AMA seeks separate Medicare drug funding

Chicago -- Concerned that soaring prescription drug costs could lead to a Medicare physician pay cut, doctors want to see a new pool of money created to pay for medications that are now paid out of Medicare Part B funds.

Doctors gathered at the American Medical Association's Annual Meeting in June asked the AMA to urge Congress to develop this new funding stream, which also would include money for the Medicare outpatient prescription drug benefit set to begin in 2006. Currently, drugs administered in physicians' offices and those used with durable medical equipment are covered under Part B. The cost of these medications rose to $8.5 billion in 2002, up nearly 35% from 2001.

The Association also will study how physician reimbursement has been affected by a trend in which doctors are performing more procedures in their offices as outpatient services covered under Medicare Part B. That's a shift away from providing the same procedures in a hospital where they would be covered under Medicare Part A. Doctors believe the change has resulted in lower pay. If the study shows that physicians have seen a significant drop in reimbursement rates, the Association will pursue legislative or regulatory changes to correct the problems.

"This is a major issue for physicians," said Mississippi internist and AMA alternate delegate Daniel P. Edney, MD. "We are being forced to take a double discount."

These are just two of the government payment issues that physicians voiced concerns about at the meeting.

The Association also will ask the Centers for Medicare & Medicaid Services to change the way it decides which drugs are considered self-administered by patients and therefore not covered under Medicare Part B. Physicians said the current formula results in their not getting paid for drugs that are often administered in doctors' offices.

CMS doesn't cover a drug if it is self-administered more than 50% of the time. But the formula now looks at all uses of the drug to calculate that percentage and doesn't consider that there might be multiple uses for a drug. Specialists who commonly treat patients for a condition for which a drug must be administered in the office -- even though the majority of all patients use the medication to treat another disease and can self-administer the drug at home -- are left footing the bill, physicians said.

If CMS cannot change the rule, the AMA will ask Congress to change it.

Doctors want to see immediate improvements in the new Provider Enrollment Chain and Ownership System that has been a nightmare for physicians trying to get paid by insurers that process Medicare claims.

The AMA will ask CMS to find an immediate solution to ensure that physicians' Medicare enrollment applications will be processed quickly. Doctors also want the agency to give them a date for when the application backlog will be resolved and assure doctors who have been unable to bill for services for lengthy periods that they will receive interest payments. The AMA will ask CMS to determine how the PECOS delay could be impacting the submission of HIPAA-compliant electronic claims.

Concerns about Medicare skilled nursing facility rules also were discussed. An AMA study found that Medicare's consolidated billing policy for skilled nursing facilities, which was passed in 1997, creates more problems than it solves. The rules potentially contribute to delays in patient care, result in inequitable physician reimbursement, and cause excessive costs to patients and taxpayers.

The policy requires that skilled nursing facilities submit a consolidated bill for most of the services Medicare patients receive during their stays. One exception is professional physician services provided in doctors' offices. Physicians are allowed to bill Medicare separately for these services. But physicians cannot bill the program for diagnostic services they provide these patients in their offices.

Instead, they must make arrangements with skilled nursing facilities to be compensated for diagnostic services out of the facilities' consolidated Medicare payments. Many physicians are not aware of this rule.

As a result of the payment policy, many physicians are left with the choice of relying on the nursing facility to provide the diagnostic services, which are often inadequate, or conducting the diagnostic services themselves and swallowing the costs.

The AMA will ask Congress to change the rules so physicians can bill for those services directly, and it will urge CMS to require skilled nursing facilities to clearly identify which patients fall under the Medicare skilled nursing facility consolidated billing program instead of under the rules for patients in non-skilled extended care facilities.

More payment concerns

The AMA also will:

• Work with CMS to identify ways to make it easier and less costly for physicians to submit Medicare claims. A Board of Trustees report identifies ways to do that, including free software programs and toll-free lines for claims submissions.
• Seek adequate payment for Medicare screening and diagnostic mammography. Funding should come from federal general revenues, and payment for other services should not be reduced.
• Ask the CMS to create a DRG for severe sepsis. The AMA recognizes severe sepsis as a clinically coherent condition that deserves its own diagnosis-related group for Medicare billing purposes. Sepsis and septic shock affect one of every 50 people admitted to hospitals and kill 236,000 Americans annually, doctors said.
• Study and report back to the House of Delegates at the Interim Meeting in December the inadequacies and obstacles of getting paid to use implantable morphine pumps in Medicare patients.