Sustainable Growth Rate Formula Research Articles

Medicare Fee Cut Delayed, but at What Price?

Back to table of contents Previous article Next article Government NewsFull AccessMedicare Fee Cut Delayed, but at What Price?Jonathan WolfeJonathan WolfeSearch for more papers by this authorPublished Online:16 Mar 2012https://doi.org/10.1176/pn.47.6.psychnews_47_6_5-aAbstractThere’s always next year. Brooke Becker/ShutterstockThis seems to be Congress’s mantra when it comes to addressing the sustainable growth rate (SGR) formula that each year calls for larger and larger cuts in Medicare reimbursement to physicians. With Congress’s latest SGR-related vote on February 17, the 27 percent payment reduction scheduled for March 1 is now postponed until January 1, 2013. By that time, however, the mandated cut is likely to be about 32 percent.While the latest in a string of annual delays may be good news for physicians in the short term, the only solution to the problems caused by this long-troublesome formula—and the failure to fix it—according to APA and other medical groups, is a permanent repeal of the SGR formula.“Every year that Congress puts off repealing the SGR just adds to the final cost,” said APA Medical Director James H. Scully Jr., M.D., in a statement following the recent congressional maneuver. “We are also deeply concerned that the ‘doc fix’ is paid for by cutting bad debt and disproportionate-share payments to those hospitals that are caring for the nation’s indigent patients.”Specifically, the latest SGR postponement would be financed by the following health care offsets:$6.9 billion from reimbursing hospitals and skilled nursing facilities that incur debt from treating beneficiaries who do not or cannot pay their share of services.$5 billion from a program created by the Affordable Care Act (ACA) to support prevention and public-health initiatives.$4.1 billion from the Medicaid Disproportionate Share Hospital allotment program.$2.7 billion from clinical laboratory service payments.$2.5 billion from elimination of a fund established under the ACA to support Louisiana’s loss of Medicaid dollars resulting from federal support for Hurricane Katrina recovery efforts.Additionally, Congress has approved discontinuation of the 5 percent “bump” in payment for Medicare psychotherapy services, which was extended several times over the past four years.So, how can the government pay for a permanent fix? Last October, APA joined Reps. Michael Burgess (R-Texas) and Gene Green (D-Texas) in rejecting the Medicare Payment Advisory Commission’s proposal to replace the SGR with a payment structure that would separate primary care clinicians from clinicians providing specialty care.Under that plan, primary care professionals would have seen their reimbursement rates frozen from 2012 to 2022, while specialty care providers’ rates would have declined by 5.9 percent each year from 2012 to 2014 before being frozen from 2015 to 2022.The recommendation of APA, the AMA, and more than 100 cosigning medical groups in a January 23 letter to House Ways and Means Committee Chair Dave Camp (R-Mich.) was that Congress offset the cost of a full SGR repeal with excess funds that had been planned for overseas operations like the wars in Afghanistan and Iraq, which would otherwise go unused.“We agree that our nation faces significant fiscal challenges, and that Medicare is not immune,” wrote APA and its cosigners. “However, it is impossible to implement commonsense programmatic reforms while an immediate and constant threat of massive cuts hangs over the program.”The text of APA’s cosigned letter to Rep. Camp is posted at www.ama-assn.org/resources/doc/washington/medicare-sgr-sign-on-letter-23jan2012.pdf. ISSUES NewArchived

Congress, President Defer Painful Actions

Whether election year ennui was the cause or not, Congress and the President started 2012 by putting off major actions that would affect health care professionals. One event pleased physicians, but the other, while rescuing doctors from an immediate and drastic pay cut, continued years of frustration rooted in the Sustainable Growth Rate formula for Medicare payments. First, the Health and Human Services department announced Feb. 16 that it would not for the foreseeable future implement ICD-10 codes, formally known as the International Classification of Diseases, 10th Edition, diagnosis and procedure codes. Physician organizations had sought just such a delay, stating that it would be unduly burdensome to switch to the new system at a time when clinicians were also adjusting to information technology requirements under the Affordable Care Act. The ICD-10 had been scheduled to go into effect on Oct. 1, 2013. No new compliance date was announced. “We have heard from many in the provider community who have concerns about the administrative burdens they face in the years ahead,” HHS Secretary Kathleen Sebelius said in a statement. The American Medical Association was among the most vocal in seeking a delay. The new system would have an estimated 68,000 codes, replacing the 13,000 codes contained in the current system (ICD-9), according to the AMA. In January, the AMA wrote to House Speaker John Boehner (R-Ohio) asking him to find a way to stop implementation of ICD-10. Physicians could face implementation costs anywhere from $83,290 to more than $2.7 million, depending on the size of the practice, according to the letter. Six days after the ICD-10 announcement, President Obama made it official that physicians will not face Medicare payment cuts this year, when he signed a compromise reached by members of Congress that included an extension of both the payroll tax holiday and unemployment benefits. The bill averted the 27% pay cut that was scheduled to take effect on March 1, as called for under the Sustainable Growth Rate formula (SGR). But if Congress and the President don’t act again this year, doctors could see their Medicare payments cut by nearly a third come Jan. 1, 2013. Physician organizations reacted to the news with a mixture of relief and disappointment. The American College of Physicians, the American Academy of Family Physicians, the American College of Surgeons, and the American Osteopathic Association, chastised Congress for failing to use savings from slowing the wars in Iraq and Afghanistan to finance a permanent repeal of the SGR. The legislation is funded at the expense of several categories of health care providers, including skilled nursing facilities. To pay for the SGR fix and other provisions of H.R. 3630, Congress reduced the amount that Medicare will pay hospitals, skilled nursing facilities, and certain health clinics to cover bad debts from beneficiaries’ unpaid co insurance and deductibles. Payments to clinical laboratories were cut by 2%, and the lawmakers stripped $5 billion from the Prevention and Public Health Fund, an Affordable Care Act program that funds preventive health programs. The reductions are slated to start in October (fiscal year 2013). CfA

Medicare Agency, Providers Face Challenges This Year

Medicare Agency, Providers Face Challenges This Year

‘Final’ 2012 Fee Schedule Still Assumes Large Cuts

‘Final’ 2012 Fee Schedule Still Assumes Large Cuts

Medicare Payment Reform — Proposals for Paying for an SGR Repeal

The sustainable-growth-rate formula (SGR) used to calculate Medicare's physician fees remains a political football. MedPAC recommends replacing it with a “predictable 10-year path” of fee-schedule updates, offset by reduced payments to various providers and suppliers.

Summertime, and the Budget Is Squeezing

Alot of people in Washington didn’t get the memo this year: Going into August, you’re supposed to slow down. Congress should take it easy, limit itself to National Funnel Cake Day resolutions and the like. But no, politics and government shifted into overdrive in late July, as the debt ceiling threatened to crush us all. As this column went to press, there hadn’t yet been an escape from the heat or default or the possible gutting of Medicare, Medicaid, and all things costly to the federal government. But the unfinished process spoke volumes about possibilities for future health and long-term care spending. It was a good news/bad news story on physician payments under Medicare and long-term care insurance. First, the bad, or at least the scary: The Centers for Medicare & Medicaid Services released its annual proposed fee schedule for 2012, and it made it official that Medicare physician fees are slated to be cut overall by 29.5% under the Sustainable Growth Rate (SGR) formula. AMDA’s government affairs department pulled the figures for nursing facility codes (99304-10, -15, -16, and -18) and showed that fees for physicians who care for nursing home residents could see an update of at least –12.1% (99316) and as much as –28.9% (99307), with most cuts being at the bigger end of that spectrum. That is, they’ll be that drastic if Congress doesn’t temporarily override SGR or permanently fix the physician payment system. Both bad and good news for many supporters of long-term care came up during the deficit-ceiling deal making. Staying with the potentially bad news first, the on-again, off-again (but influential deficit-cutting) “Gang of Six” senators stated bluntly that they would repeal the CLASS (Community Living Assistance Services and Support) Act, the long-term care insurance program created last year under the Affordable Care Act. Ironically, the President’s National Commission on Fiscal Responsibility and Reform (known as the Bowles-Simpson group) had estimated that preempting Summertime, and the Budget Is Squeezing By Keith Haglund

MedPAC Calls SGR Formula Flawed, Urges Replacement

WASHINGTON – The Sustainable Growth Rate is “flawed in many ways,” according to the Medicare Payment Advisory Commission, which called for alternatives in its semiannual report to Congress issued June 15.Reform of the Sustainable Growth Rate formula (SGR) is essential to fixing the American health care system, MedPAC Chairman Glenn M. Hackbarth said in a statement.It is not the first time that the commissioners have expressed their concern about the SGR as a threat to both physicians and patients. One idea that has garnered strong support from the commission is to overhaul the payment system by rewarding primary care physicians and encouraging a medical home model of care.MedPAC executive director Mark Miller said that the SGR proposals are just a small facet of MedPAC's goal to move Medicare away from its fee-for-service payment system. MedPAC commissioners have been discussing how to move Medicare toward more global payment models.The report can be viewed online at http://medpac.gov/documents/Jun11_EntireReport.pdf. WASHINGTON – The Sustainable Growth Rate is “flawed in many ways,” according to the Medicare Payment Advisory Commission, which called for alternatives in its semiannual report to Congress issued June 15. Reform of the Sustainable Growth Rate formula (SGR) is essential to fixing the American health care system, MedPAC Chairman Glenn M. Hackbarth said in a statement. It is not the first time that the commissioners have expressed their concern about the SGR as a threat to both physicians and patients. One idea that has garnered strong support from the commission is to overhaul the payment system by rewarding primary care physicians and encouraging a medical home model of care. MedPAC executive director Mark Miller said that the SGR proposals are just a small facet of MedPAC's goal to move Medicare away from its fee-for-service payment system. MedPAC commissioners have been discussing how to move Medicare toward more global payment models. The report can be viewed online at http://medpac.gov/documents/Jun11_EntireReport.pdf.

AAFP PRESIDENT GOES TO CAPITOL HILL TO PROPOSE BLENDED PAYMENT MODEL TO FIX MEDICARE PAYMENT SYSTEM

The AAFP has been working with Congressional representatives and the other primary care physician associations for years in an attempt to fix the Medicare payment system for family physicians. The sustainable growth rate (SGR) system that is used currently to determine payments for Medicare physicians has resulted in drastic cuts to physician pay during the past few years. Those cuts have always been alleviated by Congressional action, but the AAFP continues to call on Congress to revamp the payment system. On May 5, the AAFP once again took its message to Capitol Hill, but this time the Academy was invited to testify before a House panel about alternatives to the SGR formula. AAFP President Roland Goertz, MD, MBA, of Waco, Texas, told the health subcommittee of the Energy and Commerce Committee, during a hearing on Capitol Hill that Congress has to enact a Medicare physician payment system that provides greater support for team-based primary care and the patient-centered medical home (PCMH) through a blended payment model, “Congress, understandably, is most concerned with controlling federal expenditures for health care, especially given the rapidly rising costs for Medicare,” said Goertz during his testimony. However, “There is growing and compelling evidence that a health care system based on primary care will help control these costs, as well as increase patient satisfaction and improve patient health. “Simply reforming the fee-for-service system, which undervalues preventive health and team care coordination, cannot produce the results that Congress and patients require,” said Goertz. He proposed a blended payment model that contains 3 elements: some fee-for-service payments a care coordination fee that compensates physicians for their expertise and the time required for primary care activities, which are not paid for currently performance bonuses based on a voluntary pay-for-reporting/performance system, and for care team members and services that are not eligible for fee-for-service billing Acknowledging that it will take time to transition to a blended payment model, Goertz, called for a 5-year transition period with mandated payment updates that incorporate higher rates of at least 2% for primary care physicians for Medicare fee-for-service payments. In addition, he noted, Congress should continue to pay the primary care incentive payment for primary care services called for by the Patient Protection and Affordable Care Act, but it should increase that incentive payment from 10%–20%. Congress also needs to permanently extend the program that equalizes Medic-aid and Medicare payment rates, Goertz said. “Both of these programs, along with mandated updates that are 2% higher for primary care physicians, will help stabilize current (medical) practices that have seen such financial turmoil in the past few years,” said Goertz. During this proposed 5-year period, it also will be crucial to encourage as much innovation as possible, said Goertz. “The new CMS Center for (Medicare and Medicaid) Innovation needs to be a key focus of this effort. We believe this center can help CMS create market-based, private sector-like programs that can significantly bend the health care cost curve.” The SGR formula has repeatedly called for cuts in Medicare payments to physicians during the past few years. In 2010, Congress intervened 5 times to block impending Medicare payment cuts mandated by the SGR. Without further Congressional intervention, physicians face a cut of 29.4% on January 1. The SGR formula threatens the stability of the Medicare system for both patients and physicians, said lawmakers during the hearing. The SGR is symptomatic of a “fundamentally flawed payment system,” said Rep. Joe Pitts, R-Pa., chair of the subcommittee. “Keeping the current system or making minor adjustments is no longer a viable option.” Congress needs to “work toward a new way of paying for care, for physicians and all providers, that encourages integrated care,” noted subcommittee member Rep. Henry Waxman, D-Calif. The PCMH is an excellent example of an integrated care model that uses a team-based approach to deliver patient-centered care, said Goertz during a question-and-answer session, adding, “There are more than enough demonstrations that already show the benefit (of the medical home).” Subcommittee member Rep. Tammy Baldwin, D-Wis., also touted the benefits of the PCMH. She described the experience of Dean Health Systems, an integrated health system in her district that has significantly improved care and reduced costs by adopting the medical home model. The health system developed its own payment system to support the PCMH model because of the limitations of the fee-for-service system, said Baldwin. Developing a medical home where a practice-based care team takes collective responsibility for a patient’s ongoing care, “would not have been possible within the (current) fee-for-service construct,” said Baldwin.

Are Higher or Lower Medicare Rates Ahead?

Are Higher or Lower Medicare Rates Ahead?

When Patients Call, Will Physicians Respond?

PROPONENTS OF THE PATIENT PROTECTION AND AFfordable Care Act (usually referred to as the Affordable Care Act), which aims to cover some 32 million uninsured individuals, would do well to ask whether physicians will care for these individuals once the act is implemented. Most physicians provide care for some uninsured or poorly insured patients, relying on payments from insured patients to cover the shortfall; private practice physicians are the main source of care for the uninsured and poor. But recently physicians have become less likely to provide such care “because their practices are being squeezed by steadily declining insurance reimbursement on the one hand and sharply rising operating costs on the other. These pressures make it increasingly difficult to see patients who cannot afford to pay—or, in the case of Medicaid, patients for whom payment rates are often inadequate.” The Affordable Care Act will not alleviate these pressures and may make them worse. The law includes provisions and decreases in payment that will undermine physicians’ ability to care for both the newly insured and patients who already have insurance. Under the act, it is estimated that half the currently uninsured individuals will be covered under Medicaid by expanding eligibility guidelines. The federal government has committed to cover the cost of these newly enrolled Medicaid patients for a specified period (100% of costs in 2014-2016; smaller amounts thereafter). However, states are already struggling under huge budget deficits resulting from their existing Medicaid programs. States’ costs will increase further on July 1, 2011, when federal stimulus aid disappears and each state’s share of Medicaid costs increases by one-fourth to one-third. Because states are required to maintain eligibility guidelines to keep federal funding, their only options for deficit reduction are cutting already low Medicaid reimbursements and limiting the breadth of coverage. In 2010, thirty-nine states decreased Medicaid payments to physicians, hospitals, and nursing homes, and many states are planning future reductions of as much as 10%. Expanded insurance coverage will succeed only if it offers adequate reimbursement rates to physicians to take on the newly insured patients. Physicians are already reluctant to accept Medicaid reimbursement, which is a fraction of what other insurances pay. Hospitals are having financial difficulties with current Medicaid reimbursements; lower rates and hospital closings are inevitable. Although the Affordable Care Act plans to increase Medicaid reimbursement rates for primary care physicians to Medicare rates for 2013-2014, that will be little help to patients in need of specialty care where rates will be cut and impending Medicare cuts will discourage many physicians from seeing these patients. More than half of the nearly trillion dollar price tag for expanding coverage under the Affordable Care Act will be paid by decreasing spending for the more than 46.3 million individuals covered by Medicare. The biggest decrease comes from reduced payments to clinicians and health care institutions. For example, the Affordable Care Act assumes that a planned 30% reduction in physician fees scheduled to occur under the Medicare sustainable growth rate (SGR) formula over the next 3 years will occur. Rather than fix a flawed SGR formula, Congress over the past 8 years has repeatedly delayed scheduled SGR decreases. Athough an SGR fix was in the original House bill (HR 3200), which organized medicine supported, the final Affordable Care Act that Congress passed left the SGR formula intact. In the latest deferral, Congress delayed for 1 year cuts scheduled for December 1, 2010, and for January 1, 2011, totaling 25%. Medicare reimbursement rate cuts of 29.5% are scheduled for January 1, 2012. These will affect elderly individuals and persons with disabilities covered under Medicare and military families whose TRICARE coverage is based on Medicare rates. In addition, starting in 2011, the Affordable Care Act plans lower payment rate updates to most categories of Medicare providers to reflect the increase in productivity experienced in the economy overall. Because medical services are labor-intensive, health care institutions and clinicians have been unable to improve their productivity to the same extent as the overall economy. The 2010 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds (the Medicare Trustees) anticipates that Medicare productivitybased payment-rate updates will increase 1.1% more slowly

Managing Episodes of Care: Strategies for Orthopaedic Surgeons in the Era of Reform

While the demand for hip and knee replacements is on the rise, reimbursement from public payers continues to decline. As Medicare experiments with payment reform strategies, such as the National Pilot Program on Payment Bundling outlined in the Patient Protection and Affordable Care Act (PPACA), orthopaedic surgeons will need to identify ways to cut costs, maintain quality measures, and manage post-acute care to survive in a changing marketplace. This article seeks to demystify the episode-of-care bundled payment methodology, provide a roadmap of what orthopaedic surgeons can do to participate in this demonstration project, and present strategies to mitigate the inherent risks. ### Fiscal Underpinnings In the last twenty years, orthopaedic surgeons have experienced declining Medicare reimbursement, with surgeon payments for total hip and knee replacement decreasing by 69% and 66%, respectively1. Without a permanent fix to the flawed Medicare sustainable growth rate formula, physicians’ reimbursement will continue to decline2. Medicare reimbursement is also a challenge for hospitals. Sixty-three percent of all U.S. hospitals have negative margins on Medicare patients, with one-quarter sustaining inpatient margins of –20% or lower3. As the U.S. population ages, a growing number of patients requiring total hip and total knee replacements will come from the Medicare population. Additionally, an estimated thirty-two million previously uninsured Americans will be insured under plans that reimburse at Medicaid or Medicare-equivalent rates under PPACA coverage expansions by 20144. Orthopaedic surgeons and hospitals will need to find ways to more efficiently treat this population to protect market share and achieve positive margins on Medicare payments. In an attempt to bend the cost curve, Medicare has begun experimenting with innovative payment methodologies that encourage coordinated, high-quality, and efficient care. Such methodologies are being tested as alternatives to the traditional fee-for-service arrangement criticized for rewarding the overuse and duplication …

Health Reform Was Only an Opening Act

Health Reform Was Only an Opening Act

Physicians Offer Rx for Health Reform Act

Physicians Offer Rx for Health Reform Act

MedPAC Ponders SGR Alternatives for Provider Pay

WASHINGTON – Multiple options exist to permanently fix the Medicare Sustainable Growth Rate formula, but each has its cost to practitioners, patients, and the program, according to staff analysts for the Medicare Payment Advisory Commission. Among the options MedPAC staff recently presented to commissioners were adjusting the SGR's spending targets so that they are no longer cumulative and allowing some flexibility. Either option would remove the annual pay cut threat that doctors and others have endured since 2002 under the SGR, according to Cristina Boccuti, a principal policy analyst for MedPAC. However, neither option would leave any room to offer incentives for improved quality and efficiency, she added. In the past, MedPAC has recommended setting target growth rates – and payment rates – according to particular service categories, and the commission is looking in this direction again. For example, separate categories could be established for primary care, imaging, minor procedures, and anesthesia, allowing rates to more closely track volume of services. Two options that seemed to pique commissioners' interest: exempting certain providers (such as accountable care organizations) from the current SGR target but holding them accountable for other targets, and using penalties for physicians who are outliers in terms of resource use. MedPAC currently has two contractors working on projects to better determine the valuation of providers' time and resource use. More information will be available at the next commission meeting, Ms. Boccuti said. Every year since 2002, Medicare has failed to meet the SGR targets, causing physician pay, by law, to be reduced. However, Congress has routinely stepped in to legislate a way to avoid those cuts. C the avoided cuts are becoming a cumulative and growing debt bn the federal ledger. The White House, in its fiscal 2012 budget proposal, is proposing to reduce that debt over the next 10 years, at a cost of $370 billion. But the administration has figured out how to pay for that fix only for the first 2 years. The reality is that there's a declining pool of Medicare-specific offsets – required by law – to pay for fixing the SGR, Glenn Hackbarth, MedPAC chairman, said at the meeting. “We're in a deteriorating situation here; we're spiraling down,” said Mr. Hackbarth. “This isn't going to get better; it's going to get worse.” Mr. Hackbarth said that he envisions a future where lawmakers will have to take money from education or roads or some other nonhealth area of the budget to pay for the Medicare fix. “And that bothers me,” he said. The SGR-based uncertainty facing practitioners is undermining their confidence in Medicare and leading some to stop seeing beneficiaries, Mr. Hackbarth noted. He said that the time might be right to work out a “quid pro quo” with practitioners: an end to the yearly exercise to avert the SGR cuts in exchange for a payment system that has volume constraints and rewards efficiency and improved quality, or, alternatively penalizes those who fail to meet such targets. Alicia Ault is an associate editor with Elsevier Global Medical News.

Medicare Physician Payment Systems: Impact of 2011 Schedule on Interventional Pain Management

Physicians in the United States have been affected by significant changes in the patterns of medical practice evolving over the last several decades. The recently passed affordable health care law, termed the Patient Protection and Affordable Care Act of 2010 (the ACA, for short) affects physicians more than any other law. Physician services are an integral part of health care. Physicians are paid in the United States for their personal services. This payment also includes the overhead expenses for maintaining an office and providing services. The payment system is highly variable in the private insurance market; however, governmental systems have a formula-based payment, mostly based on the Medicare payment system. Physician services are billed under Part B. Since the inception of the Medicare program in 1965, several methods have been used to determine the amounts paid to physicians for each covered service. Initially, the payment systems compensated physicians on the basis of their charges. In 1975, just over 10 years after the inception of the Medicare program, payments changed so as not to exceed the increase in the Medical Economic Index (MEI). Nevertheless, the policy failed to curb increases in costs, leading to the determination of a yearly change in fees by legislation from 1984 to 1991. In 1992, the fee schedule essentially replaced the prior payment system that was based on the physician’s charges, which also failed to live up to expectations for operational success. Then, in 1998, the sustainable growth rate (SGR) system was introduced. In 2009, multiple attempts were made by Congress to repeal the formula – rather unsuccessfully. Consequently, the SGR formula continues to hamper physician payments. The mechanism of the SGR includes 3 components that are incorporated into a statutory formula: expenditure targets, growth rate period, and annual adjustments of payment rates for physician services. Further, the relative value of a physician fee schedule is based on 3 components: physician work, practice expense (PE), and malpractice expense that are used to determine a value ranking for each service to which it is applied. On average, the work component represents 53.5% of a service’s relative value, the fee component represents 43.6%, and the malpractice component represents 3.9%. The final schedule for physician payment was issued on November 24, 2010. This was based on a total cut of 30.8% with 24.9% of the cut attributed to SGR. However, as usual, with patchwork efficiency, Congress passed a one-year extension of the 0% update, effective through December 2011. Consequently, CMS issued an emergency update of the 2011 Medicare fee schedule, with multiple revisions, resulting in a reduction of the conversion factor of $36.8729 from December 2010 to $33.9764 for 2011. Key words: Health policy, physician payment policy, physician fee schedule, Medicare, sustained growth rate formula, interventional pain management, regulatory reform

Congress Passes, President Signs 1-Year Pay Fix for Doctors

Physicians will not face a scheduled 25% pay cut under the Medicare Physician Fee Schedule in 2011, thanks to last-minute action by Congress and the president.On Dec. 15, President Obama signed a 1-year pay fix into law. The law will eliminate the scheduled deep fee-schedule cut and instead keep Medicare physician fees at their current rate throughout 2011.The fee fix will be paid for by small changes to the Affordable Care Act., such as a change in the formula for payments of tax credits to some people for purchasing health insurance.Nancy-Ann DeParle, director of the White House Office of Health Reform, said that while signing the 1-year pay fix into law was important, the president favors a permanent solution to the Sustainable Growth Rate formula. “We all agree that this formula needs to be changed. Now's the time to get it done usMs. DeParle wrote in a blog post on Dec. 15.Like the president, AMDA, the American Medical Association, and other medical organizations are also pushing Congress for a long-term solution, as opposed to the short-term approach Congress took throughout 2010. Physicians will not face a scheduled 25% pay cut under the Medicare Physician Fee Schedule in 2011, thanks to last-minute action by Congress and the president. On Dec. 15, President Obama signed a 1-year pay fix into law. The law will eliminate the scheduled deep fee-schedule cut and instead keep Medicare physician fees at their current rate throughout 2011. The fee fix will be paid for by small changes to the Affordable Care Act., such as a change in the formula for payments of tax credits to some people for purchasing health insurance. Nancy-Ann DeParle, director of the White House Office of Health Reform, said that while signing the 1-year pay fix into law was important, the president favors a permanent solution to the Sustainable Growth Rate formula. “We all agree that this formula needs to be changed. Now's the time to get it done usMs. DeParle wrote in a blog post on Dec. 15. Like the president, AMDA, the American Medical Association, and other medical organizations are also pushing Congress for a long-term solution, as opposed to the short-term approach Congress took throughout 2010.

Rapidly Evolving Physician-Payment Policy — More Than the SGR

Since 2002, the physician-payment policy that has been closest to home for practicing physicians has involved repeated down-to-the-wire congressional interventions to avert large Medicare payment rate cuts specified by the sustainable growth rate (SGR) formula. Less visible, but potentially as important or more important over the longer term, has been a series of steps to revamp the resource-based relative-value scale (RBRVS) underpinning the Medicare Physician Fee Schedule (MPFS), with the goal of more accurately reflecting the relative costs of providing different physician services. The recently enacted health care reform law, known as the Patient Protection and Affordable Care Act (ACA), . . .

Short-Term SGR Fix Passed

The House of Representatives voted Nov. 29 to approve a 1-month extension of the current Medicare physician fee schedule, following the Senate and avoiding until Jan. 1 the 23% statutory reduction that was due Dec. 1. However, unless Congress and President Obama take additional action before the Christmas recess, physicians face a 25% cut in fees under Medicare's Sustainable Growth Rate (SGR) formula. The Physician Payment and Therapy Relief Act of 2010 was introduced in the Senate by Finance Committee Chairman Max Baucus (D-Mont.) and ranking minority member Chuck Grassley (R-Iowa). The relief legislation was originally introduced in the House by Rep. Sander Levin (D-Mich.). The estimated cost for the 1-month extension is $1 billion. The Senate legislation pays for that by using savings from a new Centers for Medicare & Medicaid Services policy that reduces Medicare payments for multiple therapies provided to a patient in 1 day. With dozens of other medical organizations, AMDA has urged Congress to make a 13-month physician pay fix a top priority during its lame-duck session. In a letter, the group told Congress, “A statutory update that lasts at least through the end of 2011 will provide time for Congress and the physician community to develop a long term solution to ensure that seniors can count on finding physicians to care for them, and that physicians will not view Medicare as a threat to the viability of their practice.” Alicia Ault is an associate editor with Elsevier Global Medical News.

The Impact of the Medicare Sustainable Growth Rate Formula on Reconstructive Plastic Surgery

The Impact of the Medicare Sustainable Growth Rate Formula on Reconstructive Plastic Surgery

Medicare Assignment and Participation: Excerpts From Practical Tips for the Oncology Practice.

The Medicare Physician Fee Schedule has presented significant challenges to oncologists this year, with a series of temporary patches to the sustainable growth rate (SGR) formula resulting in uncertainly about payment rates and delays in Medicare claims processing. In response to this situation, many physicians, including oncologists, have begun to ask questions about the Medicare program and specifically about participation and assignment of claims. This article, excerpted from ASCO's Practical Tips for the Oncology Practice, reviews definitions and requirements of the Medicare program for assignment, participation, and private contracts.1pp4-5,71-73