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American Academy of Family Physicians
Monday Dec 23, 2013

A short reprieve from Medicare cuts and a little something extra, too

President Obama is expected to sign into law legislation that would grant physicians a reprieve from drastic cuts in their Medicare payments beginning on Jan. 1. The new law, adopted by the Congress last week, provides a 0.5 percent update to Medicare payments for the first three months of 2014 and avoids a 24 percent cut otherwise required under current law.

That action gives Congress three more months to complete its work on legislation that would repeal the Sustainable Growth Rate (SGR) without further disruption to the Medicare program. Both the Senate Finance Committee and the House Ways and Means Committee (amending a bill produced by the House Energy and Commerce Committee) have overwhelmingly approved similar but not identical bills – the SGR Repeal and Medicare Beneficiary Access Act (S 1871) and the Medicare Patient Access and Quality Improvement Act (HR 2810). The three-month extension of the Medicare physician fee schedule (with a 0.5-percent increase) means that the two committees have until March 31 to work out the differences in the bills.

In the meantime, physicians must make decisions about their Medicare participation status for 2014. Physicians wishing to change their Medicare participation or non-participation status for 2014 are required to do so by Jan. 31, 2014. Participation decisions are effective Jan. 1, 2014, even if made between then and Jan. 31, 2014, and are binding for the entire year. More information on physicians’ Medicare participation options is available on the AAFP web site.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Thursday Feb 23, 2012

Another patch and another cliff

Last week, a U.S. House-Senate Conference Committee reached a 10-month deal that would maintain current physician payment rates through the end of the year. The measure, H.R. 3630 (at the THOMAS website, type "H.R. 3630" into the search field after selecting "Bill Number"), was subsequently approved by both the House and Senate. Yesterday, the President signed the bill into law.

This latest patch to the Medicare physician fee schedule avoids the 27.4 percent Medicare physician payment cut that was otherwise scheduled to occur on March 1 as a result of the sustainable growth rate (SGR) formula. Because H.R. 3630 postpones but does not eliminate the threat posed by the SGR, physicians will face a 32 percent Medicare payment reduction when the payment patch expires at the end of this year, which makes Jan. 1, 2013, the next "cliff" that physicians will face in terms of Medicare payments.

As noted, the law does not solve the underlying problem. It only postpones its resolution and adds to the cost of a permanent solution. The cost of repealing the SGR will climb from $316 billion today to $335 billion in 2013. In the meantime, physicians are left to cope with the ongoing uncertainty and hope that Congress will find the fortitude and funds for a permanent solution before 2013 rolls around.

Thursday Dec 02, 2010

Good news from Medicare, over time

In my last post ("SGR relief:  Let us give thanks, for now," Nov. 19, 2010), I referenced that the U.S. Senate had approved a one-month extension of the current Medicare physician fee schedule conversion factor and that the U.S. House of Representatives was expected to do the same when they returned from their Thanksgiving recess. I am happy to report, as Bob Edsall observed in the "Noteworthy" blog earlier this week, that the U.S. House acted as expected, and the conversion factor will remain at its current level through the end of the year. 

Assuming Congress intervenes again by the end of the year (a big assumption, I grant you) and the conversion factor for 2011 is no less than it is now, there is even more good news for family physicians in the 2011 Medicare physician fee schedule. At the current conversion factor and using the relative value units (RVUs) published in the final rule on the 2011 fee schedule, codes 99213 and 99214 (two of the CPT codes most commonly used by family physicians) will have Medicare allowances in 2011 that are 42 and 35 percent higher, respectively, than they were in 2006. The increase will be even larger for those family physicians that qualify for the Medicare primary care bonus that goes into effect next year. 

How is that possible, especially when the current conversion factor is less than it was in 2006? As you can see in this chart, which details the changes over time, the answer lies in the relative value units (RVUs) that are assigned to these codes. Physician work RVUs for these codes got a significant boost in 2007, as a result of the five-year review of the Medicare physician fee schedule, and they got another boost in 2010, when the Centers for Medicare & Medicaid Services (CMS) decided to quit paying for consultation codes and redistributed the RVUs to other evaluation and management (E/M) codes, like 99213 and 99214. The practice expense RVUs and professional liability insurance RVUs have also gone up, thanks to methodology changes at CMS and the use of more current data.  

Given the trials and tribulations to which the conversion factor has been subjected, it is easy to get discouraged about the state of Medicare payments, but it turns out that the reality is a little better than the perception for some of the codes family physicians use most often.  Admittedly, the gains did not occur overnight, which is why it's easy to overlook them, but they are there.  Or at least they will be, if Congress can continue to spare the conversion factor, like it did this week.   

Friday Nov 19, 2010

SGR relief: Let us give thanks, for now

In my last post ("The 2011 Medicare physician fee schedule is here," Nov. 5, 2010), I noted that the fee schedule conversion factor would drop from its current $36.8729 to $25.5217 in January, unless Congress and the President intervened. Thankfully, the U.S. Senate began the intervention process yesterday.

Specifically, yesterday evening, the Senate approved a one-month extension of the current conversion factor. Unfortunately, they did so after the House had recessed for the Thanksgiving holidays, so the House cannot act on the measure until legislators return. However, the House Majority Leader's Office issued this statement:  "Tonight, the Senate passed a one month extension of the current Medicare physician payment rates. It is my intention to schedule this bill for consideration when the House reconvenes on Nov. 29, so we can send it to the President's desk prior to the Nov. 30 expiration date of current SGR relief."

Thus, it appears the fee schedule conversion factor will not drop before the end of the year. Beyond that, who knows? The cost of a 12-month extension that will include some other Medicare provisions is roughly $19 billion. Where that money might be found in the federal budget is unknown, and Senate Democratic leaders have indicated that none of it should come from repealing portions of the health reform legislation. Even if (and this is a big IF) there are sufficient funds for a 12-month extension, the next issue is the legislative vehicle to make that happen. Should Congress use the Continuing Resolution (which is likely to be only two to three months, but will certainly pass to keep the government operating) or the tax bill (which is likely to be an extension for a year or two of the current tax structure, but which will be the most politically volatile bill)? Absent sufficient funds for a 12-month extension, the question will be how long should the extension be (i.e., how long an extension can be funded)? Ultimately, this may be mostly a political question about whether it is better to force a showdown on health reform sooner or later. 

In the meantime, as you prepare to enjoy your turkey (or other holiday meal of choice) next week, say a little word of thanks for the folks in Washington who have spared the Medicare physician fee schedule for another month. And if you're so inclined, say a little prayer that they will find the money (and the fortitude) to implement a longer-term fix before the end of the year. 

Thursday Jun 03, 2010

2010 Medicare physician fee schedule: Here we go again!

I feel like a broken record. 

On April 1 (see "2010 Medicare physician fee schedule:  Stop me if you've heard this one before"), I shared with you how the Senate had again failed to pass legislation avoiding a 21 percent cut in the Medicare payment rate to physicians. As a result, the cut was technically effective with dates of service on or after April 1, 2010, but the Centers for Medicare & Medicaid Services (CMS) again instructed its contractors to hold claims for services paid under the fee schedule for the first 10 business days of April to give Congress time to rescind the cut. 

It actually took 15 days. On April 15, Congress passed and the President signed legislation that extended the 2009 Medicare physicians payment rate until May 31, 2010. 

Now May 31 has come and gone, and I know that you will be shocked to learn that Congress again failed to act. Actually, to be fair to the House of Representatives, it was the Senate that again failed to act. The House passed a bill on May 28 that would have increased the payment rate by 2.2 percent for the rest of 2010 plus an additional 1 percent in 2011. The Senate, however, determined that there was insufficient time to consider the bill before their Memorial Day recess and left Washington without action on the bill.

Consequently, the 21 percent cut is technically in effect again for dates of service on or after June 1. And once again, CMS has instructed its Medicare contractors to hold claims for services paid under the fee schedule for the first 10 business days of the month to give Congress time to rescind the cut. 

Congress returns from its recess on June 7. What will happen then is anyone's guess. In the meantime, it's the same tune and a different verse, and it's beginning to sound like the blues to most physicians. 

Thursday Apr 01, 2010

2010 Medicare physician fee schedule: Stop me if you've heard this one before

I know that it's April 1, but this is not a joke.  The U.S. Senate dropped the ball again, and Medicare payment allowances for physicians dropped 21 percent today. 

As you will recall from my last post (see "2010 Medicare physician fee schedule: What next?"), on March 2, Congress and the President enacted legislation that extended the 2009 Medicare payment rate through the end of March. This reversed a one-day drop in the fee schedule which occurred after the U.S. Senate failed to pass an extension by the previous deadline of Feb. 28, 2010. 

Like deja vu all over again (to quote Yogi Berra), the Senate again failed to pass a bill that would have extended the 2009 payment rate for physicians until April 30. The bill was ready for passage under standard unanimous consent procedures, but Sen. Tom Coburn (R-OK), playing the role previously played by Sen. Jim Bunning (R-KY), objected because the bill was not completely paid for. Then the Senate left for a two-week recess. As a result, the 21-percent reduction in physician payments took effect today.

Once again, the Centers for Medicare and Medicaid Services (CMS) is trying to play the good guy in this farce. CMS has instructed its contractors to hold claims containing services paid under the fee schedule for the first 10 business days of April, which, according to my calendar, would be through April 14. This hold will only affect claims with dates of service April 1, 2010, and forward. CMS expects the hold will have minimal impact on cash flow because, under the current law, clean electronic claims are not paid any sooner than 14 calendar days (29 days for paper claims) after the date of receipt anyway. 

The Senate will return on April 12. Senate Majority Leader Harry Reid (D-NV) has filed a motion to close debate and proceed to consideration of the temporary extenders legislation if there is no unanimous consent at that time. Expectations inside the Beltway are that negotiations between both sides will continue during the recess, and it is likely that the bill will proceed quickly through the Senate when they return. 

In the meantime, physicians are left to play the waiting game again and ponder what the punchline is. The situation might actually be funny if it weren't so sad and pathetic at the same time.

Wednesday Mar 03, 2010

2010 Medicare physician fee schedule: What next?

When we last left the 2010 Medicare physician fee schedule (see "2010 Medicare physician fee schedule: the saga continues," Jan. 27, 2010), it was headed down the tracks towards a "Bridge Out!!" sign after Feb. 28. For those of you who don't follow this story on a day-to-day basis, here is what's happened in the interim. 

As typically happens in this story, Congress tried to avert calamity by passing a stop-gap bill just before Feb. 28, 2010. Unfortunately, Sen. Jim Bunning (R-KY) decided to play Snidely Whiplash in this particular installment and used Senate procedures to prevent Congressional action in advance of the deadline. Consequently, Feb. 28 came and went without Congressional intervention, and the fee schedule dropped on March 1. 

Seeking to play Dudley Do-Right in our story, the Centers for Medicare and Medicaid Services (CMS) bravely threw the fee schedule a lifeline and instructed its contractors to hold all Medicare claims with dates of services on or after March 1 for 10 business days to give Congress one more chance. On March 2, Congress and the President took advantage of that lifeline and enacted legislation (H.R. 4691) that extends the 2009 Medicare payment rate through the end of March. This effectively postpones any cut in the 2010 Medicare physician fee schedule until Apr. 1, 2010 – April Fools' Day.  (Coincidence or cruel irony? You decide.)

So now, the 2010 Medicare physician fee schedule will float along at the 2009 rate through at least the end of March, at which point it is scheduled to plunge over the falls to a precipitous 21 percent decline. Will CMS once again be called upon to throw the fee schedule a lifeline? Will Congress be able once again to rescue the fee schedule before total disaster strikes? And how many physicians will stick it out (instead of opting out) to see what happens? Stay tuned! 

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