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Physician Pay Wars' Winners and Losers

 |  By cclark@healthleadersmedia.com  
   November 05, 2012

Neurology groups are disappointed. Radiology specialists are upset and even angry. But family physicians and internal medicine doctors are delighted.

Those were some responses hours after the Centers for Medicare & Medicaid Services on Thursday issued its 1,362-page final rule of fee schedules for 57 physician and other specialty provider groups for calendar year 2013.

"These are arbitrary cuts, and they make no sense," says Geraldine McGinty, MD, chairwoman of the American College of Radiology Economics Commission, about the schedule's 3% reimbursement cut for radiologists.

She notes that it is the third time imaging services have been cut since the Deficit Reduction Act of 2005 slashed payments.

Embedded in the new rule is the multiple procedure payment reduction policy, or MPRP, which limits a radiologist to 75% of reimbursement if he or she reads an image of a patient who has already had another imaging study performed and read by a different radiologist in the same group in the same session.

"If I read a brain MRI, and my partner reads an abdominal CT on the same patient, one of us is going to be paid 75%," McGinty says. "That's arbitrary because there's no meaningful efficiency" in these two services.

Related radiology specialists also will suffer cuts, such as radiation oncologists, 7%; interventional radiologists, 3%; and physicians providing services in radiation therapy centers, 9%.

Another problem she has with the new fee schedule is the agency's use of the word "session," which she says CMS has vaguely defined. "Is it timeframe, or something else?" What if two images for the same person are read hours hours apart, but on different days?

"We've pushed back on these (cuts) several times now," and last year had the cuts taken out, McGinty says. This time it appears they will take effect with several negative consequences that Medicare officials don't yet realize, she insists.

"These cuts will reduce access for Medicare beneficiaries, and they also have the potential to leave practices unable to make the kinds of investments in technology that we feel have so significantly benefited Medicare beneficiaries."

Soon, she adds, the technology companies that provide the equipment won't do well, and people won't have jobs, and the cycle of innovation will suffer. "The cycle of innovation only happens if there's demand for a product," she says.

Amanda Becker, director of medical economics and quality for the American Academy of Neurology, says the neurologists' 7% fee cut is coming chiefly from reductions in payment for electromyology (EMG) and nerve conduction studies, because of coding changes for those services. She says that of the AAN's members, 38% indicated in a recent survey that EMG is a primary focus in their practices.

"It will really depend on what kind of a practice a neurologist has how much of a pay cut they'll see," Becker says. "Physicians who mainly do a lot of evaluation and management (E&M) may not see much of an impact."

The groups opposed to what they see as excessive pay cuts are concerned that the reductions will come on top of the statutory 26.5% across-the-board cut known as the sustainable growth rate (SGR) formula, which is set to kick in January 1 for more than one million physician and non-physician practitioners.

CMS officials, however, said in a statement, that they don't think the SGR will take effect, at least not with that severe of a cut.

"Congress has overridden the required reduction every year since 2003," the statement said. "The Administration is committed to fixing the SGR update methodology and ensuring these payment cuts do not take effect. Predictable, fiscally-responsible physician payments are essential for Medicare to sustain quality and lower health care costs over the long term."

Primary Care Winners
Among the providers scheduled to receive fee increases, family practitioners top the list with a 7% increase. This which includes a hefty 5% fee increase for providing transitional care management or coordination care services during the 30-days after Medicare patients have discharged from acute care settings or skilled nursing home care. Geriatricians will receive 5%, of which 2% is for transitional care management services.

Nurse practitioners will receive a 4% pay bump, half of which is for transitional care services, while physician assistants will receive a 3% pay increase.

In a statement issued Thursday, CMS said it was trying to recognize "the work of community physicians and practitioners in treating a patient following discharge from a hospital or nursing facility will ensure better continuity of care for these patients and help reduce patient readmissions."

"What Medicare is saying is that they're now recognizing there's a complexity of care that's not been valued in the past," says Jeffrey Cain, MD, president of the 105,000-member American Academy of Family Physicians. "We've had a problem with the culture in our healthcare system (determining) who's in charge of medication, who's in charge of referrals" after a patient is discharged from the hospital.

And this is recognition from CMS for the complexity and value that primary care brings.

Other primary care physicians will also get a pay bump. For internal medicine specialists, the increase is 4%, which includes 3% for transitional care management services. Pediatricians will see 3% more, all of which is for transitional care management.

Providers receiving more pay for transitional care management services may, however, have to hire or contract additional staff to make phone calls, or perhaps even more house calls to check on patients in their nursing homes or residences.

Family doctors will need to be more flexible with their office hours as well. "They'll need to keep slots open in their schedules to be open for access, and have clear lines of communication with their colleagues in the hospital and other members of the patient centered medical home team," Cain says.

However, he says that although many family doctors will see pay increases as a result of this CMS rule, he doesn't think they'll rush to make changes in hiring in their practices at least for another couple of months, until they see how the policy impacts their offices.

Other physician specialty groups likely to see pay increases, are:

  • Allergy/immunologists, 3%
  • Anesthesiologists, 1%
  • Colon and rectal surgeons, 2%
  • Critical care specialists, 1%
  • Endocrinologists, 1%
  • General practice doctors, 1%
  • Hand surgeons, 1%
  • Hematology/oncologists, 2%
  • Infectious disease specialists, 1%
  • Interventional pain management specialists, 1%
  • Otolaryngologists, 2%
  • Psychiatrists, 2%
  • Pulmonary disease specialists, 1%

Payment Losers
Among those specialists likely to receive pay cuts are

  • cardiac surgeons, -1%;
  • cardiologists, -2%
  • nuclear medicine specialists, -3%
  • ophthalmologists, -3%
  • pathologists, -6%
  • physical medicine specialists, -4%
  • thoracic surgeons, -1%
  • urologists, -1%
  • vascular surgeons, -2%


The final rule includes additional important provisions that tie physician reimbursement with quality performance measures, and some new information on quality reporting for doctors to be posted on Medicare's Physician Compare site starting Jan. 1.

The rule was issued with a comment period that extends until Dec. 31, 2012.

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