| Congress Moves to Avert Scheduled Medicare Cuts |
H.R. 6111 includes Medicare, health insurance and other key provisions.
By Marcelino Oliva, DO, FACOFP and Ray Quintero
During the course of two days, the House and Senate approved the “Tax Relief and Health Care Act of 2006” (H.R. 6111). The House approved the measure December 8 by a vote of 367-45-21, and the Senate followed suit in the early morning hours of Saturday, December 9 by a vote of 79-9-12. The bill will now be sent to President George W. Bush for his signature and enactment into law.
H.R. 6111 is a large legislative package that included provisions related to Medicare, health insurance, the tax code, energy and trade policies. The bill includes many provisions of importance to the ACOFP, including a provision to avert the 5 percent cut in Medicare physician payments scheduled to take effect on January 1, 2007.
A summary of these provisions follows:
Other health related provisions included in H.R. 6111.
CMS Releases Final Rule of the 2007 Medicare Physician Fee Schedule
The Centers for Medicare & Medicaid Services (CMS) released the final rule of the 2007 Medicare Physician Fee Schedule, which includes the rules on the five-year review and revisions to the practice expense. Highlights of the major provisions include:
2007 Conversion Factor: $35.9848 (includes the five percent payment reduction – CMS had estimated a 5.1 percent pay reduction in the proposed rule.)
Five-year Review/Work RVUs: The final rule adopts the Relative Value Update (RVU) Committee’s recommendations that increase the work component for the RVUs for face-to-face evaluation and management services (E&M) visits. For example, the work component for RVUs associated with an intermediate office visit is increasing by 37 percent. The work component for RVUs for an office or hospital visit that requires moderately complex decision-making will both increase by 29 percent and 31 percent.
Budget Neutrality: Despite objections by the medical community, CMS is applying the budget neutrality (BN) factor to the work RVUs. The work RVUs will be reduced by approximately 10 percent. The American Osteopathic Association (AOA), American Medical Association (AMA) and other physician associations called on CMS to apply the budget neutrality factor to the conversion factor. CMS argues that applying the BN to the work RVUs will not reverse the improved accuracy of the values that have been assigned to the E&M services, nor would it distort the relativity of the RVUs. Realizing that other payors use the fee schedule rates, CMS is publishing the RVUs without the BN adjustment.
Geographic Practice Cost Index: The Medicare Modernization Act established a floor of 1.0 for the work Geographic Practice Cost Index (GPCI) for any locality where the GPCI fell below 1.0 for purposes of payment for services furnished on or after Jan. 1, 2004 and before Jan. 1, 2007. Beginning Jan. 1, 2007, the 1.0 floor expired and the work GPCI reverted to the fully-implemented value. The Geographic Adjustment Factor (GAF) for several pay localities will drop as a result.
Practice Expense: The final rule adopts a new methodology for determining practice expense RVUs, as in the proposed rule, and will be phased in over a four-year period.
Preventive Services: Medicare expands its preventive services benefits. Medicare will pay for ultrasound screening for abdominal aortic aneurysms. The rule expands the number of beneficiaries who qualify for bone mass measurement. The rule also exempts colorectal cancer screening from the Part B deductible.
Imaging Services: The final rule caps payment rates for imaging services under the physician fee schedule at the amount paid for the same services when performed in hospital outpatient departments. The rule also finalizes a policy of reducing, by 25 percent, the payment for the technical component of multiple imaging procedures on contiguous body parts.
Specialty Impact: With the exceptions of family practice, endocrinology, emergency medicine, infectious disease and pulmonary disease, all other specialties will face reductions ranging from one to 18 percent. Radiology specialties are among the hardest hit. Also, general practice will see a three percent reduction, general surgery will experience a six percent reduction and internal medicine will undergo a one percent reduction.
Physician Voluntary Reporting Program
for 2007 Unveiled
CMS has released a snapshot of potential quality measures for its 2007 Physician Voluntary Reporting Program (PVRP). CMS’ goal is to have measures for every physician specialty to report under PVRP next year. The measure set builds on the original PVRP for 2006.
The current list includes 86 measures covering 32 specialties. CMS plans to pick a subset of these measures as the PVRP measures for next year. Developers of the physician measures include the AMA Physician Consortium for Performance Improvement, the National Committee on Quality Assurance (NCQA), physician specialty societies and other organizations such as the Quality Improvement Organization program.
According to CMS, physicians will not be required to report all measures identified with their specialty. An updated PVRP measure set document was due to be posted in November 2006 for January 2007 implementation. CMS indicates it will continue to update this list and include additional specialties in the PVRP program in 2007 as further measures are developed.
The development process also gives preference to measures endorsed by the National Quality Forum and adopted by Ambulatory Care Quality Alliance (AQA). Where measures are required to cover specialties for which AQA/NQF endorsement is not available, the agency will consider input from relevant professional associations and stakeholders.
Patient Centered Medical Home Discussed
A conference call and web briefing was held November 1, 2006 by the eHealth Initiative, and the Patient Centered Medical Home (PCMH) initiative was discussed. Robert B. Doherty, Senior Vice-President for Government Affairs and Public Policy, American College of Physicians (ACP) provided a presentation highlighting the concept. Family physicians and internists would primarily serve as the patient’s medical home, while there could be some potential exceptions for specialists to play this role. Mr. Doherty referenced a survey conducted by the Commonwealth Fund that found that adults having a primary care physician, rather than a specialist, directing their care experienced a 33 percent reduction in health care costs, and were 19 percent less likely to die.
The goals of PCMH would be to improve patient care through fostering an enhanced physician-patient relationship, and by creating a payment system that would adequately and fairly compensate physicians for the care they provide. Improved patient care would ideally arise from a patient-centered approach that is guided by a primary care physician. The physician would be responsible for all aspects of a patient’s care and any follow-up required. This physician could work with a team of other health professionals, but would be ultimately responsible for the patient’s outcomes.
Under the PCMH model, physician payment could potentially be risk-adjusted, based on multiple components and potentially bundled. Although the specifics of payment have yet to be determined, elements to be included are:
The future of PCMH remains uncertain. However, demonstration projects and pilot tests are the logical next step. Mr. Doherty referred to support of the PCMH model by Rep. Nancy Johnson (R-CT). He also referenced a draft bill that has been given to Rep. Joe Barton (R-TX) to reform physician payment using PCMH as a model.
Collins-Durbin Graduate Medical Education Push
On November 20, 2007, 57 members of the United States Senate sent a letter to Senate Majority Leader William Frist (R-TN) and Democratic Leader Harry Reid (D-NV) urging the Senate to take legislative action to prevent CMS from limiting the training of physicians in non-hospital settings during the lame duck session. Sen. Susan Collins (R-ME) and Sen. Richard Durbin (D-IL) drafted the letter. The letter also re-affirms the congressional intent of encouraging and fostering rural and out-of-hospital training for medical residency programs. A similar letter was also sent to Senate leadership in 2004 and 2005.
Since 2002, CMS fiscal intermediaries have been denying – often times retroactively through audits – payments for the time residents spent in non-hospital settings. At issue is CMS’ determination of what responsibilities the teaching hospital has with respect to the financing of such educational opportunities. We believe that CMS’s actions are in direct conflict with Congressional intent expressed in provisions of the 1997 and 1999 balanced budget acts, which were designed to encourage rural and out-of-hospital experiences.
CMS’ actions also put at risk the agreements that teaching hospitals, residency programs, physicians, clinics and community health centers have carefully negotiated to ensure that residents are exposed to ambulatory training. In direct response to CMS’ actions, Congress called for a one-year moratorium on these kinds of payment denials in Section 713 of the Medicare Modernization Act (MMA). Section 713 of the MMA also required the Office of the Inspector General (OIG) of the Department of Health and Human Services to conduct a study on residency training in non-hospital settings and to issue a report identifying alternative payment methodologies for the costs of training residents in those settings. The OIG report, which was released in December 2004, found that teaching hospitals work with an extraordinary number of non-hospital facilities where they provide resident physicians with valuable ambulatory educational experiences.
Despite the findings of the OIG report, CMS continued to audit graduate medical education programs, forcing many to repay millions of dollars as a result. These ongoing audits are placing extreme financial constraints on teaching hospitals, possibly resulting in many choosing to discontinue their residency programs unless corrective actions are not taken soon.
CMS continues to interpret “all or substantially all” of the training costs as requiring hospitals to pay physicians who train residents in non-hospital settings, regardless of the intent of the parties. The agency has made no substantive changes to the 2004 regulations, or to the confusing agency guidance that was released in April 2005. CMS has yet to acknowledge that when a teaching hospital pays resident stipends, benefits and other training costs (if any) as agreed to by the parties, the hospital has incurred “all or substantially all” of the costs of the program, and is entitled to count the residents for GME payment purposes.
Senate Leaders Asked to
Restore LHHS Funding Levels
On October 27, 2007 a letter was sent to Senate Majority Leader Bill Frist (R-TN), Minority Leader Harry Reid (D-NV), Appropriations Committee Chairman Thad Cochran (R-MS) and Appropriations Committee Ranking Member Robert Byrd (D-WV) from 57 Senators urging spending for the Departments of Labor and Health and Human Services (LHHS) to be restored to no less than 2005 levels. This letter originated from the offices of Sens. Arlen Specter (R-PA) and Tom Harkin (D-IA), who earlier in 2006 proposed an amendment that added $7 billion in spending authority to a broad range of health and human service programs as part of the FY 2007 budget resolution.
This additional funding would supplement the requests in the President’s budget and fund programs at the National Institutes of Health, Student Aid programs and Rural and Medically-underserved programs. Seventy-three Senators voted in favor of the amendment, yet additional directives withdrew this spending from the final appropriations bill. The letter, signed by both Republicans and Democrats, requests that Senate leadership restore this funding in the final version of the bill.
Medicare Offers Abdominal Aortic Aneurysm Screenings
Beginning January 1, 2007 a one-time Abdominal Aortic Aneurysm screening will be offered at the Welcome to Medicare physical for male-ever smokers and those having a family history of AAA.
As part of the Deficit Reduction Act of 2005, the Screening Abdominal Aortic Aneurysms Very Efficiently (SAAAVE) Act became law. This legislation was strongly supported by the National Aneurysm Alliance, a broad coalition of medical professional organizations, foundations, patient advocates and medical technology manufacturers. The screenings are projected to prevent more than 15,000 deaths each year from AAAs, based on American Heart Association statistics. AAA screening is a sound investment in patients, particularly in comparison to the high costs associated with emergency surgery and patient rehabilitation.
Marcelino Oliva, DO, FACOFP chairs the ACOFP Committee on Federal Legislation. Ray Quintero serves as ACOFP’s Director of Government Affairs. ACOFP members may contact Mr. Quintero at 800-962-9008, extension 8648, or by e-mail at rquintero@osteopathic.org.