Cardiologists' suit against Medicare pay cuts dismissed

Despite a legal setback, specialty physicians will continue to push for a reversal of what they say are drastic pay cuts in the 2010 Medicare physician fee schedule that threaten to harm access to care.

The American College of Cardiology in December 2009 had sued the Dept. of Health and Human Services, alleging that the government violated federal Medicare laws when it based payment reductions for certain cardiology services -- with some cuts ranging up to 40% -- on flawed data used to calculate practice costs for the specialty. An across-the-board cut of 21.2%, set to take effect March 1, would be on top of those reductions.

In the final 2010 fee schedule, the Centers for Medicare & Medicaid Services revised the practice expense portion of the relative value unit system for a number of specialty services to boost Medicare pay for primary care services. The reductions, which especially hit cardiology and other specialties that provide significant amounts of imaging services, took effect Jan. 1.

The ACC had asked the U.S. District Court for the Southern District of Florida to block the cardiology cuts and prevent CMS from using the allegedly flawed data. But the court, in a Jan. 12 ruling, said it did not have authority to review Medicare payment decisions.

While disappointed, the cardiologists are standing by their position and plan to pursue legislative and administrative remedies.

The ruling "sets the precedent that CMS has complete and unchecked control over physician reimbursement for patient care even where its determinations are based on faulty data," said Jack Lewin, MD, the ACC's CEO. The organization was joined in the lawsuit by several individual cardiologists, the Florida ACC chapter, the American Society of Nuclear Cardiology, the Assn. of Black Cardiologists and the Cardiology Advocacy Alliance.

The cuts are going to reduce patient access and increase Medicare costs, and the situation would become even worse if the across-the-board cut to the Medicare conversion factor takes effect in March, Dr. Lewin said. If not reversed, the cuts would force many private practice cardiologists to close or turn to hospital employment, where costs are higher, he said. Others would have to cut back on services or lay off staff to survive steep reductions in pay for routine procedures, including an estimated 27% to 40% fee cut for echocardiograms, stress tests and nuclear tests.

Radiologists -- who will see a 45% payment reduction in imaging services this year -- shared cardiologists' concerns, though they were not a party to the lawsuit.

"When the government promulgates a rule that has such a devastating effect on reimbursement for a significant number of physicians, the onus is on the government to make sure the policies are as representative and as accurate as possible," said Cynthia Moran, assistant executive director of government relations at the American College of Radiology. "Here, there was no give-and-take as far as sharing data and in transparency of the information from the proposed rule to the final rule."

The Medicare rate revisions were derived, in part, from new information in the Physician Practice Information Survey. The survey was spearheaded by the American Medical Association at the behest of CMS, with participation from 72 other medical organizations, including specialty societies such as the ACC and ACR.

But specialists said the survey contained only a limited data set that does not accurately reflect their practice costs. They had alleged that CMS' failure to validate the results violated federal Medicare laws.

For example, cardiology relative value unit revisions were based on responses from only 55 cardiologists who did not have the same overhead costs as a typical private practice, according to the lawsuit. From the PPIS data, CMS calculated a 40% decline in the cost of providing cardiology care over the past five years, compared with what Dr. Lewin said were increases for most cardiologists in recent years -- at least 2% in 2009 alone.

Most of the radiology surveys came from hospital-based specialists, the ACR's Moran said, and did not account for those who maintain office-based practices and pay for their own equipment. Combined with other recent cuts in diagnostic imaging, "what we're hearing is [radiologists] are not upgrading their equipment. So what you're going to see is a degradation of quality imaging and a duplication of tests, and that's not going to benefit anybody," Moran said.

CMS also refused to consider supplemental surveys the two specialties conducted, the ACC and ACR said.

HHS officials declined to comment on the lawsuit but defended the cuts as reasonable, reliable and necessary to preserving overall access to care.

The 2010 physician payment rule "was only adopted after there was ample opportunity for comment by the public and the affected medical specialties," CMS spokeswoman Ellen B. Griffith said in a statement. The rule, which requires any rate increases to be offset with cuts to other services, "will help ensure that Medicare beneficiaries will continue to have access to the services provided by all physicians -- and that includes primary care physicians, as well as specialists."

Also without commenting on the legal action, AMA Executive Vice President and CEO Michael D. Maves, MD, MBA, said in a statement that the survey was a collaborative and transparent process. "At the time the survey was conducted, the information had not been updated for all medical specialties in more than a decade."

Although cardiologists and radiologists expected to see modest cuts in 2010 and generally supported such concessions to boost primary care, the new fee schedule goes too far, the groups said.