ASH Advocates for Fair Physician Reimbursement; New Medicare Rules to be Implemented January 1
Samuel Silver, MD
Dr. Silver is Professor, Department of Internal Medicine, and Director, Cancer Center Network, at the University of Michigan.
As this issue of The Hematologist went to press, final rules concerning the physician fee schedule and the hospital outpatient payment system for 2007 were pending. These reimbursement rules are in addition to changes previously announced in a proposed rule, which incorporated changes in the practice expense methodology and revisions resulting from the five-year review of physician work values.
Proposed changes from the accepted reimbursement rules will be implemented January 1, 2007. Last-minute legislative changes are possible and could significantly alter how proposed changes actually are finalized. In addition, there has been significant interest on Capitol Hill in reigning in the cost of the Medicare program by tying Medicare reimbursement to reporting on various quality measures. The concept of such pay-for-performance (P4P) or “value-based purchasing” programs has been gaining acceptance and momentum across federal and private payers alike.
Unless Congress legislates changes, Medicare payments to physicians will decrease by 5.1 percent. The reduction is largely attributable to the fact that physician spending substantially exceeded the target rate established by the Sustainable Growth Rate system (SGR). The SGR is a formula that is universally considered flawed by organized medicine, as well as many members of Congress and CMS. ASH and other specialties have urged Congress and CMS to repair the flawed formula. While a couple of legislative proposals have been circulated, action is stalled in part due to the price tag and in part because increasing physician payment will cause an increase to the beneficiary Part B premium — a concept not popular, particularly right before the November elections.
Hematology-oncology is expected to see an increase in total relative values for 2007 of about 2 percent, so combined with the scheduled decrease, the specialty overall can expect about a three-percent reduction in Medicare reimbursement. Actual amounts will vary across practices, depending on the mix of services rendered. Rural states, such as Montana, North Dakota, South Dakota, and Wyoming can anticipate further cuts of up to three percent due to changes to the Geographic Practice Cost Index.
On the outpatient side, Medicare has proposed tying full outpatient reimbursement to compliance with inpatient reporting on quality measures. If hospitals fail to report on inpatient quality measures, the outpatient reimbursement may be reduced by up to 2 percent. This is another indicator of the Agency’s intent to move to a reimbursement model based on P4P.
Overall, hospital outpatient departments will receive a 3.4 percent increase in the update for inflation. Significant payment changes are proposed including increases of 20 percent for apheresis codes 36515 and 36516 as well as photopheresis code 36522. Bone marrow harvesting, biopsy, and transplant codes are either kept about the same or are slightly reduced. There were substantial reductions in the proposed payment rates for the technical component of flow cytometry services. The temporary pre-administration code for intravenous immunoglobulin (IVIG) will be discontinued beginning in 2007.
ASH has actively campaigned for Medicare to fairly reimburse physicians. This has included lobby days and advocacy campaigns to prevent the physician payment cuts and the development of hematology performance measures to be used in future P4P programs.
A complete update on the final physician payment rules and status of P4P will be presented at the ASH Practice Forum, “Pay-for-Performance: Are You Ready?” on Saturday, December 9, from 6:00 p.m.-7:30 p.m. at the annual meeting in Orlando.
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News Headlines from Washington
Analysis of Mid-Term Elections
This issue of The Hematologist went to press prior to the November elections. Visit the ASH Web site for an analysis of what the election results may mean for ASH’s legislative agenda.
House Energy and Commerce Committee Passes NIH Reauthorization Bill
The House Committee on Energy and Commerce approved by a vote of 42-1 a reauthorization bill that would reform the National Institutes of Health (NIH) and increase its funding. The legislative proposal would boost annual NIH funding by 5 percent, would create a “common fund” to promote cross-agency research, and would establish an electronic catalog of all agency research activities. It also would create a Scientific Management Review Board to review NIH’s structural organization every seven years. The Senate committee with jurisdiction over NIH had not taken up reauthorization legislation, so it is likely that new legislation will have to be introduced at the start of the next Congress in January.
Medicare Premiums Begin to Vary in 2007
Beginning in 2007, wealthier Medicare beneficiaries will pay higher Medicare premiums. A surcharge will be added to the basic premium, with higher surcharges for higher-income beneficiaries. The surcharge will be phased in between 2007 and 2009. For beneficiaries with incomes over $200,000, the monthly Medicare premium is expected to exceed $375 by 2009.
New Acting Medicare Administrator Named
On October 15, Mark McClellan, MD, PhD, stepped down from his position as Medicare Administrator. Dr. McClellan was Administrator of CMS from March 2004 through October 2006, and was instrumental in the development and implementation of Medicare Part D, the prescription drug benefit. U.S. Health and Human Services Secretary Michael O. Leavitt has named Leslie Norwalk, Esq., the new Acting Administrator for the Centers for Medicare and Medicaid Services (CMS) and Herb Kuhn Acting Deputy Administrator.
Congress Heads to “Lame Duck” Session
Because the U.S. House and Senate were unable to complete action on several pieces of legislation, including the FY 07 NIH funding bill, the Congress will convene a “lame duck” session and return to Washington after the November elections. Visit the ASH Advocacy Center to take timely action on legislative issues affecting hematologists.
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