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1. Aggressive Lobbying and Grassroots Action Stops Medicare SGR Cut
Thanks to aggressive lobbying by CMA and AMA, and powerful grassroots calls for action from physicians, Congress on Saturday passed legislation to stop the 5 percent Medicare sustainable growth rate (SGR) cut that was scheduled to take effect January 1. The legislation will freeze the Medicare conversion factor for physician reimbursement at 2006 levels for one year and would give a 1.5 percent SGR increase to physicians who report on at least three quality measures starting July 1, 2007.
Approved by a 367 – 45 vote in the House and a 79 – 9 vote in the Senate, the bill also sets aside funds to help offset a projected payment cut in 2008.
“CMA is thankful to Congress for stopping the 5 percent SGR cut that could have further threatened access to care for California’s seniors. Reversing the cut, which cost $13 billion, was an extremely difficult task in the current political and financial environment in Washington, D.C.,” says CMA President Anmol S. Mahal, M.D. “However, CMA is extremely concerned with the new legislated framework for the quality reporting program and we will be working closely with Congress and CMS to improve the program in the coming year. “
The quality program, which will use Medicare’s current Physicians Voluntary Reporting Program as its framework, does not meet CMA and AMA’s standards for quality reporting. CMA will continue to work with Congress to improve this program to ensure that it is workable for all physicians in all modes of practice.
The freeze only applies to the 5 percent SGR cut, and would not affect the changes to the work relative value units (RVUs) stemming from Medicare’s recently completed five-year review. The new work values place a stronger emphasis on primary care, with significant increases to the values for evaluation and management (E&M) services, including pre- and postoperative surgical care. The new work values are based on recommendations made by the AMA/Specialty Society RVS Update Committee.
These new work values will increase spending for E&M services by $4 billion next year. However, federal budget neutrality requirements forced CMS to apply a 5.5 percent reduction to all services. This 5.5 percent reduction is separate from the averted SGR cut and is not affected by this new legislation.
The bottom line: Some physicians will still see net decreases in Medicare payments in 2007, but those decreases will be much smaller than they would have seen without the SGR freeze. And many physicians will see net increases.
“CMA is disappointed by the Medicare fee schedule cuts imposed on physicians because of the relative value changes,” says Dr. Mahal. “While we applaud overdue increases to the E&M codes, those increases should not be paid for with offsetting cuts to other physicians.”
Congress did not include CMA’s proposed fix to the geographic practice cost index (GPCI) because the legislation was limited to extensions of current law. We do have strong assurances from California’s Democratic leaders in Congress that they will help us fix our GPCI problem next year.
“CMA also plans to embark on an aggressive campaign next year to overhaul the entire physician payment system with a long-term solution,” says Dr. Mahal. “Physicians cannot continue to practice in such an unstable environment, waiting for Congress to act at the last minute to reverse such devastating cuts.”
Once again we would like to extend a sincere thank-you to all physicians who kept the pressure on Congress. There is no way Congress would have acted without major pressure from the physician community.
The bill also increases health savings account contribution limits and extends for one year Medicare’s Recovery Audit Contractor Program. More details, including a summary of the bill, are available in the Medicare Action Center.
Contact: Elizabeth McNeil, 415/882-3376 or emcneil@cmanet.org.
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2. Quality Matters: ‘Quality’ Hospitals Don’t Have Lower Mortality Rates
Patients treated at hospitals with high quality scores fare only slightly better than those treated at the lowest-ranked hospitals, according to a study published this week in the Journal of the American Medical Association.
University of Pennsylvania School of Medicine researchers examined 2004 data from 3,657 hospitals, comparing performance on Medicare-mandated quality measures and mortality rates for patients being treated for heart attack, heart failure, and pneumonia.
While patients at hospitals that scored high on quality measures fared better than those at hospitals who scored low, the statistical significance was minimal. For example, the absolute reduction in risk-adjusted death rates for heart attack patients was 0.005 for inpatient death, 0.006 for 30-day death, and 0.012 for death at one year. The figures were similar for patients with heart failure and pneumonia.
These results highlight the need for more meaningful quality measures. “Our study suggests that in the case of hospital performance, the CMS’s current set of performance measures are not tightly linked to patient outcomes. These findings should not undermine current efforts to improve health care quality through performance measurement and reporting,” the study authors wrote. “However, attention should be focused on finding measures of health care quality that are more tightly linked to patient outcomes. Only then will performance measurement live up to expectations for improving health care quality.”
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Contact: Sandra Bressler, 415/882-5171 or sbressler@cmanet.org.
3. Health Net Contract Violates RICO Settlement
Health Net physicians recently received a contract addendum intended to bring the health plan into compliance with the RICO settlement agreement. CMA has analyzed the addendum and the underlying contract and found that both contain language that not only violates the settlement terms, but also in many ways violates the Knox-Keene Act.
Among other things, the definition of “medically necessary” in the addendum and the underlying contract are inconsistent with the terms of the settlement agreement. The contract requires contracting physicians to participate in all of Health Net’s products, despite the fact that the plan agreed in the settlement not to require universal participation in its products. And should physicians decide to terminate their Health Net contracts to renegotiate compensation rates, they could be slammed with a “renegotiation fee” that is equal to 3 percent of their Health Net payments for the previous 12 months.
CMA has filed a dispute with the compliance dispute facilitator. Stay tuned to future issues of CMA Alert for more information on the dispute and its resolution.
A detailed analysis of the contract, and its flaws, is available to members at the members-only website.
CMA reminds physicians that before signing a health plan contract, it is important to know what value that relationship will bring to your practice. Physicians do not have to accept bad contracts or contracts that are not mutually beneficial.
To help physicians negotiate and manage complex third-party payor agreements, CMA has published a contracting toolkit, “Taking Charge: Steps to Evaluating Relationships and Preparing for Negotiations—A Focus on Payor Contracting.”
Click here for more information.
Contact: Aileen Wetzel, 916/444-5532 or awetzel@cmanet.org.
4. Act by 12/31 to Take Full Advantage of Pension Protection Act
The Pension Protection Act of 2006 now allows individuals age 70½ or older to make cash gifts of up to $100,000 per year to qualified charitable organizations, using funds from an IRA without incurring federal income tax on the withdrawal.
The tax break applies only to gifts made from a traditional or Roth IRA in 2006 and 2007, so you must act before the end of the year to take full advantage of this special charitable incentive.
Consider making a gift to the CMA Foundation now, and enjoy seeing the benefits of your generosity in your lifetime. As always, we encourage you to seek professional counsel when making important financial decisions.
Visit the CMA Foundation website for more information.
Contact: Cherie Davis, 916/551-2556 or cdavis@cmanet.org.
5. SAVE THE DATE: Adult Immunization Summit
CMA is again sponsoring the California Adult Immunization Summit. This year’s summit, which is presented by the Steering Committee for the California Adult Immunization Coalition, will be on Monday, April 30, in downtown Los Angeles.
The summit brings together a diverse group of stakeholders including physicians, public health officials, members of the media, health plan representatives, and vaccine manufacturers to discuss the lessons learned from this year’s flu season and lay the groundwork for future adult immunization initiatives.
Registration information and materials will be available online in February.
Contact: Kathleen DeFabrique, 415/882-5107 or kdefabrique@cmanet.org.
6. Member Benefit of the Week: Workers’ Comp Insurance
Don’t renew your workers’ compensation policy without first checking with CMA’s affinity partner, Marsh. Rates have dropped significantly in the past year, and qualifiying members are eligible for additional savings (as much as 16 percent) when they purchase or renew their policies through Marsh. Call Marsh at 800/842-3761 for information.
Click here for more information on CMA member benefits.
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No. 2074
