1. CMS Publishes 2007 Medicare Payment Rule; Unless Congress Acts,
Some Specialties Will See Cuts of Up to 20%
Depending on your specialty, your Medicare reimbursement could drop by six to 20 percent next year, a combined result of the five percent sustainable growth rate (SGR) cut and other physician payment changes announced last week by the Centers for Medicare and Medicaid Services (CMS).
As you know, the five percent cut is the result of the flawed SGR formula that was supposed to establish a “sustainable” growth rate for spending on doctors’ services. The formula allows Medicare spending on physician services to grow at the rate of the gross domestic product (GDP), but it actually penalizes physicians because the cost of physician services rises more rapidly than the GDP. AMA and CMA have been working vigorously to convince Congress to change the formula and reverse the 5 percent cut scheduled to take effect January 1.
The other payment changes are the result of the new practice expense methodology and changes in work relative value units (RVUs) stemming from the recently completed five-year review. CMS is mandated under law to review physician work RVUs every five years to maintain relativity of the physician fee schedule.
The new Medicare work RVUs are largely a product of the AMA/Specialty Society RVS Update Committee (RUC), with CMS accepting 95 percent of the committee’s recommended work values. The RUC is an extremely diverse committee with voting representatives from a majority of the medical specialty societies. The changes place a stronger emphasis on primary care, with significant increases to the work values for evaluation and management (E&M) services, including postoperative surgical care. For 90-day global services, this can be a significant payment increase. The new RUC-recommended work values also include increases for cardiothoracic and orthopaedic surgery procedures and other services.
However, because the SGR cut reduces payment for all physician services, only four specialties will see net increases in 2007, infectious disease (+4%), emergency medicine (+2%), pulmonary disease (+1%), and endocrinology.
The estimated economic impact of the new work values is $4 billion. By law, proposed payment changes over $20 million must be budget neutral. In the absence of Congressional action, CMS was forced to apply a budget neutrality factor to the RVUs. This means that payments for some services will be cut by as much as 14 percent, on top of the 5 percent across the board SGR cut.
As required by the Deficit Reduction Act of 2005, the physician payment rule decreases payments for imaging services done in physician offices if the office payment rate is higher than the rate for the same procedure done in an outpatient hospital setting. A bit of good news: because of AMA/CMA advocacy, the cut will be 25 percent, rather than the 50 percent cut originally proposed by CMS.
If reimbursement for physicians were calculated using the Medicare Economic Index (MEI), as it is for all other Medicare providers, almost all primary care physicians and most surgical specialties would see net payment increases. CMA has for years been advocating that physicians should be paid — as are health plans, hospitals, and nursing homes — according to the MEI, which is a market index of actual medical practice costs. Even with the imaging cuts, cardiology would have a net change of zero if the MEI were used to calculate physician payments.
These are the most sweeping changes to the Medicare fee schedule in years. CMA is extremely angry that physicians will be experiencing such changes on top of the 5 percent SGR payment cut.
“CMA will not back down. We will continue our work with the new Congress to enact a long-term, fair payment system,” says CMA president Anmol S. Mahal, M.D. “CMA will continue to fight for a Medicare fee schedule that accurately reflects increases in practice costs. And we will not give up until we have achieved a better system.”
Physicians are urged to contact their members of Congress and tell them they must stop these cuts. Call AMA's grassroots hotline at 800/833-6354, enter your zip code, and you will be automatically connected with your member of Congress.
Click here for more information, including a side-by-side comparison of 2006 and 2007 payment rates by CPT code.
2. State Temporarily Suspends Mercury-Free Vaccine Law
California’s Health and Human Services Agency (HHS) last week announced it would temporarily suspend a new state law that bans the use of mercury-containing vaccines for small children, citing a vaccine shortage caused by production delays. Exemptions to the ban are allowed in the event of potential public health emergencies, including an epidemic or vaccine supply shortage.
Only Sanofi Pasteur manufactures a vaccine that complies with California’s new law, which took effect July 1 and bans the use of mercury-containing vaccines for children younger than 3 years old. Most multidose vials of flu vaccine are made with thimerosal, a mercury-containing preservative.
Because of delays in vaccine production, many pediatricians have only received partial orders of the mercury-free flu shots and have had to turn away parents seeking flu vaccine for their small children.
The suspension was issued at the request of CMA, the American Academy of Pediatrics, the California Academy of Family Physicians, and Kaiser Permanente. HHS secretary Kim Belshe agreed to waive the ban for six weeks because the health threat from flu outweighs the worries about mercury-containing vaccines.
Click here for more information.
Contact: Sandra Bressler, 415/882-5171 or sbressler@cmanet.org.
3. Aetna to Stop Bundling Urinalysis and Pulse Oximetry Codes
Aetna recently announced that it would stop bundling urinalysis dipstick and pulse oximetry codes submitted with the same date of service as evaluation and management (E&M) codes.
Effective November 12, Aetna will pay for urinalysis dipstick codes (81002 and 81003) and pulse oximetry codes (94760, 94761, 94762) when billed with office-based E&M codes appended with modifier 25. Aetna will also retroactively pay previously denied claims with dates of service on or after May 1. Physicians do not have to resubmit claims.
The changes were recommended by Aetna’s Physicians Advisory Board, which was created as part of Aetna’s RICO lawsuit settlement. Aetna in 2003 became the first HMO to settle with CMA and more than a dozen other state medical associations in CMA’s RICO lawsuit. Since then, six other HMOs have settled the fraud and racketeering cases. CMA filed the lawsuit six years ago, challenging the rapacious tactics of the for-profit managed care industry. The case allowed physicians to air profound grievances against an industry that has unfairly exploited them for more than a decade.
Click here for more information.
Contact: CMA’s legal information line, 415/882-5144 or legalinfo@cmanet.org.
4. Taking Charge: CMA Hosts Payor Contracting
Seminars for Physicians and Their Office Staff
CMA and county medical societies are cohosting a series of seminars to help physician practices assess payor contracts and prepare for contract negotiations. The next “Taking Charge” seminar is November 16 in Oakland.
Other scheduled seminars:
- December 7, Humboldt
- February 8, Riverside/San Bernardino
- February 22/23, San Diego (emphasis on Work Comp/GP)
- February 27, San Ramon
- March 29-31, San Diego, during the CMGMA Annual Conference
- May 2, Ventura, during the PAHCOM National Conference
Attendees will learn how to:
- evaluate current and proposed payor contracts
- target payors for contract termination, negotiation, or renegotiation
- monitor payor compliance with contract terms
- determine a payor’s value to their practice
- and more!
Participants will also receive a copy of CMA’s payor contracting guide “Taking Charge: Steps to Evaluating Relationships and Preparing for Negotiations,” a $100 value.
Click here for more information.
Contact: Jewel Thompson, 916/551-2061 or jthompson@cmanet.org.
5. Highlights from CMA Board of Trustees Available
CMA’s Board of Trustees met October 27-30 in Sacramento before and during the association’s annual meeting.
Click here for a summary of the board’s major actions.
Contact: Ginnie Yee, 415/882-5170 or gyee@cmanet.org.
6. San Diegan Elected CMA Speaker;
Surgeon from Humboldt Becomes Vice Speaker
James T. Hay, M.D., a family physician in San Diego County, was elected Speaker of the House at CMA’s annual meeting last week in Sacramento. Luther F. Cobb, M.D., a general thoracic and vascular surgeon who practices in Arcata and Eureka, was elected Vice Speaker. The speaker and vice speaker are members of the seven-doctor executive committee of the CMA Board of Trustees.
Drs. Hay and Cobb both have distinguished histories of involvement in organized medicine. Dr. Hay, a past president of the San Diego County Medical Society (SDCMS), has served on the CMA Board of Trustees since 1994. He is past president of the SDCMS foundation and serves on the board of the San Diego chapter of the American Red Cross.
Dr. Cobb, a past president of the Humboldt-Del Norte County Medical Association, has chaired the CMA Council on Legislation for the past two years and has been a delegate to the CMA House since 1992.
Click here for more information.
7. CMA Member Benefit of the Week: 15% Off Security Prescriptions
CMA members receive 15 percent off security prescription pads from RxSecurity. Special pricing is available for hospitals, clinics, and other high-volume purchasers.
Members pay $2.55 - $4.42 per pad for one-part pads, and $4.16 - $4.24 for two part pads, depending on the total number of pads ordered. While some printers charge extra “setup” and other fees, RxSecurity’s prices include everything, and shipping is free.
Click here for more information.
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No. 2070
