Time tight in Medicare fight to defend some pay provisions, block add-ons

Rural physician payment extensions and therapy cap exceptions are among the items given a temporary reprieve in the Medicare/SCHIP package.

By David Glendinning, AMNews staff.

With just six months before many provisions in the new Medicare law expire, physicians already are hastening to get several payment provisions extended. At the same time, they’re trying to prevent lawmakers from tacking initiatives opposed by organized medicine onto any payment reform legislation.

The “Medicare, Medicaid and State Children’s Health Insurance Program Extension Act of 2007,” which turned a 10.1% across-the-board Medicare physician payment cut into a 0.5% increase, included additional Medicare language that aims to help physicians in certain areas and within certain specialties. The American Medical Association and other physician organizations pushed for longer extensions. But as with the across-the-board payment boost, most of these provisions will expire June 30 unless Congress passes additional legislation to renew them.

Congress and the White House agreed to extend a floor of 1.0 on Medicare’s work geographic practice cost index, or work GPCI, which helps determine how much physicians in different parts of the country are paid for the work they do in providing care.

The geographic work adjustment produces lower payment rates in rural areas, where the cost of practicing medicine is typically lower than in urban areas. But many physicians complained that the formula was reducing their payments too much. The floor helps rural doctors who are paid less for their work when compared with their urban counterparts.

The new law also preserves an extra boost for physicians practicing in rural areas with few other doctors or in other underserved regions. For at least the next six months, doctors in parts of the country that the government has classified as physician scarcity areas will continue to receive a special 5% bonus Medicare payment designed to attract more of them to these regions.

The Medicare/SCHIP package did not include everything that rural physicians had asked for, but the extensions that did make the cut are needed to help keep Medicare alive for beneficiaries in those regions, said Maggie Elehwany, the National Rural Health Assn.’s vice president of government affairs and policy. She said the access situation already had become a problem in some areas.

“People are always talking about the possibility of physicians dropping out of Medicare. Well, they are dropping out in rural areas,” she said. “It’s sad, because they really do want to work there.”

Rural doctors are not the only ones benefiting from the Medicare additions to the package. Physiatrists and other physicians who provide therapy services worried that the new year would bring new barriers to their care for beneficiaries. In 2008, Medicare still will have a $1,810 cap on physical and speech therapy — and a separate $1,810 cap on occupational therapy. But for at least the next six months, physicians and other health professionals will continue to have access to an exceptions process that can get them around the caps if any of their patients hit the limits before then. If the treating physician is able to demonstrate to Medicare that additional therapy beyond the caps is medically necessary, the program will pay for it.

Facing the expiration of the exceptions process on top of the looming 10.1% across-the-board cut was not a pleasant prospect last fall for physicians who treat these patients, said Robert B. Goldberg, MD, a physiatrist and president of the Medical Society of the State of New York. For the first time in many years, his practice consulted Medicare’s 2008 participation options when the possibility arose that Congress might not act in time.
Clock ticking

Although the six-month span of the 0.5% pay boost and the Medicare rural reimbursement provisions provide some relief to doctors, it doesn’t leave much time for lawmakers to approve a more permanent solution.

The AMA is pleased about the cut reversal and the rural provisions but disappointed that all of the payment provisions will expire at the end of June, said AMA Board of Trustees Chair Edward L. Langston, MD.

“Over the next few months, the AMA will vigorously advocate for Congress to take action to extend these provisions and stop the cuts for the next two years so that long-term reform can be addressed,” he said.

The six-month patch, unprecedented for a Medicare physician payment measure, also makes it very difficult for practices to plan their full year ahead from a patient care and financial standpoint, Dr. Goldberg and Elehwany said. The Centers for Medicare & Medicaid Services has not said whether physicians who signed on to participate in Medicare in 2008 will be able to change their participation status midyear if Congress fails to reverse the July cut.

“Let’s say Congress just extends everything through the rest of the year,” Dr. Goldberg said. “So is this going to be a six-month battle now as opposed to an annual battle?”

Senate Finance Committee leaders, who were pushing for a more long-term Medicare package, expressed hope that Congress would be able to get its act together in time to end the uncertainty. The panel’s top Republican, Sen. Charles Grassley of Iowa, said the package signed by President Bush on Dec. 29, 2007, would serve as a “stopgap” for lawmakers to finish a job that became mired in the legislative process last fall.
Dodging bullets

Although six months gives Congress more time to finish the job on Medicare payments, it also gives lawmakers more time to include provisions that some organized medicine officials are not as keen on seeing become law. Physicians resisted several changes in law that were considered for inclusion in the year-end package but ultimately dropped.

“The final bill did not include provisions that would restrict physician ownership of hospitals and additional reductions in payments for imaging services, and the AMA will continue its advocacy on these two issues for physicians,” Dr. Langston said.

Grassley said he would push to limit physician-owned specialty hospitals as part of any Medicare payment package that Congress considers this year.

Cuts to imaging services also are likely to be in play as Congress struggles to pay for a more permanent solution to Medicare’s payment problems. Lawmakers last year considered reductions in how much Medicare pays to administer imaging scans, but this language did not get to the final approval stage. They also considered legislation that would divide physician services into six separate categories and slash payments in the categories, such as imaging, where the government considered spending growth too high.

“Delaying the [Medicare physician payment] cuts without reforming the system means that further cuts to the technical component of imaging will most likely be back on the table as Congress scrambles for additional revenue to pay for another ‘fix’ in early 2008,” said Josh Cooper, the American College of Radiology’s senior director of government affairs.

Some lawmakers and interest groups tout a Medicare electronic prescribing requirement as a potential money saver for the program that would be a natural fit in any payment package. The AMA and other physician organizations support e-prescribing but do not back an unfunded mandate on doctors.

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More Medicare provisions

The Medicare/SCHIP package that became law on Dec. 29, 2007, included a number of Medicare provisions in addition to the physician pay boost, rural provisions and therapy cap exceptions. The new statute also:

* Allows independent labs through June 30 to continue to bill Medicare directly for the technical component of certain physician pathology services provided to hospitals.
* Extends the current “charges to cost” methodology through June 30 to provide a separate payment for brachytherapy services, including therapeutic radiopharmaceuticals.
* Continues to provide reasonable cost reimbursement through June 30 for clinical lab tests performed by certain small rural hospitals as part of their outpatient services.
* Extends a provision through June 30 that permits physicians ordered to active duty in the armed services to engage in substitute billing arrangements for longer than 60 days.
* Requires CMS to adjust its average sales price calculation for Part B drugs to use prices based on actual sales volume.
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