Medicare Payments Face Another 6.1% Cut Under SGR

In a new proposed rule, the Centers for Medicare and Medicaid Services (CMS) has included a provision that could mean an additional reduction by 6.1% in physician service payment rates starting Jan. 1 2011, under the sustainable growth rate (SGR) formula adopted by Congress. This reduction would be added to a projected 23.5% cut that is scheduled to take effect Dec. 1 --unless Congress works to change or eliminate the current SGR formula.

The SGR formula has called for an across the board reduction in physician payment rates every year since 2002, and since 2003, through May 31, 2010, the cuts have been averted by legislative action. Last week, after a sustained battle, Congress finally approved -- and President Obama signed into law on June 25 -- a provision postponing the SGR through Nov. 30. The reduction called for the SGR (21.3%) -- plus an increase in physician rates approved by Congress (2.2%) -- would essentially create a 23.5% decrease in reimbursements if Congress fails to act after Dec. 1.

CMS, though, has expressed its reluctance about the proposed cuts to the Medicare physician fee schedule. "We are very concerned about the impact the continuing uncertainty about payment rates and cash flow disruptions may have on physician practices and on beneficiary access to physicians' services," said Jonathan Blum, deputy administrator and director of CMS's Center for Medicare.

He added that while 97% of physicians have chosen to participate in Medicare for 2010 -- and have agreed to accept Medicare's payment rates as payment in full for the services they provide to beneficiaries -- CMS is hearing more stories of physicians limiting the number of beneficiaries they will see. "We are also concerned about the diversion of scarce Medicare resources as we have to adjust our payment operations to the constantly changing legislative landscape."

The CMS proposed rule also calls for implementing provisions of the healthcare reform act that would eliminate out of pocket costs for beneficiaries for most preventive services--including the new annual wellness visit. This visit augments the benefits of the initial preventive physical examination (IPPE) -- or the "Welcome to Medicare Visit" -- with an annual wellness visit.

This provision is designed to allow physicians and patients to develop a personalized prevention plan. The law will require the annual wellness visit to include at least the following six elements:

• Establish or update the individual's medical and family history.
• List the individual's current medical providers and suppliers and all prescribed medications.
• Record measurements of height, weight, body mass index, blood pressure, and other routine measurements.
• Detect any cognitive impairment.
• Establish a screening schedule for the next 5 to 10 years including screenings appropriate for the general population, and any additional screenings that may be appropriate because of the individual patient's risk factors.
• Furnish personal health advice and coordinate appropriate referrals and health education.

In addition, the proposed rule calls for implementing other provisions in the new healthcare reform law:

• Elimination of deductible and coinsurance for most preventive services: Effective Jan. 1, 2011, the Part B deductible and the 20% coinsurance that would otherwise apply to most preventive services would be waived.
• Incentive payments to primary care practitioners for primary care services: Incentive payments equal to 10% of a primary care practitioner's allowed charges for primary care services would be made under Part B. The law also defines primary care services as limited to new and established patient office or other outpatient visits; nursing facility care visits; and domiciliary, rest home, or home care plan oversight services; and patient home visits.
• Incentive payments for major surgical procedures in health professional shortage areas: The new healthcare reform act calls for a payment incentive program to improve access to major surgical procedures -- defined as those with a 10 day or 90 day global period under the Medicare physician fee schedule--in Health Professional Shortage Areas between Jan. 1, 2011 and Dec. 31, 2016. To be eligible for the incentive payment, the physician must be enrolled in Medicare as a general surgeon.
• Permitting physician assistants to order post hospital extended care services: Physician assistants would be authorized to perform the level of care certification that is one of the requirements for coverage under Medicare's skilled nursing facility (SNF) benefit.
• Physician self referral for certain imaging services: The healthcare reform law amends the in office ancillary services exception to the self referral law as applied to magnetic resonance imaging, computed tomography, and positron emission tomography. CMS is proposing to require that the referring physician provide a patient with a list of 10 alternative suppliers within a 25 mile radius of the physician's office who provide the same imaging services.
• Misvalued codes under the physician fee schedule: CMS will be periodically reviewing and identifying potentially misvalued codes and make appropriate adjustments to the relative values of the services that may be misvalued. CMS will be looking for additional categories of services that may be misvalued, including codes with low work relative value units (RVUs) commonly billed in multiple units per single encounter and codes with high volume and low work RVUs.

 

Comments on the proposed rule are due Aug. 24, with a final rule to be issued by Nov. 1.