A Medical Device Daily

CMS published a payment schedule for doctors under Medicare Part B last week, and as expected, the schedule incorporates elements of the sustainable growth rate (SGR) mechanism that has created little other than controversy since its inception a decade ago.

According to the Oct. 30 CMS statement, the final rule "will reduce the conversion factor for services on or after Jan. 1, 2010 by 21.2% rather than the 21.5% projected in the proposed rule," a difference sure to be lost on physicians. The agency indicates it will post the final rule in the Nov. 25 edition of the Federal Register and will accept comments until Dec. 29. If all goes according to schedule, which history suggests is an unlikely scenario, the fee schedule will to into force on Jan. 1, 2010.

A group of senators sponsored a bill to eliminate the widely denounced SGR mechanism, but that effort died in the Senate last month (Medical Device Daily, Oct. 23, 2009). Titled the Medicare Physicians Fairness Act of 2009, the bill was calculated to have cost $247 billion over 10 years and was blasted by critics as because it was not included in healthcare reform legislation. Supporters of the bill countered with the argument that the SGR issue is a legitimately separate issue and should be addressed accordingly.

The proposed rule also reinforces that the assumed utilization rate for imaging equipment that is not deemed "expensive therapeutic equipment" will be set at 90%, although this would be phased in over four years. The 90% set point was proposed by the Medicare Payment Advisory Commission and taken up in the initial draft of the Senate Finance Committee's healthcare reform bill (MDD, Sept. 10, 2009), but that proposal has limited support. When CMS initially proposed a fee schedule for Part B radiological equipment earlier this year, a bipartisan group of senators wrote to CMS that the 90% assumption would suppress the provision of radiation oncology services (MDD, Oct. 1, 2009). CMS seems to have made the exception for radiation oncology with the language exempting "expensive therapeutic equipment."

CMS has proposed to boost fees for primary care doctors by increasing payment for the "welcome to Medicare" initial visit. These fees, CMS states, will "be more in line with payment rates for higher complexity services," but this increase is expected to increase Part B physician fee spending by 5%-8% "prior to application of the negative update required by the SGR."

In an Oct. 30 statement, the American College of Cardiology (ACC; Washington) declared itself "deeply frustrated" with the physician payment rule, arguing that CMS "ignored the call from Congress to step back and assess the data upon which it based" the rule. ACC asserts in the statement that the rule would "reduce payments for cardiovascular-related services averaging 27% for cardiology private practices" and that most cardiologists "are already looking for employment options as they plan to close their community based practices."

ACC's CEO, Jack Lewin, said in the statement that the association "will continue to fight for some solution to this nightmare situation," adding that CMS "can still undertake a full data review and readjust the policies where necessary."

Outpatient, ASC updates also reported

CMS also reported a change in policy along with the rate schedule for hospital outpatient departments and ambulatory surgical centers (ASCs). This statement, also dated Oct. 30, states that "most hospitals will receive an inflation update of 2.1% in their payment rates for services furnished to Medicare beneficiaries in outpatient departments." However, hospitals that did not comply with quality data reporting requirements will lose most of that, attaining an update of only 0.1% for calendar year 2010.

The hospital outpatient update allows hospitals to bill for "new pulmonary and intensive cardiac rehabilitation services furnished in hospital outpatient departments" and pays rural hospitals for educational services provided to patients stage IV kidney disease, the CMS announcement states.

CMS forecasts that the update will increase payments "to more than 4,000 hospitals and community mental health centers" next year to roughly $32.2 billion. Jonathan Blum, director of the agency's Center for Medicare Management, said in the statement that the updates "are intended to ensure that Medicare beneficiaries continue to receive high quality and efficient care in the most appropriate setting."

Regarding ASCs, the agency announced an inflation-based update of 1.2%, which is projected to raise spending at approximately 5,000 ASCs to $3.4 billion. As is the case with the Part B doctor fee schedule, the final rule will appear in the Nov. 20 edition of FR, and comments are due by Dec. 29.

Wrapping up a busy week, CMS reported an update for home health services. The agency said in yet another Oct. 30 statement that it will pay a 2% market basket update for home healthcare services but will hold outlier payments to a total of 2.5% of total home healthcare costs. The aggregate payment limit for outlier services – those running 60 days or longer and running up unusually high costs – for 2009 was set at 5%. Each home health agency will be limited to 10% outlier costs, the announcement says.

Jonathan Blum, director of CMS's Center for Medicare Management said in the statement that the regulation "builds on Medicare's efforts to refine its payment systems while working to reduce waste, fraud and abuse."