Medical Device Daily Washington Editor

WASHINGTON — As the 109th Congress drew its last breaths — or some might say, gasps — it cobbled together various measures designed to deal with some of the healthcare funding dilemmas that dotted the legislative calendar all year long, some in connection with the Deficit Reduction Act (DRA) of 2005.

Makers of scanning equipment will head home for the holidays with coal in their stockings. Congress did not roll back the impending cuts to payments for imaging services that the DRA imposed on the Centers for Medicare & Medicaid Services . H.R. 5704, introduced by Rep. Joe Pitts (R-Pennsylvania), would have suspended the cuts for two years (Medical Device Daily, July 7, 2006), but despite substantial support in the House, the bill never flew.

Congress reacted sharply to the March 17, 2005, report from MedPAC that of the five major categories of services under Part B, imaging services sustained the largest cumulative per-beneficiary growth between 1999-2003 at 45%, more than twice the overall average of 22%. The commission indicated that movement of imaging services from inpatient to outpatient settings accounted for only $300 million of the $1.6 billion jump seen in these services between 2001 and 2003.

Stephen Ubl, CEO of the Advanced Medical Technology Association (Washington), expressed disappointment “that Congress failed to eliminate the draconian reductions” and that the association wants Congress to “revisit this issue early next year.”

Opponents of the cuts say that Congress had no legitimate policy rationale and was simply looking for savings.

Tim Trysla, executive director of the Access to Medical Imaging Coalition (AMIC; Washington), said in a statement that the cuts “were nothing that the CMS or MedPAC ever advocated,”calling the cuts “a large money grab in the closed doors of the DRA conference.”

“We’re going to work to educate members to reverse the cuts,” he declared.

Dawn Hopkins, director of reimbursement and healthcare policy for the Society of Interventional Radiology (Fairfax, Virginia), told MDD that “we’re disappointed and we’re going to continue to seek a carve-out” for therapeutic radiology from the DRA cuts. She said that the primary interest of Congress at the time of DRA was to hold down diagnostic costs and that therapeutic uses “are not driving up these huge increases” in Medicare billings.

Hopkins noted that the association and several partner organizations, working under the umbrella of AMIC had been “making great headway in our efforts to educate Congress” on the impact of the DRA cuts, including Nathan Deal (R-Georgia), Ways and Means health subcommittee chair for the 109th Congress. “Democrats are not as familiar with the issues,” she said, hinting that the coalition will have to reboot its efforts to get Congress up to speed.

Hopkins noted that cuts to therapeutic radiology in an outpatient setting “will drive it back into the hospital, where it’s a lot more expensive.”

5.1% cut is avoided

In contrast, many med-tech manufactures and physicians could be pleased with the final flurry of congressional activity.

Doctors whose practices include Medicare patients fared reasonably well by dodging the looming 5.1% cuts packaged into DRA. In addition, Congress promised doctors that if they hew to, and report on, a set of three quality measures, they can earn another 1.5% from Uncle Sam. Otherwise, their earnings are flat.

However, the quality bonuses will not see the light of day until some time in 2008, due to operational protocols at CMS.

In the classic rob-Peter-to-pay-Paul scenario, Congress dug up an offset from Medicare Advantage (Part C managed care) plans to pay for this action. It yanked the funds from those set aside for development of regional preferred provider organizations operating under Medicare Advantage, but since plan participation is still limited, the impact is expected to be minimal.

Cecil Wilson, MD, who chairs the board of trustees at the American Medical Association (AMA; Washington) said in a statement that the action “provides an important but temporary reprieve for seniors and the physicians who care for them.” AMA believes the reductions would have cut services to the nation’s elderly,

But a 2005 MedPAC survey of providers indicated that in 2002, 66% of primary care physicians were accepting new Medicare patients. The percentage for all specialties, which includes surgical and medical practitioners, was more than 70%. Similarly, a 2004 survey showed that “for most indicators, Medicare beneficiaries enjoyed a similar or better access than their privately insured counterparts.”

Still, Part B doc fee controversies may show up again next year.

The legislation that Congress employed to get many healthcare payment bills through sets up a fund of slightly more than $1.3 billion to “promote physician payment stability and physician quality initiatives,” according to a House Ways and Means Committee summary. The problem is that much of that sum will go to cover Part B doc fees in the coming calendar year, leaving Congress with another patch-up job for 2008.

Home healthcare holds onto 3.3% boost

Home healthcare firms appeared to be winners — or, depending on your understanding of Medicare math, one of the non-losers. Congress decreed that the scheduled boost of payments of 3.3% will go through as promised despite the assertion by the Medicare Payments Advisory Commission (MedPAC) that these entities enjoyed an average profit margin of 16.7% on their 2005 Medicare contracts.

Stacey Harms, deputy director of legislative affairs at industry association AAHomecare (Alexandria, Virgnia), told MDD that “we’re lucky we didn’t get cut” in the just-finished legislative cycle. She said that the prospects for further cuts are “always a concern” in reference to the FY08 budget that the White House will forward to Congress in March.

Harms said that MedPAC is “not necessarily hostile toward home healthcare agencies,” but “sometimes they do not take all the information into account.” MedPAC’s position on home healthcare profit margins fails to account for low margins on Medicaid work. Harms said that many of the association’s member firms lose money on Medicaid patients.

As for the 110th Congress, Harms expressed optimism that there will be “a more bipartisan dialogue” in the committees, and that the House Ways and Means committee has been the most difficult to work with in the past. “They were less receptive to what we told them” about the potential impact of policy changes than the association’s members would like, she noted, a feature the association hopes will change in the upcoming Congress.

No Comments