Legislative and Regulatory Updates

Six Month SGR Physician Payment Fix Signed Into Law
On Friday, June 25th, President Obama signed into law H.R. 3962, “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010.”  This law establishes a 2.2% update to the Medicare Physician Fee Schedule (MPFS) payment rates retroactive from June 1 through November 30, 2010.  The House approved H.R. 3962 the previous evening by a vote of 417 yeas and 1 nay, with 14 members of the House not voting.  The Senate cleared the legislation Friday, June 18th.

The $6.4 billion cost of the short-term Medicare physician fix in H.R. 3962 is paid for in full.  One of the funding offsets is related to pension plan contributions.  The second offset pertains to payment for hospital inpatient services for diagnostic and non-diagnostic services related to a patient’s admission furnished by the hospital, or by an entity wholly owned by or operated by the hospital, that are provided within the 3 day period prior to admission.  Our understanding is that the intent of these provisions is to prevent double payment to hospitals for services and that they do not impact payments to physicians; however, AACE is seeking clarification from CMS to determine what exactly these provisions mean and what, if any, potential impact they will have on endocrinologists.  We will provide additional information on this specific issue as it is received. 

Information On Claims Processing Distributed by CMS:

The Centers for Medicare & Medicaid Services (CMS) has directed Medicare claims administration contractors to discontinue processing claims at the negative update rates and to temporarily hold all claims for services rendered June 1, 2010, and later, until the new 2.2% update rates are tested and loaded into the Medicare contractors’ claims processing systems.  Effective testing of the new 2.2% update will ensure that claims are correctly paid at the new rates.  CMS expects to begin processing claims at the new rates no later than July 1, 2010.  Claims for services rendered prior to June 1, 2010, will continue to be processed and paid as usual.

Claims containing June 2010 dates of service which have been paid at the negative update rates will be reprocessed as soon as possible.  Under current law, Medicare payments to physicians and other providers paid under the Medicare Physician Fee Schedule (MPFS) are based upon the lesser of the submitted charge on the claim or the MPFS amount.  Claims containing June dates of service that were submitted with charges greater than or equal to the new 2.2 % update rates will be automatically reprocessed.  Affected physicians who submitted claims containing June dates of service with charges less than the 2.2 % update amount will need to contact their local Medicare contractor to request an adjustment.  Submitted charges on claims cannot be altered without a request from the physician/provider.  Physicians should not resubmit claims already submitted to their Medicare contractor.

STOP THE MEDICARE MELTDOWN!
AACE is partnering with the Texas Medical Association (TMA) and several other state and specialty societies on a petition drive to permanently repeal the flawed Medicare Sustainable Growth Rate (SGR) physician payment formula. The petition calls on Congress to fix Medicare by developing a rational Medicare physician payment system that automatically keeps up with the cost of running a practice and is backed by a fair, stable funding formula. The goal of the petition drive is to gather 1 million signatures from physicians, other health care providers and patients and share them with Congress and the President.

Sign the Online Petition to Repeal the SGR Formula
Print Out a Poster for Your Office
Print Out a Hard Copy of the Petition to Collect Signatures

National Health System Reform Legislation Signed Into Law – On March 23rd the Patient Protection and Affordable Care Act (HR 3590), legislation previously approved by the Senate late in 2009, was signed into law. One week later, the President signed into law the Health Care & Education Affordability Reconciliation Act of 2010, reconciliation legislation that contained modifications to H.R. 3590 requested by the majority party in the House of Representatives and new reforms to federal student loan programs. Together these bills will bring significant change to the country's health care system and will have a considerable impact on the practice of medicine. Among many things, the new law provides access to affordable health insurance coverage for the uninsured, much-needed insurance market reforms, relief from prescription drug prices for American seniors by closing the Medicare Prescription Drug Program "Donut Hole," and new bonuses and increased Medicaid rates for primary care physicians.

A significant legislative priority for AACE is a provision of the new law that provides a two-year partial payment restoration for dual energy x-ray absorptiometry (DXA) bone density scans. Retroactive to January 1, 2010, payments for DXA will be 70% of the 2006 payment level, or approximately $98, for calendar year 2010 and 2011.  Payments for Vertebral Fracture Assessment (VFA) will also be restored to 70% of the 2006 level, or approximately $27, for the same two year period.  The new law calls on the Secretary of Health and Human Services to enter into an agreement with the Institute of Medicine to conduct a study, which will be submitted to Congress, on the impact that payment reductions between  2007 and 2009 had on Medicare beneficiary access to bone mass density tests.

While the new law contains many positive aspects, there are several provisions of concern that AACE will continue to work on with Congress in the future to correct. These provisions include:

• Establishment of a new Independent Payment Advisory Board (IPAB) that will be appointed by the President and given broad authority to recommend changes in Medicare payment policies.
• Penalizing physicians for non-participation in the Physician Quality Reporting Initiative (PQRI) beginning in 2015 and subsequent years
• Implementing a new “Value Index Adjuster” to the Physician Fee Schedule utilizing untested quality and cost of care profiles.

AACE will also work with Congress on the following issues that were unfortunately not included in health system reform:

• Meaningful medical liability reform
• Right of patients to private contract
• Permanent repeal of the current flawed Medicare Sustainable Growth Rate (SGR) physician payment formula.

Links to Additional Information:
Health Care Reform Timeline of Major Initiatives
AACE Letter to Congress on the Health Care & Education Affordability Reconciliation Act of 2010 (HR 4872)
AACE Letter to House on the Patient Protection and Affordable Care Act (HR 3590)

AACE Calls on Congress to Repeal the SGR Formula and Enact Permanent Physician Payment Reform
The Medicare physician payment system based on the flawed Sustainable Growth Rate (SGR) formula must be replaced once and for all. Congress continues to approve short-term temporary fixes to block the 21% SGR physician payment cut that was scheduled to take effect on January 1, 2010. The cost to repeal the current SGR formula increases every year that Congress does not act and has become prohibitive. The Congressional Budget Office (CBO) estimated the cost of repealing the SGR formula to be $49 billion when physicians faced a 3.3% cut in 2005; today when physicians face a 21% cut the cost of repeal is estimated to be in excess of $210 billion. The current unpredictable payment system creates instability for physician offices and for patients. It is not a good foundation on which to build a reformed health system promising older Americans continued access to high quality care and health insurance coverage to the uninsured. AACE urges Congress to repeal the SGR formula in 2010 and replace it with a payment system that reflects increases in physician practice costs. AACE members are urged to keep the pressure on their own elected Members of Congress to permanently reform the payment system this year. Let your elected officials know how the unstable payment system is impacting your practice and your patients.

Additional Information:
2010 AACE Legislative Fact Sheet on the SGR Formula

CMS Issues Final Physician Fee Schedule Rule Eliminating Payments For Consultation Codes
On Friday, October 30th, CMS issued the final rule for the 2010 Medicare Physician Fee Schedule, announcing the agency is eliminating payments for consultations provided in office and hospital settings. As proposed earlier this summer, CMS will implement this policy change in a budget neutral manner by redistributing the relative value units (RVUs) for the consultation codes to new and established office visits, resulting in approximately a 6% pay increase for these services. (The rule states that initial hospital and facility code visits will increase by 0.3%.) The final rule continues to list consultation codes with RVUs assigned for private insurance use. AACE strongly opposed this policy change in comments submitted to CMS this summer and, working with other specialty societies, will continue to explore avenues to change this new policy. The fee schedule final rule also includes a 21.2% across-the-board payment cut due to the current flawed SGR physician payment formula. Congress is expected to address the SGR pay cut either through permanent reform or a temporary fix before the end of the year, however the current pace of congressional activity could result in this issue spilling over into the new year. We will keep AACE members updated on congressional activity and whether future resolution of the 21.2% pay cut and other issues, such as the payment relief for DXA currently pending in the Senate health care reform bill, may necessitate retroactive claims adjustments and what members will need to do. For more information on the final rule for the 2010 Medicare Physician Fee Schedule, please click here and select "CMS ANNOUNCES PAYMENT, POLICY CHANGES FOR PHYSICIANS SERVICES TO MEDICARE BENEFICIARIES IN 2010."

Protect Patient Access to Osteoporosis Diagnosis, Prevention and Treatment Services
The Medicare Fracture Prevention and Osteoporosis Testing Act of 2009 (H.R. 1894/S. 769) has been introduced in Congress. H.R. 1894 was introduced by Representative Shelley Berkley (D-1st-NV) and Representative Michael Burgess (R-26th-TX) with 64 members of the House of Representatives joining them as original co-sponsors. Senator Blanche Lincoln (D-AR) and Senator Olympia Snowe (R-ME) were joined by Senator Dianne Feinstein (D-CA), Senator Debbie Stabenow (D-MI) and Senator Sheldon Whitehouse (D-RI) in introducing S.769 in the U.S. Senate. The legislation protects access to osteoporosis prevention, diagnosis and treatment services conducted with a dual energy x-ray absorptiometry (DXA) machine...more

DXA Study Findings
AACE, along with our sister societies, recently commissioned a study by The Lewin Group to determine the cost of performing a DXA and VFA procedure in the physician office setting. The study also looked at program costs associated with reversing Medicare payment cuts for these procedures. The Lewin Group study concluded that restoring DXA payment rates to the 2006 level will save the Medicare program $1.14 billion over five years due to early diagnosis and the prevention of fractures. Click here to read the executive summary or the complete report.

Where We Stand

• Legislative and Regulatory Committee Charge
• 2009 Legislative Fact Sheets
• Legislative and Regulatory Issues of Interest

Other Government Resources