Posts Tagged ‘Medicare’

Supercommittee’s failure leaves little time to avert Medicare cut

You’ve probably heard by now that the Joint Select Committee on Deficit Reduction, the “supercommittee,” failed in its efforts to reach a budget compromise. The 12 congressional lawmakers had until Thanksgiving to formulate a plan to trim at least $1.2 trillion in federal spending, and health care advocates hoped they’d also include a fix for the flawed Medicare payment formula, the SGR, in this plan.

This wasn’t wishful thinking; years of temporary fixes weigh heavily on the deficit. Plus, the committee had been granted special authorization to find and score savings wherever they could. Up until this point, insiders promised that committee members were seriously considering including an SGR fix, which would prevent a planned 27.4-percent cut in Medicare physician payment come Jan. 1. Not only is this cut still on the table, automatic reductions triggered by the supercommittee’s inaction will cut another 2 percent in Medicare payment in 2013.

A health care lobbyist told the Associated Press that “lawmakers of both parties wanted to deal with the cuts to doctors, but a fundamental partisan divide over tax increases blocked progress of any kind.”

In failing to act, they have “condemned millions of elderly and disabled Americans to continued health insecurity,” said AAFP President Glen R. Stream, M.D., M.B.I., in a statement. “This is no way to address the federal budget deficit. Nor is it the way to serve their constituents. Allowing the Medicare physician payment issue to fester worsens the health insecurity of millions of elderly patients and military families.” Read the full statement here.

With a little more than a month to go before the end of the year, there’s still time to pass another one- or two-year “doc fix,” and entering the 2012 campaign season, a short-term patch has wide support among Congressional lawmakers. But the question remains whether Congress as a whole can overcome the same gridlock that paralyzed the supercommittee.

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Developments in Medicare physician pay…plus the backup plan

Now that the 12 members of the Joint Select Committee on Deficit Reduction have begun meeting to develop a plan to trim at least $1.2 trillion in federal spending, advocacy groups and politicos have ramped up their effort to influence what goes on to and what stays off of the chopping block.

Since our last blog post, AAFP has taken significant steps to encourage the supercommittee to avoid making damaging cuts to Medicare and graduate medical education. AAFP met with representatives from seven medical societies and seven professional organizations on Sept. 7 to develop a unified strategy for the house of medicine, with AAFP still holding strong to the position that the SGR should be repealed or, barring that, the committee should enact a five-year Medicare payment fix that includes a 3-percent higher payment rate for primary care physicians.

During this week’s Congress of Delegates meeting, AAFP launched a grassroots campaign that calls for AAFP Delegates and other members to send a letter to their Congressional representatives asking for immediate repeal of the SGR. AAFP already sent its own letter to the “super 12” on Aug. 10 outlining its asks, and the 12 AAFP state chapters in which a supercommittee member lives requested meetings with their super person during the Congressional recess that extended through Labor Day. Texas is, of course, home to committee co-chair U.S. Rep. Jeb Hensarling, and Doug Curran, M.D., TAFP past president, current TMA board member, and constituent from Athens, has a meeting scheduled with the representative in the next couple of weeks.

Additionally, AAFP Board Chair Roland Goertz, M.D., M.B.A., of Waco said in an interview with Family Practice News digital network that the Academy will produce videos featuring “real family physicians who describe the real impact of these cuts for their practices,” in the hope that the videos go viral and incite larger action.

Most important, Goertz told AAFP members in the FPN video interview that physicians need to step up and take action. “Don’t go to sleep on this issue. We’ve been fighting this for 10 years. Don’t get fatigued about contacting those who represent you.”

“This is a big, big deal. A 29.5-percent cut in a payer source, particularly in Medicare, is going to put some practices out of business in some locations. So mobilize yourself, contact your elected officials, and if you feel comfortable with it, make sure you involve your patients because your patients are going to be the ones who unfortunately will suffer the outcomes.”

AAFP and other experts have acknowledged that the supercommittee may not address the SGR in their budget plan – because once again it may be too big an issue to tackle along with all of the other considerations. Hence, AAFP’s request for a five-year fix and 3-percent pay bump for primary care.

Another SGR-replacement idea released recently by the Medicare Payment Advisory Commission would implement a 10-year fix at a cost of around $200 billion. Though MedPAC’s plan would just replace one form of automatic payment cuts with different automatic payment cuts, it does include protections for primary care.

Kaiser Health News reports on their blog: “Reimbursements for primary care physicians would be frozen for 10 years, and specialists would see a reduction in payments for three years, at which time their rates would also be frozen.”

As Goertz said in an interview with AAFP News Now, “This is a game in evolution, and there are going to be some twists and turns.”

Hang on.

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Déjà vu all over again, the Medicare physician fee debate is back

Last month’s debate on the U.S. debt ceiling brought to light the ugly side of how we finance the nation’s operations, and as lawmakers move forward on a deal to reduce the deficit, they will inevitably turn their eyes to one of the country’s biggest expenses: Medicare. Federal spending for fiscal year 2010 totaled $3.5 trillion and Medicare comprised 15 percent of the total amount.

However, with crisis comes opportunity and a convergence of factors may make this the time to address a structural deficit in how the country pays physicians and other providers for the services they provide to Medicare beneficiaries.

Under the debt deal, a 12-member joint committee has until Thanksgiving to formulate a plan to cut at least $1.2 trillion in spending over the next 10 years. Then, recommendations made by the so-called “supercommittee” must go before Congress and pass by a simple majority in both chambers by Christmas. If the committee can’t agree on cuts or Congress fails to pass them, a series of across-the-board reductions would be triggered. One cuts pay to Medicare providers by up to 2 percent starting in 2013, which experts estimate would add up to around $12 billion.

While a reduction of any amount hurts, there is a bigger problem on the horizon: the Medicare physician payment formula, known as the Sustainable Growth Rate or SGR. Under the SGR, a across-the-board 29.5-percent cut would take effect on Jan. 1, 2012.

Every congressional budget cycle since 1997 has included a reduction in Medicare payments that has eventually been modified. Since 2002, Congress has stepped in 12 times to stop the cut, including four times last year. And each year that Congress provides a temporary patch, the price tag gets steeper. According to the AMA, if Congress were to wait until 2016 to eliminate the SGR, the combined price of providing temporary patches and fixing the structural problem would approach $600 billion.

Now it boils down to deficit reduction; if Congress doesn’t address the broken SGR in some way, it will continue adding to the deficit. This gives the argument to repeal the SGR strength it hasn’t had in previous years.

The real value of the supercommittee is that there are no restrictions on what they can recommend to cut or how it scores savings; its jurisdiction gives the 12 members the ability to find offsets for other spending in all areas of government. By virtue of normal committee jurisdiction, fixing the SGR—a Medicare Part B issue—would usually mean finding offsets only within Medicare Part B, and that hasn’t been possible without hurting the program. Similarly, the supercommittee could recommend federal medical liability reform and score those savings toward deficit reduction.  

Late last month, the American Medical Association and 10 specialty societies (including AAFP) sent a video to Congress on the need for full repeal of Medicare’s flawed Sustainable Growth Rate formula. At just over two minutes long, a combination of text and eerie techno-classical music sets the scene: “By acting now, Congress can preserve access to care for people on Medicare and reduce Medicare spending by hundreds of billions of dollars. Or it can put off a solution…again.” Weaving through charts and graphs, they make the golden deficit-reduction argument, ending with the final statement: “Stop digging the hole. Pay the bill. Repeal the SGR.”

[Can’t see the embedded video above? View here: http://youtu.be/jNmuyZWi3qc]

The AMA proposes a three-pronged approach: repeal the SGR; provide five years of stable payments with positive annual updates; and transition to a broad array of payment and delivery innovations.

AAFP outlined similar asks in a letter sent to supercommittee members last week. First, stabilize Medicare payments to physicians by repealing the SGR, and specify a payment rate for the next 3 to 5 years with a 3-percent higher rate for primary care physicians delivering primary care services. Second, avoid making reductions in Graduate Medical Education, especially GME payments for primary care education and training, to protect the physician workforce.

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It’s time to read up on the RAC

Okay, if you haven’t started getting serious about educating yourself about the Recovery Audit Contractor program, it’s about time you should.

RACs are third parties hired by the Centers for Medicare and Medicaid Services to ensure that physicians are being paid correctly for Medicare Part A and B services. They identify all “improper payments,” whether the physician received too much or too little, and in return receive a share of the booty—I mean, spoils—I mean, identified payments. [Don’t mind me, it’s Friday.]

CMS released an update in late April that showed that in its first 18 months, the permanent RAC program had identified a total of $365.8 million in total improper payments—$312.2 million in overpayments and $52.6 million in underpayments. The agency attributed the four big reasons for improper payments to incorrect coding and billing for bundled services.

The three-year demonstration was wildly successful, too, with more than $900 million in overpayments collected from physicians and suppliers from six states (California, Florida, New York, Massachusetts, South Carolina, and Arizona) and less than $38 million in underpayments repaid.

RACs came to Texas in March 2009 and Connolly Healthcare won the contract for our region, Region C.

Bradley Reiner, TAFP’s practice management consultant, recommends that physicians be involved in the billing process, and implement a compliance plan so employees are aware of potential errors and how to fix them before they become big problems.

The compliance plan is detailed in the second part of an article Bradley wrote for Texas Family Physician in fall 2010. “Ready or not, Recovery Audit Contractors are coming” explains how the program works, how to minimize the risk of being audited, and what to do if you are. Bradley wrote another article in the winter 2009 issue, “Are you ready for the RAC?,” that details the demonstration project.

Both of these will help get you thinking about the RACs so you’ll be prepared if they knock on your door (rather, send a letter). TAFP members can also contact Bradley by phone at (512) 858-1570, or by e-mail at breiner@austin.rr.com for a consultation and discounted services.

The take-away message is that you can’t ignore them. As Bradley says, “If they continue to be successful there is no doubt everyone will have a RAC audit sooner or later. In almost every practice a RAC can find some billing, coding, or documentation issue during any given audit … . The rules are too complex and differ from payer to payer.”

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Is it time to declare independence from the RUC?

In a recent opinion column published in Kaiser Health news, two prominent voices in health care policy gave primary care physicians a piece of revolutionary advice: Quit the RUC.

If you don’t know what the RUC is, you aren’t alone.

RUC stands for the Relative Value Scale Update Committee, a group of 29 physicians from various medical specialties that meets three times a year to advise the Centers for Medicare and Medicaid Services on Medicare physician fee reimbursement and how certain procedures should be valued. Created by the American Medical Association in 1991, the committee has no official government standing, yet it yields great power.

CMS approves 90-94 percent of the committee’s suggestions, and because many government and commercial health plans follow Medicare’s lead to set their own fee schedules, its influence bleeds into other markets as well.

So what’s the problem? The committee is overwhelmingly dominated by specialists, outnumbering primary care physicians by a ratio of 6:1 or 13:1 depending on whether you count internal medicine, osteopathy, and pediatrics. As such, Brian Keppler, Ph.D., and David Kibbe, M.D., M.B.A., write that its payment recommendations have “consistently favored specialists at the expense of primary care physicians.” They point out that, on average, specialists out-earn primary care physicians by $135,000 a year and $3.5 million over the course of their careers.

In the $500-billion Medicare program, physician fees make up just one piece of the pie and the RUC cannot be blamed solely for the spiraling costs of health care. However, the authors assert that “the perverse incentives embedded in fee-for-service physician payments influence care decisions and are a principle driver of the health system’s immense excesses.” Further, “the system pays more for invasive approaches, so conservative treatment choices that are lower cost and lower risk to the patient may be passed over, especially near the end of life.”

They recommend that TAFP, along with other primary care medical specialty societies in the country, “loudly and visibly leave, while presenting evidence that the process has been unfair to their physicians and, worse, to American patients and purchasers.”

The AAFP Congress of Delegates has debated the question of leaving the RUC in recent years, and AAFP has been active on several fronts trying to get more primary care representation on the RUC and to get CMS to reconsider its decisions when accepting recommendations from the RUC.

There are also other ideas floating around to curb the RUC’s influence. One comes from physician-politician Jim McDermott, a U.S. representative from Washington. He wrote in an opinion column for the New England Journal of Medicine, “Congress should consider enlarging or realigning the composition of the RUC, if not demoting it to an advisory function and requiring greater transparency of its deliberations.”

Additionally, a provision in the health care reform law creates the Independent Payment Advisory Board that is tasked with capping Medicare spending beginning in 2015. Much of the momentum for creating such an entity was aimed directly at counteracting the inflationary bent of the RUC’s recommendations.

Interesting to point out is recent action from the AMA, American Hospital Association, and other specialty groups to weaken or quash the IPAB.

AAFP supported the concept, though has not been entirely happy with all aspects of the IPAB in the final legislation and continues to push for changes, such as including a primary care representative and a consumer representative to the board, including a public comment period before Congress acts on the IPAB recommendations, and including all segments of the health care industry (i.e., hospitals, nursing homes, pharmaceutical manufacturers, etc.) in the scope of the IPAB review.

Whatever happens, it certainly sounds like the RUC is in for some changes.

Read the Keppler/Kibbe article here: http://www.kaiserhealthnews.org/Columns/2011/January/012111kepplerkibbe.aspx

Read more about the IPAB here: http://www.kaiserhealthnews.org/Stories/2011/January/26/health-industry-lawmakers-medicare-spending-board-IPAB.aspx

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