SGR fix may also help preserve Stark exception

Washington-It appears that Congress is finally determined to provide a permanent solution to the annual Medicare fee payment crisis, and there is a possibility that the process also could reduce pressure to end an exception to the Stark self-referral law upon which many urologists have come to rely.

On Oct. 31, the House Ways and Means Committee and the Senate Finance Committee released a bipartisan discussion draft outline of legislation intended to permanently fix the broken Medicare sustainable growth rate (SGR) formula.

Coming in an otherwise contentious period of partisan discord on Capitol Hill, the proposal would freeze current physician payment levels through 2023 and then provide annual 2% payment increases to those who participate in such payment models as accountable care organizations and patient-centered medical homes. Other providers would receive a 1% increase.

Without congressional action on at least a temporary solution, Medicare physicians face a 24.4% payment cut effective Jan. 1, the result of annual temporary fixes enacted by Congress each year for the past decade to avert SGR-required cuts. The proposal does not include measures to pay for repealing the SGR, estimated at about $139 billion over 10 years.

‘Appropriate use’ self-referral criteria

The Ways and Means and Senate Finance committees’ proposal also contains potential good news for urologists who provide in-office imaging services. Rather than suggesting an end to the in-office ancillary services exception to the Stark self-referral law upon which many urology groups rely, the proposal instead would require professionals to consult “appropriate use” criteria for advanced imaging and electrocardiogram services.

The discussion draft states the following:

“In consultation with stakeholders, the Secretary [of Health & Human Services] would specify appropriate use criteria from among those developed or endorsed by national professional medical specialty societies or other entities. The Secretary would identify mechanisms, such as clinical decision support (CDS) tools, that could be used by ordering professionals to consult with appropriate use criteria and communicate to the Secretary that such consultation occurred. Payment would not be made for the advanced imaging or electrocardiogram service if consultation with appropriate use criteria did not occur. Prior authorization would apply to outlier professionals whose ordering is inconsistent as compared to their peers. Based on the experience with this program, the Secretary could expand the use of appropriate use criteria to other services.”

If Congress enacts this approach, it could sidetrack legislative efforts by lawmakers who advocate ending the Stark exception, which they contend leads to overutilization of services and costs Medicare billions unnecessarily. President Obama’s proposed fiscal year 2013 budget estimates ending the exception would save $6.8 billion over 10 years.

“Self-referral is bad for health care, bad for the patient, and creates a perverse incentive,” declared Rep. Jackie Speier (D-CA) at an Oct. 23 news conference following the release of a study by Jean M. Mitchell, PhD, of Georgetown University, Washington (N Engl J Med 2013; 369:1629-37). Dr. Mitchell cited a 146% increase in intensity-modulated radiation therapy services for prostate cancer among urologists with an ownership interest in imaging equipment.

The study was financed by the American Society of Radiation Oncology, a strong backer of Speier’s Promoting Integrity in Medicare Act of 2013, which she introduced Aug. 1 with Rep. Jim McDermott (D-WA). The measure would eliminate the Stark exemption for radiology, radiation oncology, and physical therapy.

AUA: Mitchell study has ‘little traction’ on Hill

AUA Health Policy Chair David F. Penson, MD, said the Mitchell report “has serious methodologic flaws that limit its impact,” and added that it “appears that the report achieved little traction on the Hill.” Dr. Penson said the AUA would continue to monitor the situation carefully.

Dr. Penson said the AUA and other like-minded groups continue to “educate lawmakers on the value that in-office services can provide patients, including the provision of timely, coordinated care.”

It appears that this strategy may be effective, given the fact that the new proposal from Ways and Means and Senate Finance does not call for an end to the exception, but rather recommends the “appropriate use” approach to reduce unnecessary imaging.

Washington health care lobbyist Theresa C. Carnegie, JD, of the law firm Mintz Levin, has a long list of clients on both sides of the Stark exception issue. She told Urology Times she is advising clients who are investing in imaging technology to be aware of the effort by some in Congress to end the exception. But, she said, it appears unlikely that this will happen any time soon.

“I do think this is going to keep kicking around,” Carnegie predicted, noting that advocates of Speier’s bill could gain strength as reports such as Dr. Mitchell’s continue to emerge. “This isn’t going to go away, and I don’t think the issue is going to be resolved quickly.”

However, she added, “I don’t think this legislation will pass. We just need to make sure that those providers who utilize the exception are aware that this is out there, and they need to be prepared for what could happen.”UT

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