and Stomel serve as a member and alternate, respectively, on the Relative Value Update Committee (RUC). The RUC provides formal recommendations to CMS on physician payment and reimbursement and was integral to this most recent proposed rule. A special thank you goes to Drs. Hitzeman and Stomel for their role in this process. For additional information on the proposed rule you may contact Tim McNichol at tmcnichol@acoi.org or by calling toll-free 1-800-327-5183.
ACOI Members Take Role in Physician Coding and Reimbursement (June 2006)
Robert Good, DO of Illinois has been appointed to the American Osteopathic Association�s (AOA) Coding and Reimbursement Panel (C/RAP) chaired by Boyd Buser, DO. He joins ACOI past-president Robert J. Stomel, DO in representing osteopathic internists on this important advisory panel.
The panel provides a pool of expertise in coding and reimbursement issues. Drs. Stomel and Good will have the opportunity to review and comment on proposed current procedural terminology (CPT) code additions and modifications. Their input will be utilized to provide comment to the CPT Editorial Panel which in turn provides guidance to the Relative Value Update Committee (RUC). The RUC, of which ACOI Board member David Hitzeman, DO is member and Dr. Stomel is an alternate, provides formal recommendations to the Centers for Medicare and Medicaid Services (CMS) on physician payment and reimbursement. The culmination of this process, in conjunction with statutory limitations, results in the Medicare physician fee schedule.
CMS Projects Reduction in Medicare Physician Payment (May 2006)
The Centers for Medicare and Medicaid Services (CMS) announced on April 7, 2006 that it is projecting a negative update of 4.6 percent in the Medicare physician fee schedule for 2007. The reduction is a direct result of the flawed
Sustainable Growth Rate (SGR) formula which sets Medicare spending limits and then modifies physician payments to fit within the limits. Under the formula, future reductions are projected to occur for the foreseeable future totaling over 34 percent.
Practice expenses continue to increase while reimbursements fail to keep pace with the cost of delivering quality care. Several scheduled reductions in the physician fee schedule were staved off over the last few years through congressional intervention. To this end, the ACOI will continue to monitor this situation and advocate on behalf of osteopathic internists to ensure reimbursement rates coincide with the cost of delivering quality care to Medicare beneficiaries and others. For additional information you may contact Tim McNichol at tmcnichol@acoi.org or by calling toll-free 1-800-327-5183.
Physicians Receive Reprieve from Payment Cuts (March 2006)
The President signed the �Deficit Reduction Act of 2005� (DRA) (P.L. 109-362) into law on February 8. The DRA contains a provision that retroactively eliminates the 4.4 percent physician payment reduction that took effect January 1. Medicare claims-processing contractors are paying all 2006 claims at the higher rates. Claims paid prior to the enactment of the DRA will be reprocessed. The reprocessing of claims is expected to be completed by July 1. In light of the adjusted payment rates, the Centers for Medicare and Medicaid Services (CMS) has announced a second 45-day participation enrollment period to allow physicians the opportunity to change their participation decision. The revised physician fee schedule may be viewed at www.cms.hhs.gov/physicianfeesched.. For additional information you may contact Tim McNichol at tmcnichol@acoi.org or by calling toll-free 1-800-327.5183.
Medicare Physician Payment Reduced January 1, 2006 (January 2006)
A 4.4 percent reduction in the Medicare physician payment schedule took effect on January 1. The U.S. Senate in December approved the �Deficit Reduction Act of 2005� (S. 1932), which provides for a one year freeze at the 2005 payment level. Unfortunately, the House of Representatives was not able to approve this legislation prior to adjourning at the end of December. The House was expected to reconvene for the Second Session of the 109th Congress on January 31. S. 1932 was scheduled to be among the first orders of business. Approval of S. 1932 will eliminate the current reduction in the Medicare physician payment schedule retroactive to January 1. Please check the ACOI�s webpage at www.acoi.org for updated information on this important issue.