Legislative and Regulatory Updates

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."

Health Care Reform Legislation Scheduled For House Floor Vote at Week's End
Last Thursday House Speaker Pelosi released the Affordable Health Care for America Act, H.R. 3962, health care reform legislation that is expected to be brought to the floor of the House for a vote by the end of this week. This legislation is the product of merging the separate versions of H.R. 3200 that were approved by three committees in the House of Representatives. H.R. 3962 does not address Medicare physician payment reform and the 21.2% pay cut that will take effect on January 1st. The House leadership has introduced separate legislation to address the Medicare physician payment issue, H.R. 3961 (see story below). H.R. 3962 contains a public insurance option under which the Secretary of HHS would negotiate payment rates with providers that participate in the public plan and contains an opt-out policy for providers who decide not to participate in the plan. H.R. 3962 also increases Medicare payment rates by 5% for primary care physicians specializing in primary care, defined both by specialty and by share of practice in primary care, but does not cut other physician services to pay for it as does the Senate reform bill; expands testing of the medical home and accountable care organization delivery models as well as establishing an Innovation Center at CMS to test and evaluate different care delivery models that encourage higher quality and lower costs; requires reporting on financial relationships between manufacturers and physicians and other health care entities; establishes an approval pathway for biosimilar drugs; establishes a voluntary state grant program designed to encourage states to implement alternatives (early offers or certificate of merit approaches) to traditional medical malpractice litigation, among many other things. The text of H.R. 3962 — some 1900 pages — and a section by section analysis of the bill are available on the House Energy & Commerce Committee website...click here.

Medicare Physician Payment Reform Act Introduced in House (HR 3961)
The House leadership has removed the Medicare physician payment reform provisions from health care reform legislation and introduced the provisions as a separate bill (HR 3961). The legislation would repeal the current Medicare Sustainable Growth Rate (SGR) update payment formula and replace it with a policy that would provide reimbursements equal to the Gross Domestic Product (GDP) plus 2% for physicians whose E/M and preventive services make up 50% or more of their Medicare allowable charges. The update for all other services would be set at GDP plus 1%. The new payment policy would take effect in 2011. The bill provides an update for all physician services in 2010 equal to the Medicare Economic Index (MEI), currently estimated at approximately 1.2%. Like S. 1776 that was considered in the Senate earlier this month, H.R. 3961 does not provide funding offsets for the cost to repeal the current SGR formula, estimated at $240 billion.

AACE Urges Congress Replace the Flawed SGR Formula in Health Care Reform Legislation
AACE, along with the AMA and several medical organizations, urges the Senate Finance Committee that health care reform legislation include provisions to replace the flawed sustainable growth rate (SGR) formula with a new Medicare physician payment system. Click here to read the letter and for more information, click here.

Some of the provisions of particular interest to AACE members are the following: 1) Repeal of the current Medicare Sustainable Growth Rate (SGR) physician payment formula. The current formula is replaced with a positive update based on the Medicare Economic Index in 2010, and then beginning in 2011, separate volume targets will be created for two categories of services (1. primary care, E&M, preventive care, and 2. all other services); 2) Incentives to form accountable care organizations, medical homes, and reduce hospital readmissions; 3) An increase the utilization rate - or assumption about the time in use - for all imaging services from 50% to 75%. This last proposal will affect the calculation of the practice expense for imaging services and result in a reduction in reimbursement; 4) An emphasis on prevention and wellness including a prohibition of cost-sharing for preventive services in benefit packages; 5) "Physician Payment Sunshine" provisions that require manufacturers and distributors to report payments to all types of healthcare providers. The language in the House bill is considered much more onerous than the Senate version of these provisions championed by Senator Grassley.

The legislation does not specify how the reforms will be paid for but lists several potential options including additional payroll taxes, tax exclusion caps on health benefits and new taxes on sweetened beverages and alcohol. The House Committees plan to hold hearings on the bill and begin marking-up the legislation following the July 4th congressional district work period. To read the draft legislation or summary papers on specific issues, please click here.

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