New Medicare Economic Index Changes

• The Medicare Economic Index (MEI) is used in conjunction with the SGR formula to update the physician fee schedule. For 2011, CMS will "rebase" the MEI, i.e. update the base year to 2006 (the most recent year with complete information) to reflect changes in physician expenses and "revise" some of the components or categories that comprise the MEI.

• The impact of the proposed MEI changes varies by specialty. Data from the PCPI survey (that ACEP supported and participated in) showed that practice expense (PE) and medical liability costs grew at a faster rate than physician work. Therefore, CMS increased the PE RVUs used in the MEI to 47.44%, malpractice RVUs from 3 to 4%, and reduced work from 52.46%-48.27% of total RVUs.
• Because these changes must be budget neutral in overall impact, CMS proposes to reduce the Conversion Factor by 7.9%, rather than reduce work values. Therefore, the proposed payment levels for high practice expense specialties will increase, while payment to low practice cost specialties, such as emergency medicine may decrease slightly.
  

Primary Care Incentive Program: The health reform law passed in March 2010 created a 10% bonus payment for primary care services performed by specific specialties of family practice, internal medicine, pediatrics, or geriatrics (but not emergency medicine). General surgeons are also eligible for a 10% bonus if they practice in designated shortage areas. Bonus funds are not budget neutral so money will not be taken from other specialties to pay for the bonuses.

Physician Quality Reporting Initiative: CMS is proposing to add 20 new measures to the physician quality reporting initiative (PQRI) and will make 12 additional measures reportable through electronic health records. A list of measures will be provided in the web update. The new law extends the PQRI program through 2014.  Payments to eligible professionals will equal 1% of estimated total allowed fee schedule services for 2011 and .05% for 2012-2014.  In 2015 the payment is replaced by a penalty of 1.5% for non-reporting.  This increases to 2% for 2016 and thereafter.

Imaging: Last year, CMS increased amount of time that complex diagnostic imaging machines (valued at > $1m) are used in practices from 50% of the time to 90% using a 4-year phase-in. The Affordable Care Act changed the amount to 75%. This will affect the technical component only but will reduce practice expenses for many physicians who perform complex imaging services in their offices. The policy will not be phased in and is not budget neutral, meaning that savings will not be redistributed within the fee schedule.

Senate Back to Work Today

The Senate is back to work today after a two week break.  There is a scheduled cloture vote that would limit debate on a bill implementing a 30-day freeze to a 21% Medicare cut for doctors.  The 21% reimbursement cut for physicians technically took effect April 1, 2010, but CMS has requested that physicians hold billing for two weeks in anticipation of Senate action today.

Republicans and Democrats reached a stalemate on the bill prior to the spring recess, largely based on disagreement about whether the $9.2 billion cost of the bill should be offset.  The success of a cloture vote today would allow lawmakers another 20 days to consider a longer extension or a permanent solution to the scheduled reductions.  In addition, the more than 200,000 people who lost their jobless benefits on April 5, including subsidies to pay for health insurance through COBRA, would have an opportunity to apply for a one month extension of those benefits.    

Democratic leaders have pledged to work to make an extension retroactive to April 1.  The American College of Emergency Physicians is working with lawmakers to develop a permanent fix to the situation that leaves emergency physicians facing large Medicare cuts yearly based on a formula that is flawed.

Physicians Face 21% Payment Cut at Midnight

The fight over the flawed SGR (Sustainable Growth Rate) formula is familiar to physicians. Every year the scheduled cut in fees increases, and every year physicians fight for and eventually obtain a postponement. Friday, the House passed HR 4691, legislation that extends a number of expiring programs for 30 days, including current Medicare physician payment rates, which would once again postpone the 21% cut that was scheduled to take effect this year. The Senate attempted unsuccessfully on several occasions Friday night and Saturday morning to pass the same bill by unanimous consent, but objections were raised by Senator Jim Bunning (R-KY), on the basis that $10 billion cost of the program extensions was not offset . The Senate has adjourned for the weekend, so the 21% Medicare physician payment cut will be effective on Monday, March 1.

The Centers for Medicare and Medicaid Services (CMS) are notifying their contractors to hold Medicare physician claims for 10 business days, effective Monday. The agency will also be sending out a similar message on its various list serves this afternoon to physicians, and contractors will be instructed to disseminate this information as well.

Senate Democratic leaders likely will need to use the cloture process requiring 60 votes to overcome Sen. Bunning's objections. Completing those procedural steps will push final action on the measure into next week.

Please Help Us Fix the SGR

Starting this week, the Senate will take a series of critical votes on a bill, the Medicare Physicians Fairness Act of 2009 (S.1776), to abolish the flawed formula used to determine Medicare reimbursement rates. This bill is critically important to all physicians, but especially to emergency physicians who will undoubtedly see a significant increase in Medicare patients if the payment cuts are enacted.

Under the current system, physicians are scheduled to receive drastic cuts to Medicare payments starting next year. Congress understands that the scheduled cuts would devastate access to care for seniors so each year they "patch" the system by voting at the last minute to cancel the funding cut. However, even though the cut is not enacted, the total accumulated debt for physician reimbursement under Medicare continues to grow. Picture it as a credit card with a huge balance and a high interest rate. Congress "forgives" a payment on the debt each year, but that amount is added to the balance, and interest continues to add up. Without action by Congress, physicians are scheduled to take a 21 percent reduction in reimbursement for Medicare patients next year, with cuts totaling 40 percent in future years.

Having health insurance coverage is not the same thing as having access to medical care. All seniors over age 65 are entitled to insurance under the Medicare program. Increasingly, however, primary care physicians and other specialists are refusing to take new Medicare
patients because of low reimbursement rates. It's not that those doctors lack compassion, it's that many lose money on Medicare patients and a 40 percent cut in payments would make it impossible for them to continue to treat those individuals.

With an aging population, emergency departments already anticipate an increased volume of seniors needing care. If, however, Congress does not fix the flawed Medicare formula, that increase could be catastrophic. Seniors unable to find doctors accepting Medicare may have no choice but to seek care in emergency departments, which the Institute of Medicine already calls "dangerously overcrowded."

Passage of this bill would help to prevent more crowding in emergency departments, provide a reasonable level of compensation to emergency physicians, and help attract on-call specialists. This is a non-partisan issue. Republicans and Democrats claim to care equally about ensuring
access to care for seniors. If our elected representatives are sincere in these views, they will take a principled stand on this issue and support S.1776 now.

You can help assure passage of this critical legislation. Contact your two U.S. Senators now and tell them to support S. 1776. Here's how:

* Call 1-800-833-6354 to be automatically connected to your two Senators. Urge them to support all procedural motions and final passage of S.1776.

* Go to ACEP's Advocacy Center: www.acep.org and send an e-mail urging your Senators to support S. 1776.