More on the CMS fee schedule and a payment fix

November 11, 2009

On the heels of the final physician fee schedule for 2010 on Friday, AMA renewed their cries for a permanent fix to the flawed payment formula.

On the heels of CMS’ release of the final physician fee schedule for 2010 on Friday, AMA renewed their cries for a permanent fix to the flawed payment formula.

“Permanent repeal of the payment formula is an essential element of comprehensive reform to improve the health system for patients and physicians,” AMA’s President J. James Rohack, MD, said in a statement.

But before you decide to stop taking Medicare patients, a fix could be on its way.
Congress has historically stepped in and passed legislation stopping the drastic cuts, and it looks like this year is no different. The House Ways and Means Committee introduce legislation on Thursday that would stop that 21 percent reduction in 2010 - and “replace the physician payment formula with a more stable system that ends the unrealistic cycle of threats of ever-larger fee cuts followed by short-term patches,” according to a committee statement about the bill.

The bill would replace SGR (the Sustainable Growth Index, which Medicare rates are based on), with a formula that, according to the committee:
- Removes items such as drugs and lab services not paid directly to practitioners from spending targets;
- Allows the volume of most services to grow at the rate of GDP plus 1 percentage point per year (compared to GDP without any adjustment today);
- Allows the volume of primary and preventive care services to grow at GDP plus 2% per year;
- Encourages coordinated, innovative care by allowing Accountable Care Organizations to be responsible for their own growth paths, irrespective of reductions or increases that apply elsewhere in the system.

A permanent fix has been batted around in Washington for the last couple weeks, and fizzled in the Senate, so it remains to be seen if this time it will move forward.
Still, many physicians are getting off the rollercoaster and saying no to Medicare patients.

Meanwhile, the Medicare rule also formalizes the removal of physician-administered drugs from the formula, according to AMA, and Rohack called this “a long overdue step on the road to permanent reform.” CMS says this will reduce the number of years in which physicians may see a negative update.

CMS also will stop making payment for higher-paying specialists’ consultation codes. The savings would be redistributed to increase payments for E&M services, with an eye toward increasing payments to primary-care physicians.

Among other changes, the fee schedule also includes changes to the PQRI program. For 2010, participants can earn 2 percent of total allowed charges. CMS will add 30 individual PQRI measures and add an EHR-based reporting mechanism. For more, check out their fact sheet.

There's a lot there, so I welcome your thoughts here on the changes.