Latest 'doc fix' in Medicare reimbursement will increase payments 2%

On June 24, Congress approved stand-alone legislation to postpone for 6 months (retroactive to June 1) the scheduled 21.3% cut to physicians' Medicare reimbursements and provide a 2.2% payment increase through November. But House Democratic leaders delayed action on that bill, waiting for the Senate to act on House-approved "extenders" legislation that also included the "doc fix."

That measure, which includes aid to states for Medicaid spending, unemployment benefits, and tax breaks, was being held up by Republicans who were concerned about its cost.

Just before the Memorial Day holiday, the House of Representatives approved legislation that would delay through December 2011 the massive cut that became effective June 1. The measure was scaled back from earlier proposals that would have essentially frozen rates over the next 4 or 5 years respectively. It also would have provided a 2.2% increase for the rest of this year and another 1% boost for 2011.

But the Senate failed to approve that measure, leading to the creation of the 6-month fix.

Because Congress failed to meet the June 1 deadline, the Centers for Medicare & Medicaid Services notified physicians they would delay processing claims for 2 weeks. But with the passing of the June 18 deadline, according to the American Medical Association, claims submitted for services provided in June were being processed under the reduced payment rate on a rolling, first in/first out basis. Claims submitted earliest were being paid at the reduced rate, while newer claims were being held for a 10-day period until the problem is finally resolved.

The proposed extension until December 2011, combined with the modest increases contained in the measure, would have come at a cost of $22 billion, resulting in opposition from Republicans and some Blue Dog Democrats. But the troublesome sustainable growth rate (SGR) formula used to calculate payments would continue in succeeding years, setting doctors up for a 33% cut in 2012, according to the Congressional Budget Office.

The earlier 5-year proposal drew opposition from the American Medical Association as well as numerous specialty and subspecialty groups, including AUA, which argued that it did nothing to fix the SGR, which is at the root of the problem. Of course, the latest proposals also fail to address the SGR.

"Our organizations are strongly opposed to any proposal that would freeze Medicare payment rates at current levels for the next 5 years," declared a May 11 letter sent to House Speaker Nancy Pelosi (D-CA) by the group of 25 specialty groups.

"The uncertainty of possible cuts, along with stagnant payments that have failed to keep pace with the rising costs of running a medical practice, undermine the ability of physicians to plan for the future, to provide for their employees, and to make technological investments that could better help them serve their patients," the letter said.

AUA urges EHR regulation changes

Meanwhile, AUA was part of a coalition of 54 medical groups that have urged the Department of Health and Human Services (HHS) to modify its proposed rule implementing new electronic health record incentive programs for Medicare and Medicaid practitioners.

Congress included the incentives in the American Recovery and Reinvestment Act of 2009 (ARRA) to encourage the adoption and use of EHRs and infuse stimulus dollars into the health care sector. However, in a May 3 letter to HHS Secretary Kathleen Sebelius, the medical groups said there were a number of common concerns about how the program will be implemented under the proposed regulation.

"The proposed rule takes an 'all-or-nothing' approach, where failure to meet any one of the requirements means the provider will not receive an incentive payment," the letter pointed out. "This approach does not acknowledge that providers have made enormous progress in creating and maintaining EHRs to improve patient care and safety. The inflexible sets of 23 and 25 requirements would result in very few providers being able to meet the all-or-nothing approach, despite having adopted numerous EHR components."

The organizations said, in fact, that the requirements "are asking for too much, too soon," by including advanced functions such as computerized provider order entry, clinical decision support, and electronic medication reconciliation, which generally occur at the end of a multi-year transition to EHRs.

If the regulations are finalized, the likely result is that even providers with advanced health information systems would not meet the requirements in fiscal year 2011, while physicians in small practices and rural areas would take even longer "because they have further to go in their implementation of EHRs."

The groups urged CMS to require providers to implement a percentage or limited number of objectives and offer greater flexibility in choosing which requirements to implement. They also urged CMS to extend the transition time to 2017, consistent with the ARRA.

Under the law, providers can receive incentive payments through 2016, and while penalties for those who do not meet the criteria begin in 2015, they are phased in over 3 years, with the maximum penalty imposed in 2017.

In announcing the proposed rule on Dec. 30, 2009, CMS said incentive payments might begin as early as October 2010 to eligible hospitals and to other eligible providers in January 2011. It said it hoped to issue its final rule before the end of 2010.

Bob Gatty, a former congressional aide, covers news from Washingtonfor Urology Times.