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Video: Tim Walz (Medicare Payments)
CBO Sets Price Tag For Delaying Scheduled Medicare Physician Payment Cuts: $271 Billion
Medpage Today: CBO: Delays In SGR Cuts To Cost $271 Billion The Congressional Budget Office (CBO) has released updated figures on the cost of repealing — or continuing to override — the cuts doctors are scheduled to receive under Medicare’s Sustainable Growth Rate (SGR) reimbursement formula. The fresh numbers give Washington lawmakers a better idea of the effect of changes they could make later this year to the SGR cuts. Physician reimbursements are scheduled to drop by 27% next year unless Congress acts, the CBO noted in the report. Every year since 2003, Congress has acted to override the SGR cuts by either maintaining or increasing payments when they were scheduled to drop. The CBO estimates that if cuts are blocked and payments sustained at current rates from now through 2022, it would cost an additional $271 billion from 2013 to 2022. Resetting payments to 2011 levels, only to increase them annually at 2% plus however much the gross domestic product (GDP) grows, would cost an additional $376.6 billion (Pittman, 8/1).
Imaging Cuts in Proposed 2013 Medicare Fee Schedule Rule Potentially Dangerous, Unfounded and Unnecessary
Further cuts to imaging do little, if anything to safely bend the Medicare cost curve. Imaging use in Medicare is down since 2008. Medicare spending on scans is at the same level it was in 2003. Imaging is also the slowest growing of all physician services among privately insured Americans according to the Health Care Cost Institute. A multitude of studies show that medical imaging exams are directly linked to greater life expectancy, declines in mortality rates, and are generally safer and less expensive than the invasive procedures that they replace. Scans also reduce the number of invasive surgeries, unnecessary hospital admissions and length of hospital stays.
Demand and compensation for primary care physicians is on the rise
Steve Messinger, partner at the healthcare consulting firm ECG, says primary care physicians’ two top priorities are fair compensation and flexibility of their schedule. A locum tenens career through Barton Associates meets both of those criteria, offering competitive rates, flexibility, and freedom from bureaucracy that comes with a permanent position. Now is a great time for primary care providers who have been considering a locums career to give it a shot. With primary care providers in such demand, we have a wide array of high-paying assignments available. In short, it’s a great time to be in family practice!
Medicare and The President’s Plan to Reduce the Deficit
Teaching Hospitals: Here again, MedPAC’s analysis suggests that Medicare is overpaying. Medicare is the single largest funder of graduate medical education (GME), laying out $9.5 billion in 2009. The goal is to compensate teaching hospitals for the indirect costs stemming from inefficiencies created from residents “learning by doing.” But MedPAC reports that these Indirect Medical Education (IME) add-on payments are significantly greater than the additional patient care costs that teaching hospitals experience. For example, MedPAC’s June 2010 report reveals that in 2009, Medicare paid $3.5 billion more than the empirically calculated indirect clinical costs associated with teaching. The Fiscal Commission also recommended reducing the IME adjustment. The President’s proposal would trim the IME adjustment by 10 percent beginning in 2013, and save approximately $9 billion over 10 years. If one assumes that the $3.5 billion overpayment in 2009 was typical, Medicare would need to cut IME adjustments by $35 billion over 10 years in order recoup lost tax dollars. Using that benchmark, a $9 billion cut does not seem Draconian.
CMS Proposed Changes to 2013 Physician Fee Schedule
The Center for Medicare and Medicaid Services (CMS) released its’ proposed rule (Rule) for changes related to payment policies under the physician fee schedule and other areas on July 6, 2012. According to a copy of the Rule on the Office of Federal Register website, the Rule “…addresses changes to the physician fee schedule, payments for Part B drugs, and other Medicare Part B payment policies to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services.” As is its’ custom, comments on the Rule may be submitted for a 60 day period after the initial date of filing for public inspection. Likely considered the most significant change is the projected 27 percent cut in Medicare payment rates as suggested by the sustainable growth rate (SGR) formula. However, there are indications that Congress may be acting to delay this projected cut. Representative Michael Burgess (R – TX) has said he will submit legislation that would delay the SGR cuts for one year. If historical precedent is any indication, some sort of delay related to the SGR cuts is highly likely. There is an emphasis on primary care in the Rule; likely a result of healthcare reform and the focus on patient care coordination. For family physicians, the Rule proposes a 7 percent increase in payments while other primary care practitioners would receive a 3 – 5 percent increase. While primary care providers will see increases, the Rule includes payment cuts to several specialty groups. The specialties or areas with the largest proposed cuts – on top of the proposed SGR reduction – are summarized in the chart below: Much of the proposed decline in imaging services is related to a reduction in payment when more than one imaging service is provided by the same physician(s) to the same patient, during the same session (visit), on the same day. This is simply an expansion of the multiple procedure payment reduction (MPPR) often utilized by Medicare. In such cases, the lower priced procedure would receive a 25 percent reduction in payment. Specifically for radiation oncology, payment cuts surround two services: intensity modulated radiation therapy (IMRT) and stereotactic body radiation therapy (SBRT). In both cases, CMS has reviewed the clinical times that were initially utilized to determine reimbursement for these services and has concluded that the times are too high based on current information. Also driving this reduction is a change in the interest rate assumption used to determine the payment component for practice expenses. The interest rate change would decline from 11 percent to a range of 5.5 – 8 percent which would impact services that require significant capital. The final rule is expected to be released on or around November 1.
Rule Would Increase Payment to Family Physicians
The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule on July 6, 2012, which would result in an increase of payment for family physicians by approximately 7% and between 3% to 5% for other practitioners. The potential increase would result from updated payment policies and rates under the Medicare Physician Fee Schedule (MPFS) for calendar year (CY) 2013. Under the MPFS, Medicare pays more than one million physicians and non-physician practitioners providing vital services to Medicare beneficiaries.
Affordable Health Care Act may impact Medicaid and Medicare patients
Author Sandra Decker, PhD, an economist at the National Center for Health Statistics of the US Centers for Disease Control and Prevention (CDC) noted that the findings serve as a useful baseline from which to measure the anticipated impact of Affordable Care Act provisions that could increase Medicaid payment rates to primary care physicians in some states while boosting up the number of individuals with healthcare coverage. She reported a low acceptance rate of new Medicaid patients of 40.4% in New Jersey and a high of 99.3% in Wyoming. In general, acceptance rates generally were higher in states with higher Medicaid fee-for-services rates, expressed as a percentage of Medicare’s rates in 2008. For example, Medicaid rates in Wyoming in 2008 were close to 150% of the reimbursement for a Medicare patient; this marked the nation’s highest rate. In contrast, New Jersey’s Medicaid rates were the nation’s lowest: 37% of Medicare. Nationwide, the average Medicaid-to-Medicare fee ratio is 74.2.
Medicare Physician Fee Schedule
Improving Payment for Primary Care. The proposed rule includes a number of initiatives designed to increase payments for primary care. Payments for primary care would increase for a variety of reasons, including a proposed new payment for managing a beneficiary’s care when the beneficiary is discharged from certain health care facilities, such as a hospital, skilled nursing facility, inpatient rehabilitation facility, and other similar types of facilities. This would be achieved by creating a new procedure code for providing “post-discharge transitional care management services”, which would apply to all services related to transitional care management within 30 days following the date of discharge from an eligible facility.
Congress Holds Hearings Fixing Flawed Medicare Physician Payment Formula
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