Doctor groups seek changes to 2011 Medicare fee rule

The organizations want CMS to hold off on making proposed revisions to the medical inflation rate until a comprehensive study is done.

By Chris Silva — Posted Sept. 6, 2010

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The American Medical Association and other physician organizations are supporting a proposal from the Centers for Medicare & Medicaid Services to review a key factor that helps determine Medicare doctor pay.

The physician groups, however, want the agency to hold off on making proposed changes to the Medicare Economic Index until the reviewers finish their work.

The request came in the form of Aug. 24 comments on the proposed 2011 Medicare fee schedule rule, which CMS published on July 13. The agency is expected to issue a final rule on or about Nov. 1.

In separate comment letters, the AMA, the American College of Physicians and the Medical Group Management Assn. said they back a plan outlined in the proposed rule to create a technical advisory panel to review all aspects of the Medicare Economic Index.

The MEI is an annual measurement of medical inflation, or the increased costs to physician practices of providing care. Along with other factors, it helps determine physician base pay rates for a given year under the sustainable growth rate formula.

Analysis from the panel would be considered in future federal rule decisions "to ensure that the MEI accurately and appropriately meets its intended statutory purpose," CMS said.

At the same time, CMS proposes to reconfigure the office expense element of the MEI -- one physician cost element that helps determine the final percentage -- before the panel has begun its work. It also proposes to assign different weights to the work, practice expense and liability expense components of the MEI to match data from the new Physician Practice Information survey, a joint effort led by the AMA that includes input from 72 specialty societies and other health care professional organizations.

In their comment letters to the agency, the physician organizations urged federal officials to withdraw their proposal to rebase and revise the MEI in 2011 and develop a new proposal after the technical panel conducts its comprehensive review.

New study called crucial

The AMA said the MEI study is needed because the index is outdated and does not take into consideration all expenses incurred by physician offices in the provision of care. Doctors are subject to a range of costly requirements that did not exist in 1973, when the MEI was developed, the Association said. They include compliance with rules about drug formularies, advanced beneficiary notices and Medicare audits.

"To ensure compliance with these requirements, physicians often must take actions that increase their practice costs, including hiring additional office staff, attorneys for legal and regulatory compliance, as well as accountants and billing companies, to ensure proper billing of claims to handle these additional responsibilities," AMA Executive Vice President and CEO Michael D. Maves, MD, MBA, wrote in the letter to CMS.

Without more accurate information, Dr. Maves said, it does not make sense to move forward with an MEI rebasing when physicians already face the prospect of enormous pay cuts mandated by the SGR formula. If Congress does not act by Dec. 1, a 23% reduction in Medicare pay will go into effect, followed by an additional 6.5% cut on Jan. 1, 2011. The AMA and other physician groups want Congress to scrap the SGR permanently and replace it with a pay system that more directly tracks the MEI.

PQRI changes

In its comment letter on the proposed fee schedule rule, the AMA said CMS must use its administrative authority to improve the Medicare Physician Quality Reporting Initiative, particularly as its pertains to feedback reports and a physician appeals process.

The new health system reform law requires the federal government to provide timely feedback to physicians on how successful they have been when submitting data on quality measures through PQRI. CMS proposes to meet this requirement by providing 2011 feedback reports on or about the time that it issues 2011 bonus payments to doctors who met the reporting thresholds.

Dr. Maves, however, wrote that this is unacceptable, saying incentive payments and feedback reports are not distributed until seven or eight months after the yearlong reporting period has ended.

"To be effective, reports must be distributed at a point during the reporting period so as to allow physicians to assess their reporting and performance status, and revise their reporting practices, if needed, to be a successful participant," he wrote.

The AMA once again called on CMS to implement a PQRI appeals process for doctors who believe they incorrectly may have been deemed unsuccessful in their quality reporting. Doctors also have reported difficulties in accessing and obtaining reliable information through CMS' Quality Net Help Desk. Dr. Maves urged the agency to make improvements by adding more telephone lines and hiring more qualified staff.

The ACP similarly called on CMS to provide timely, actionable PQRI feedback reports and "institute a more structured and transparent appeals process."

In addition, the AMA said it strongly opposes the CMS proposal to impose Medicare financial penalties in 2012 and 2013 against physicians who do not report electronic prescribing during the first six months of 2011. Instead, the Association wants the agency to review all 2012 and 2013 e-prescribing activity to assess any required penalties during those years.

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Unrealistic assumptions

The Association says the calculation doesn't take into account many factors that affect physicians' practice costs, such as the growth in employment in doctors' offices. Current employment levels are almost 20% higher than in 2001:

Employment growth
2002 3.7%
2003 4.8%
2004 6.9%
2005 9.2%
2006 12.0%
2007 15.1%
2008 17.4%
2009 18.4%

Source: The American Medical Association (based on U.S. Bureau of Labor Statistics Quarterly Census of Employment and Wages)

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