Potentially good news on the Medicare horizon

I don't normally recommend reading the Federal Register unless you're a masochist or have trouble sleeping. However, last month, the Centers for Medicare and Medicaid Services (CMS) published its proposed rule on the 2010 Medicare physician fee schedule in the Federal Register, and there is actually some good news for family physicians in what CMS is proposing. 

Among the proposals that CMS estimates will have a positive impact on family physicians, two are most significant. One is that CMS proposes to use more current physician practice cost data in its calculation of practice expense relative value units. The other is that CMS proposes to increase the relative values of office visits and initial hospital visits in conjunction with a proposal to no longer recognize and pay consultation codes. CMS estimates that the impact of these changes would result in approximately an 8 percent increase in Medicare allowed charges for family physicians in 2010. Not surprisingly, the AAFP has commented in support of both proposals.

Of course, every silver lining is attached to a cloud. In this case, the cloud is a 21.5 percent decrease in the Medicare conversion factor for 2010 if Congress does not intervene between now and Jan. 1. Here's hoping the folks on Capitol Hill get around to that, whether or not they get around to health care reform in general. 

CMS is accepting comments on the proposed rule until Aug. 31. You can submit comments online or by other means specified in the proposed rule. 

Posted at 03:32PM Aug 12, 2009 by Kent Moore  |  Comments[0]

April fools

Effective April 1, 2009, UnitedHealthcare (UHC) is implementing a new fee schedule that will impact approximately 70,000 physicians nationwide.  The effective date of this new fee schedule is not the only thing funny about it.  You’ll laugh until you cry.

Recipients of the new fee schedule were previously on what UHC termed a “progressive” fee schedule.  (Admittedly, the idea of any health plan, let alone UHC, having a “progressive” fee schedule is funny in and of itself.  But, I digress.)  That fee schedule featured a fixed conversion factor and relative value units (RVUs) that changed annually based on changes in RVUs in the Medicare physician fee schedule.

The new fee schedule is what UHC calls a “stated year fee schedule.”  Under this fee schedule, the physicians’ fees will be based on their existing conversion factors and 2008 Medicare RVUs and non-RVU based fees, and these values will not change on an annual basis.

In essence, affected physicians will have their fees from UHC frozen at their current rates. (No, this is not an April Fools Day joke.)

When asked about this fact, UHC staff responded that network physicians always have the right to initiate negotiations with UHC regarding their fees.  So, in effect, the fees are only frozen until the physicians negotiate an increase with UHC or the Cubs win the World Series, whichever comes first.

UHC's rationale for the change is that “recent congressional activity affecting Medicare payment to physicians has introduced new complexity to some of our existing contractual arrangements.”  The activity in question is Congress’ mandate that Medicare quit implementing budget neutrality adjustments by simply adjusting work RVUs. UHC had heretofore taken advantage of the adjusted Medicare RVUs, which were lower than the unadjusted RVUs mandated by Congress for 2009. Because of the congressional mandate, continuing to use Medicare RVUs and a fixed conversion factor as the basis for its “progressive” fee schedule would have meant a significant increase in expenditures for UHC.  Unable to handle this “new complexity” (“What?  We have to pay more?!?”) and in an effort to “stabilize” the methodology for its physicians, UHC decided to change its fee schedules.

“Stability through change.”   It’s the new oxymoron of our times.

In any case, UHC has assured affected physicians that they will “see no difference with this new fee schedule and your current reimbursement.”  Of course they won’t, because UHC is freezing their reimbursements at the 2008 level.  Now, if only they could freeze physicians’ cost of practice at the same time.

Of course, one thing more foolish than UHC’s new fee schedule and its rationale would be actually accepting it.

Posted at 11:51AM Mar 27, 2009 by Kent Moore  |  Comments[0]

The future of physician payment?

The start of a new year is often a time to look ahead and try to foresee the future. As I do that this January with respect to physician payment, I see “value-based purchasing” on the horizon.

What is “value-based purchasing?” Good question. I do not have a definitive answer, but I can tell you that the folks in the Centers for Medicare & Medicaid Services (CMS) view it as something that “aligns payment more directly to the quality and efficiency of care provided by rewarding providers for their measured performance across the dimensions of quality.”

And this is not just idle musing, either. By law, the Secretary of Health and Human Services is to develop a plan to transition to a value-based purchasing program for Medicare payment for covered professional services (including physician services) and submit a report to the Congress no later than May 1, 2010. To that end, CMS held a public listening session on this topic on Dec. 9, 2008, and has released an issues paper for review and comment.

What this all means for physician payment is not yet clear. However, I can imagine a day in the not-too-distant future when Medicare and other payers rely less on “fee-for-service” and more on what we have heretofore called “pay-for-performance.” In the meantime, it may be wise to keep an eye on CMS’s plans for transitioning to “value-based purchasing” as an indicator of things to come.

Posted at 04:57PM Jan 05, 2009 by Kent Moore  |  Comments[0]