The NCMS this week commented on the proposed Medicare Physician Fee Schedule rule for calendar year 2012, as published in the Federal Register by the Centers for Medicare and Medicaid Services (CMS) on July 19, 2011. NCMS is particularly interested in how the rule will affect reimbursement to physicians and the ability of Medicare beneficiaries to access care.

In a letter to CMS Administrator Donald M. Berwick, MD, the NCMS:

• Supports permanent replacement of the SGR for updating the Medicare physician fee schedule. The NCMS is concerned about the potential impact of drastic cuts in Medicare physician reimbursement fees if Congress fails to replace the SGR and scheduled cuts are allowed take effect in 2012.
• Encourages the Secretary of the Department of Health and Human Services (HHS) to gain physician support and input in developing quality measures for all aspects of medical care for Medicaid patients. The NCMS believes that a rigid schedule of implementation of the value-based modifier for the Medicare Physician Fee Schedule is unrealistic and could lead to use of measures not supported by appropriate professional organizations and fail to provide reliable measures of value or quality.
• Shares the concerns of the AMA and national medical specialty societies over the proposed expansion of the Multiple Procedure Payment Reduction (MPPR) Policy to include advanced imaging services. The NCMS urges the CMS to refrain from subjecting entire groups of procedure and imaging codes to blanket rate reductions, and instead focus efforts on ensuring Medicare beneficiaries receive necessary diagnostic services at appropriate times.

Click here to the read the letter to Dr. Berwick.

NCMS will continue to address these issues in collaboration with the AMA and other physician organizations. Look for updates in the Bulletin and at http://www.ncmedsoc.org/.

Just hours before a midnight deadline Tuesday, Congress passed legislation that raised the federal debt ceiling, avoiding a default that would have far-reaching consequences, including the Medicare and Medicaid programs. The debt deal is temporary and calls for a new Joint Select Committee on Deficit Reduction to come up with recommendations on how to further reduce the budget by $1.5 trillion by November 23, 2011. If the committee fails to reach its target or Congress does not act on the recommendations by December 23, 2011, then the debt ceiling would automatically be raised by $1.2 trillion, using across-the-board cuts to achieve savings. Those cuts would be divided between the defense budget and non-defense discretionary and mandatory spending for FY 2013-2021.

If the automatic cuts take effect, cuts in Medicare spending would be capped at 2%, but benefits to enrollees would not be cut. That means the Medicare spending cuts would be achieved through lowered payments to physicians and other Medicare providers.

The debt deal does not address the long-term fiscal health of the Medicare payment system (Sustainable Growth Rate or SGR), and physician pay rates are scheduled to be cut by 29.5% on January 1, 2012. The AMA informs the NCMS that the Medicare physician payment issue is expected to be addressed by the Deficit Reduction Committee, but that may prove to be challenging because of the savings levels the committee must achieve. Committee members will be selected by House and Senate leaders.

NCMS will be closely monitoring developments in the deficit reduction process and will keep members informed through special alerts, updates, analysis in the Bulletin, online at http://www.ncmedsoc.org/ and by email. We also will be in daily communication with the North Carolina Congressional Delegation working on behalf of physicians and their patients.

Editor’s Note: The AMA requested that the following article by AMA President Peter W. Carmel, MD, be included in our weekly communication to NCMS members.

As the nation’s largest physician organization, the American Medical Association (AMA) is uniquely positioned to help physicians thrive in medical practice throughout all stages of their careers. The AMA is the only organization in the country that represents all physicians across all specialties in every state, and is the physicians’ voice as lawmakers work on issues critical to the future of medicine. In North Carolina, the AMA is proud to support and work alongside the North Carolina Medical Society (NCMS) on a variety of issues important to physicians, including medical liability reform. The AMA is pleased that we were able to contribute to a big win for North Carolina physicians this week as the Governor’s veto of medical liability reform legislation was successfully overridden.

America’s medical liability system is broken, failing both patients and physicians. The current system limits patient access to health care, leads to additional tests and treatments, increases health care costs and creates a communication barrier between patients and physicians. For physicians, the system leads to meritless lawsuits, increases liability premiums and causes physicians to practice defensive medicine.

While the AMA continues to pursue medical liability reform at the federal level, state liability reforms are essential to ensuring that physicians can do what they do best – care for patients. The AMA Advocacy Resource Center (ARC) works closely with state medical associations to support their state legislative efforts, and the AMA Litigation Center collaborates with state medical associations to assist them when the liability battle shifts to the courts. In North Carolina, the AMA contributed $100,000 to NCMS’ successful liability reform marketing efforts in 2011 to help fix the broken medical liability system for both patients and physicians.

The AMA is working with the NCMS on other issues in addition to medical liability reform. North Carolina has faced steep Medicare payment cuts every year since 2002 due to the failed Medicare physician payment formula, and each year the AMA has been able to secure congressional action to prevent these cuts. Most recently, at the urging of the AMA and the Federation, Congress passed legislation to provide stable Medicare payments for all of 2011. This legislation is worth an average of $29,000 to each North Carolina physician.

The AMA also offers North Carolina physicians the opportunity to participate in Webinars and seminars on topics that affect their daily practice of medicine, such as how physicians can succeed with new payment models like medical homes and accountable care organizations. Physicians can also take advantage of resources designed to help them adopt health information technology and qualify for federal incentives, like the free resource ”A Clinician’s Guide to E-Prescribing.” The AMA will continue to provide resources and support to help physicians in North Carolina help their patients.

 The North Carolina Medical Society joined the AMA and 111 other state and medical specialty societies this week in sending a letter to the president, vice president and congressional leaders urging reform of the broken Medicare physician payment formula as part of any budget deficit reduction plan. Click here to read the letter.

Known as the Sustainable Growth Rate (SGR), the formula is set to trigger a drastic cut of nearly 30 percent on January 1, 2012 and threatens access to care for Medicare patients. The organizations told policymakers that the cost of physician payment reform has been growing over the years as Congress enacted frequent short-term fixes. As recently as 2005 the cost of permanent reform would have been $48 billion, but today it is estimated to be nearly $300 billion over the next ten years. If Congress does not act now, the cost will continue to escalate to $500 billion in only a few short years.

The NCMS supports an AMA call to repeal the failed SGR formula, implement a five-year period of stable Medicare physician payments, and testing demonstration and pilot projects that could form the basis for a new Medicare physician payment system.

The North Carolina Medical Society has joined with dozens of physician organizations in calling on Congress to repeal the sustainable growth rate (SGR) formula used to determine Medicare physician reimbursement. In letters to Senate Majority Leader Harry Reid and Republican Leader Mitch McConnell, and to House Speaker John Boehner and Democratic Leader Nancy Pelosi, more than 130 physician organizations urged Congress to enact legislation this year to eliminate the SGR and “lay the groundwork for adoption of broader physician payment and delivery reforms.”  Click to read Senate letter and House letter.

The NCMS also joined dozens of state medical societies and physician organizations in supporting HR 451—Healthcare Truth and Transparency Act of 2011. The “Sullivan-Scott” bill seeks to ensure that patients have accurate information about the education, training, and qualifications of individuals providing their health care services. Click here to read the letter.

The NCMS continues to work closely with the North Carolina Congressional Delegation in advocating for reforms that will promote access and allow physicians to provide the quality care their patients need. Watch for updates at http://www.ncmedsoc.org/.

Centers for Medicare and Medicaid Services (CMS) issued the following statement today:

President Obama Signs the Medicare and Medicaid Extenders Act of 2010

On Wednesday, December 15, 2010, President Obama signed into law the Medicare and Medicaid Extenders Act of 2010 (MMEA).  This new law prevents a scheduled payment cut for physicians who treat Medicare patients from taking effect. The Centers for Medicare & Medicaid Services (CMS) is pleased that this law has addressed key issues for beneficiaries and providers and we are actively engaged in implementing these changes. 

CMS is also working to implement several important new provisions for Medicare beneficiaries made possible by the Affordable Care Act – the health reform law.  In 2011:

• Beneficiaries who reach the prescription drug coverage gap, known as the donut hole, will receive a 50 percent discount when buying Part D-covered brand-name prescription drugs.
• Virtually all Medicare beneficiaries are eligible to receive many free preventive care services and a free annual wellness visit.

These provisions will improve care for Medicare beneficiaries and we encourage you to share this information with your patients.  More information on these Affordable Care Act provisions can be found at Medicare.gov and at healthcare.gov.  Healthcare.gov also contains a timeline and other key information about the new law and a highly praised insurance finder for coverage options in public and private insurance programs, which family members and friends of Medicare beneficiaries may find useful.

Below please find technical summaries of key provisions of the MMEA along with some information about how these changes may affect providers and provider billing. 

Physician Payment Update

Section 101 of the MMEA prevents a payment cut for physicians that would have taken effect on January 1, 2011.  While the physician fee schedule update will be zero percent, other changes to the relative value units (RVUs) used to calculate the fee schedule rates must be budget neutral.  To make those changes budget neutral, the conversion factor must be adjusted for 2011.  CMS is currently developing the 2011 Medicare Physician Fee Schedule (MPFS) to implement the zero percent update, and we expect all 2011 claims to be processed timely, in compliance with the new legislation.

Extension of Medicare Physician Work Geographic Adjustment Floo

Current law requires payment rates under the MPFS to be adjusted geographically for three factors to reflect differences in the cost of provider resources needed to furnish MPFS services:  physician work, practice expense, and malpractice expense.  Section 103 of the MMEA extends the existing 1.0 floor on the “physician work” geographic practice cost index, through December 31, 2011.  As with the physician payment update, this change will be accomplished through a revised 2011 MPFS.

Extension of Physician Fee Schedule Mental Health Add-On Payments

For calendar year 2010, certain mental health services’ payment rates continued to be increased by five percent.  Section 107 of the MMEA extends the five percent increase in payments for these mental health services, through December 31, 2011.  Similar to the zero percent update and the physician work geographic adjustment floor extension, the five percent increase will be reflected in the revised 2011 MPFS.

Extension of Medicare Modernization Act Section 508 Reclassifications

Section 102 of the MMEA extends Section 508 and special exception hospital reclassifications from October 1, 2010, through September 30, 2011.  Effective April 1, 2011, Section 102 also requires removing Section 508 and special exception wage data from the calculation of the reclassified wage index if doing so raises the reclassified wage index.  All hospitals affected by Section 102 of the MMEA shall be assigned an individual special wage index effective April 1, 2011.  If the Section 508 or special exception hospital’s wage index applicable for the period beginning on October 1, 2010, and ending on March 31, 2011, is lower than the period beginning on April 1, 2011, and ending on September 30, 2011, the hospital shall be paid an additional amount that reflects the difference between the wage indices.  The provision applies to both inpatient and outpatient hospital payments.  For hospital outpatient payments, a special exception hospital’s reclassified wage index will be applicable from January 1, 2011, through December 31, 2011.

 Extension of Exceptions Process for Medicare Therapy Caps

Section 104 of the MMEA extends the exceptions process for outpatient therapy caps.  Outpatient therapy service providers may continue to submit claims with the KX modifier, when an exception is appropriate, for services furnished on or after January 1, 2011, through December 31, 2011.  

The therapy caps are determined on a calendar year basis, so all patients begin a new cap year on January 1, 2011.  For physical therapy and speech language pathology services combined, the limit on incurred expenses is $1,870.  For occupational therapy services, the limit is $1,870.  Deductible and coinsurance amounts applied to therapy services count toward the amount accrued before a cap is reached.    

Extension of Moratorium On Independent Laboratory Billing for the Technical Component (TC) of Physician Pathology Services Furnished to Hospital Patients

In the final physician fee schedule regulation published in the Federal Register on November 2, 1999, CMS stated that it would implement a policy to pay only the hospital for the TC of physician pathology services furnished to hospital patients.   At the request of the industry, to allow independent laboratories and hospitals sufficient time to negotiate arrangements, the implementation of this rule was administratively delayed.  Subsequent legislation formalized a moratorium on the implementation of the rule. 

Although the previous extension of the moratorium expired at the end of 2010, the MMEA restores the moratorium through 2011.  Therefore, independent laboratories may continue to submit claims to Medicare for the TC of physician pathology services furnished to patients of a hospital, regardless of the beneficiary’s hospitalization status (inpatient or outpatient) on the date that the service was performed.  This policy is effective for claims with dates of service on or after January 1, 2011, through December 31, 2011.

Extension of Ambulance Add-On Payments

The provisions that were extended by Section 106 of the MMEA are: (1) the 3 percent increase in the ambulance fee schedule amounts for covered ground ambulance transports that originate in rural areas and the 2 percent increase for covered ground ambulance transports that originate in urban areas; (2) the provision relating to air ambulance services that considers any area that was designated as a rural area as of December 31, 2006, shall continue to be treated as a rural area for purposes of making payments under the ambulance fee schedule for such air ambulance services; and (3) the provision relating to payment for ground ambulance services where the base rate is increased when the ambulance transport originates in an area that is included in those areas comprising the lowest 25^th percentile of all rural populations arrayed by population density.

All of these payment provisions are extended through December 31, 2011.

Extension of Outpatient Hold Harmless Provision

Section 108 of the MMEA extends the Outpatient Hold Harmless provision, effective for dates of service on and after January 1, 2011, through December 31, 2011, to rural hospitals with 100 or fewer beds and to all sole community hospitals and Essential Access Community Hospitals regardless of bed size. 

Extension of Medicare Reasonable Cost Payment for Clinical Lab Tests Furnished to Hospital Patients in Certain Rural Areas

Section 109 of the MMEA extends the reasonable cost payment for clinical lab tests furnished by hospitals with fewer than 50 beds in qualified rural areas as part of their outpatient services for cost reporting periods beginning on or after July 1, 2011, through June 30, 2012.  This could affect services furnished as late as June 30, 2013. 

If your hospital qualifies under Section 109, you do not need to take any action.  Your hospital will receive reasonable cost reimbursement for an entire year, starting with the facility cost reporting period beginning on or after July 1, 2011.

Repeal of the Delay of RUG-IV

Section 202 of the MMEA repeals the delay of the Skilled Nursing Facility (SNF) PPS RUG-IV classification system.  Therefore, RUG- IV will continue to remain in effect from October 1, 2010, as previously implemented by the final SNF payment regulation for FY 2011.   All claims processing activities shall proceed in accordance with the existing instructions.

President Obama signed the Medicare and Medicaid Extenders Act of 2010 on Wednesday, December 15, 2010, delaying a 25% cut in Medicare physician payments through the end of 2011.  The cut would have taken effect on January 1, 2011.

The estimated total impact from the change in Medicare allowed charges is $20.49 billion dollars, according to the AMA Economic and Health Policy Research Division. In North Carolina, the average impact per physician is estimated to be $29,000.

Click here to view the Medicare Extension Impact Table, which shows the impact state-by-state.

By a vote of 409 to 2, the U.S. House passed H.R. 4994, the “Medicare and Medicaid Extenders Act of 2010,” on Thursday. The bill, which passed the Senate by unanimous consent on Wednesday, would stabilize Medicare physician payments at current rates through the end of 2011. It now goes to the White House for President Obama to sign into law.

The bill provides a 12-month reprieve from the 25 percent Medicare physician payment cut that had been scheduled to take effect on January 1. It also extends a number of payment policies that were set to expire at the end of the year and includes funds to enable Medicare contractors to reprocess claims for physician services affected by the Affordable Care Act passed last spring with a retroactive effective date of January 1, 2010.

In a statement issued Wednesday, President Obama said: “It’s time for a permanent solution that seniors and their doctors can depend on, and I look forward to working with Congress to address this matter once and for all in the coming year.”

The NCMS will continue to work with the NC Congressional Delegation in seeking a permanent replacement for the troublesome SGR during the 2011 session.

On Tuesday, the U.S. House passed “red flag” legislation that exempts physicians from the anti-identity theft requirements and safeguards that apply to banks and other creditors. The Senate had previously approved the bill, which went to the White House for the President’s signature. The NCMS, AMA and other physician groups sought the statutory exemption after the Federal Trade Commission proposed the red flag rule earlier this year.

The NCMS urges you to thank your Representatives and Senators for passing this important legislation.  Click here for Congressional contact information.

Leaders of The Physicians Foundation have published an op-ed addressing the uncertainty that surrounds the Affordable Care Act, which became law last March. The Foundation is a national non-profit organization that advances the work of practicing physicians. President Louis J. Goodman, PhD, and Executive Director Timothy B. Norbeck co-authored the commentary, addressing physicians’ concerns over accountable care organizations (ACOs) and the troublesome Medicare physician payment formula. Read the op-ed, which was published November 26, 2010 in The Record, a newspaper serving northern New Jersey.

By a voice vote, the U.S. House of Representatives approved legislation on Tuesday that provided a 31-day reprieve from the 23 percent Medicare physician payment cut that had been scheduled to take effect on December 1.  Because the Senate already approved the bill by unanimous consent on November 18, the measure was sent to the White House to be signed into law.

The lame duck Congressional session is expected to continue for up to three weeks, during which additional legislation must be passed to stop a 25 percent Medicare physician payment cut that is scheduled for January 1, 2011.

Your NCMS urges you to contact your Representatives and Senators today and ask them to support legislation that would provide stable physician payments through the end of 2011, until a new payment proposal can be developed to replace the broken sustainable growth rate (SGR) formula.

CLICK HERE for information on contacting members of the North Carolina Congressional Delegation.

On Monday, the AARP began running newspaper and radio ads in 13 states, including North Carolina, urging Congress to act to preserve seniors’ access to physicians. The ad campaign follows a mailing to over 2 million households and a phone campaign prior to Thanksgiving that generated 18,000 phone calls to congressional offices over a few days.

Thanks in large part to the calls from you, your peers, your office managers and other healthcare professional from across the country, the US Senate took action to delay the pending cut last night.  The latest details received in a press release from the AMA include: 

The U.S. Senate’s action last night to stop the Medicare cut for one month will help avert a health care access crisis for seniors that would have begun in just two weeks. This is a short-term reprieve, and the AMA is urging Congress to pass a one-year fix as soon as they return from the Thanksgiving holiday. Delaying the 25 percent cut to the end of 2011 will inject some stability into the Medicare program for patients and physicians and provide lawmakers with time to develop a long-term solution to the broken physician payment system.

Now the U.S. House must act on the legislation passed by the Senate before the December 1 deadline to preserve health care for America’s seniors. The AMA thanks Senator Reid, Senator McConnell, Senator Baucus, Senator Grassley and President Obama for their efforts to stave off the Medicare cut and preserve access to physician care for seniors and military families.

 This week, patients and physicians flooded congressional phone lines urging action to stop the cut with more than 10,000 calls made during the AMA’s “White Coat Wednesday.” The Senate listened to the voice of the American people and took quick action, but there is more work to do to prevent a Medicare meltdown. Our new poll found that four out of five people want Congress to act immediately to stop the Medicare physician payment cut. The AMA will stay closely engaged to ensure that Congress takes quick action to stop the cut for 12 months before the latest deadline expires on January 1 and the 25 percent cut begins. 

Our work continues as Congress comes back to work after the Holiday.  This reprieve only carries us through to December 31^st.  We will still need your help to push for a long term solution before the New Year.  Watch your email and the Bulletin for an Action Alert right after Thanksgiving to provide you with talking points and easy access to your delegates.  Thank you for contributing your voice to this effort.

Unless Congress acts, Medicare will cut physician payments 23 percent effective December 1, 2010. The NCMS and many physician groups continue to urge Congressional leaders to avert a Medicare crisis for seniors by stopping the cut for at least 13 months, then use the timeframe to fix the broken sustainable growth rate (SGR) formula used to determine Medicare reimbursement fees.

CLICK HERE to contact your Representative and Senators about permanently fixing the broken SGR.

Since the SGR problem first emerged, Congress has simply chosen to use short-term delays without trying to correct the problem. Delays have only allowed the cuts to grow larger and prompted more physicians to either opt out of Medicare or limit the number of Medicare patients they see. An AMA physician survey earlier this year showed a sizeable number of physicians would consider leaving Medicare or no longer see new Medicare patients if Medicare imposes a double-digit cut. For small and rural practices, the problem is especially serious because such cuts would negatively impact the financial stability of their practices and their ability to provide access to health care for seniors.

In a special column released this week, AMA President Cecil Wilson, MD, explains the importance of physician involvement in getting Congress to stop the cut.  Read the article now.

In a letter to US House leaders, the NCMS has joined with other state medical societies, the AMA and national specialty organizations in asking Congress to act in early November to avoid a pending 23% cut in Medicare and TRICARE physician payments. The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 stabilized Medicare physician payments until November 30, 2010. The proposed cuts would take effect December 1, with an additional cut of 6.5% scheduled for January 1, 2011.

The organizations want Congress to find a permanent solution to the sustainable growth rate (SGR), the formula used to determine Medicare physician payments, and replace it with a system that can keep pace with the cost of caring for seniors. Thus far, Congress has chosen to delay cuts using short-term, stop-gap measures.

The letter notes that the next payment reduction comes “during the period when physicians may change their status from a Medicare participating physician, who accepts Medicare’s allowance as a payment in full, to a non-participating physician who may bill patients more than the Medicare allowance.” The perpetual uncertainty regarding Congressional support for the Medicare program has caused many physicians to either leave the Medicare program or restrict the number of Medicare patients they see. This poses a risk to access for seniors, especially in rural areas where smaller practices often serve a larger than average number of Medicare patients and cannot afford large cuts in Medicare physician payments.

The NCMS is urging its members to contact their US Representatives and Senators today and urge them to act in the first week of the lame-duck session of Congress to avert a Medicare physician access crisis.

You can see how your representative and your senators have voted on the SGR issue in the past.

Here’s a quick glance with links to important information about practice management, professional development, and other items of interest to physicians.

…Sign the Stop the Medicare Meltdown Petition and download a flyer to urge your patients to sign, too.  Click here to contact your Congressman about permanently repealing the SGR.

…Call for Resolutions for the 2010 House of Delegates (Deadline is September 8, 2010)

…Attention NCMS physician, PA, and med student members:  we need you to share your photographic talents with others. Take part in our 3rd Annual Photo Contest! Send in your favorite shots from your latest vacation or a fabulous abstract take on your surroundings by Sept. 1.

Signatures are still being sought for the Stop the Medicare Meltdown petition campaign being led by the Texas Medical Association.  The NCMS and other state organizations have joined in the campaign in an effort to get Congress to permanently repeal using the sustainable growth rate (SGR) to determine Medicare physician reimbursement fees. Current plans call for presenting the petition to Congress following its August recess.

Physicians and patients can sign the petition online, and a downloadable flyer is available to encourage patients to participate.

President Obama signed HR 3962 into law last Friday, after the House and Senate agreed to a six-month delay in the proposed cut to Medicare physician fees. The law included a 2.2 percent update in the Medicare fee schedule for physician services through November 2010. Reacting to the latest Congressional delay, AMA President Cecil B. Wilson, MD, said, “In December, the Medicare physician payment cut will be a whopping 23 percent, increasing to nearly 30 percent in January…Congress must replace the broken payment system before the damage is done and cannot be reversed.”

As the law took effect, the Centers for Medicare and Medicaid Services issued an update on how June Medicare claims would be processed.

The NCMS continues to ask the North Carolina Congressional Delegation to repeal the SGR. Click here to contact your Representative or Senator today.