Physician Payment
Legislation Introduced to Address Medicare Physician ReimbursementWith 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
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
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
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
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
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
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
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
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
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.
Medicare Physician Payment Reduced January 1, 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.
Physicians Receive Reprieve from Payment Cuts
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.
CMS Projects Reduction in Medicare Physician Payment
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.
ACOI Members Take Role in Physician Coding and Reimbursement
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.
Medicare Payment Change to Benefit Internists
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.
U.S. House Committee Explores Physician Payment Under the Medicare Program
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.
CMS Announces Brief Hold On Medicare Payments
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
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.
Brief Hold on Medicare Payments Occurs This Month
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.
ACOI Calls on CMS to Adopt Proposed Rule Changes Impacting Physician Payment
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
Legislation Enacted to Freeze Reductions in Medicare Physician Payment
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.
MedPAC Releases SGR Recommendations
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.
Congress Continues to Examine Physician Payment Under the Medicare Program
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.