ASH Signs Letter Urging Physician Payment Policy Changes

May 2, 2007 – ASH along with 85 other provider groups signed an April 20 letter urging Centers for Medicare and Medicaid Services (CMS) Administrator Leslie Norwalk to adopt policy changes that would provide short-term and long-term resolutions to the problematic physician update methodology.

The policy changes outlined in the letter include applying the $1.35 billion Physician Assistance and Quality Initiatives Fund to the CY 2008 conversion factor update. The Fund, established by the Tax Relief and Health Care Act of 2006 (P.L. 109-432), “will help lower the cost of Congressional action” needed to lessen the projected 10 percent cut. The Medicare Payment Advisory Commission (MedPAC) made a similar recommendation in its March 2007 Report to Congress.

The letter also strongly urges the Administration to reduce the CY 2008 productivity adjustment to the Medicare Economic Index (MEI) from 1.45 percent to 0.65 percent. This would match the productivity adjustment recommended for other Medicare providers.

Reiterating the physician community’s belief that CMS should remove the cost of Part B drugs from the update methodology, the letter advises that such action would “reduce the pressure on Congress to find other offsets.” The letter also reiterates previous recommendations to include national Medicare coverage determinations in the “law and regulation” portion of the update calculation. If such action is not possible, the letter suggests excluding from the calculation for at least two years all services affected by national coverage determinations.