The Obama administration's proposed rule on the 2010 Medicare Physician Fee Schedule addresses increased pay for primary care physicians, decreased pay for specialists, and a way to get rid of the sustainable growth rate formula.
Physicians' organizations have sought repeal of the sustainable growth rate (SGR)—the statutory formula used to set payment rates under Medicare—saying it does not reflect the true cost of care.
One criticism is that the formula counts the price of physician-administered drugs as a physician service. Since the SGR is designed to cut payments when health care expenditures rise above a certain target, the inclusion of drugs has caused physicians to exceed those targets more rapidly.
The removal of physician-administered drugs from the SGR should reduce the number of years that physicians see pay cuts, according to the Centers for Medicare and Medicaid Services. And the American Medical Association is betting that the change will make it less expensive for Congress to repeal the SGR, which would also benefit physicians.
The change is one of several included in the 2010 Medicare Physician Fee Schedule proposed rule, published in the Federal Register on July 13. A final rule is expected in November.
Even if enacted, the proposal will not stop the 21.5% pay cut, effective Jan. 1, 2010, which would affect physicians across the board. The rest of the fee schedule proposal affects physicians differently, depending on their specialty. For example, the proposed rule includes plans to eliminate the use of consultation codes, increase payments for evaluation and management (E&M) services, and update the practice expense component of physician fees based on new survey data.
Under the proposal, the CMS would eliminate the use of all consultation codes except telehealth codes starting Jan. 1. “We believe the rationale for a different payment for a consultation service is no longer supported because documentation requirements are now similar across all E&M services,” the CMS wrote in the proposed rule.
The CMS estimates that the combination of the various proposals would mean a 6%-8% payment increase for primary care physicians, excluding the impact of the 21.5% cut.
Conversely, subspecialists would lose out under the schedule proposal, experiencing either cuts or only small increases.
The combined proposals will result in an average 11% cut in Medicare payments for cardiologists, in part due to the elimination of consultation codes, but also because of practice expense changes based on new survey data. The American College of Cardiology criticized the CMS for proposing significant payment cuts based on a small amount of survey data.
The cuts “are based on the incorporation of a few esoteric pieces of data into a complex formula,” Dr. Alfred Bove, ACC president, said in a statement. “The focus on this formula completely ignores the very important issues of access that are certain to be created by these huge slashes in payment.”