Medicare Meltdown: Congress Seeks Payment Formula Fix

The Senate Finance health reform bill also would establish a 10 percent bonus for certain E&M codes for primary care physicians and rural general surgeons that would be funded partly by reducing pay to specialists. On Nov. 4, 20 specialty societies, including the AAO-HNS, sent a letter to Reid outlining their objection to that provision. The letter also voices the groups’ opposition to provisions that would create an independent Medicare commission whose payment recommendations could become law without congressional action, make participation in the Physician Quality Reporting Initiative (PQRI) mandatory, and reduce payment to doctors who are found to have the highest resource utilization.

Although the final CMS Medicare physician payment rule included the bad news of the pending payment cut, it also carried some good news; the agency removed physician-administered drugs from the calculation of the current payment formula. Physicians have no control over the cost of these drugs but get penalized under the SGR as the medications get more expensive, medical organizations argue. The AMA notes that spending on physician-administered drugs has grown at much higher rates than spending for all other physician services. Removal of these drugs from the payment formula will decrease the difference between target and actual physician spending, and thus improve physicians’ reimbursement outlook over the long term, CMS stated. “While this decision will not affect payments for services during calendar year 2010, CMS projects it will have a positive effect on future payment updates,” said Jonathan Blum, director of the agency’s Center for Medicare Management.

The final rule also includes changes to PQRI, a voluntary program under which physicians receive Medicare incentive payments for successfully reporting data on quality measures. The 2010 bonus, which is equal to 2 percent of estimated total allowed charges for covered professional services under Medicare Part B, has been extended to physician groups. Previously, only individual health care providers could report but under the new rule practices with 200 or more eligible professionals would be able to take advantage of the reporting option. This is good news for otolaryngologists; the AAO-HNS notes that the median otolaryngology practice is three physicians. ENTtoday

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