Practicing Physicians Advisory Council (PPAC) UpdateDate: February 26, 2004 I would like to share with you my report on the February 23 and 24, 2004 meeting of the Practicing Physicians Advisory Council (PPAC), a 15 physician committee whose function is to advise the Secretary of the Health and Human Services Department on the effects of regulations on physician practice. Previously, the Director of the Council on Medicare and Medicaid Services (CMS) was Mr. Tom Scully and the PPAC staff was Mr. Tom Grissom. Currently, Thomas Gustafson, PhD, is acting Director and staffed the PPAC meeting. We were told that Dr. Mark McClellan from the FDA will be appointed to be the Director of CMS. Dr. Ken Simon has replaced Dr. Paul Rudolph as Executive Director of PPAC. PPAC RECOMMENDATIONS FROM THE NOVERMBER 2003 MEETING End Stage Renal Disease CMS adopted the recommendation that CMS create a code for preoperative venous mapping for dialysis access placement. Our recommendation that CMS develop a demonstration project looking at the physician incentives related to the treatment of ESRD was under review. Given the Medicare Prescription Drug Improvement and Modernization Act (MMA), CMS was unsure whether or not this quality improvement project could be addressed. Power Operated Vehicles The power operated vehicle (POV) agenda item had resulted in a recommendation from PPAC that Medicare physicians receive from CMS an annual report of durable medical equipment purchases made under their UPIN numbers. The recommendation was adopted with modifications. CMS plans to develop with the DMERC a list of the physician outliers. CMS intended this as a way to look for over-utilization of power operated vehicles by investigation of the outliers, however, PPAC's goal was to enable physicians to help CMS determine fraudulent use of the physician UPIN numbers. PPAC also had requested that CMS develop a brochure and guidelines for Medicare physicians on prescription of power operated vehicles. The brochure was made available but was felt to be too lengthy and not helpful to physicians. PPAC recommended this time that the brochure be revamped to facilitate physician understanding of criteria for prescription of power operated wheelchairs, and that a handout for patients be developed to facilitate patient understanding. CMS also wanted to limit prescribing authority for POVs to a limited number of specialties which did not include primary care, but PPAC recommended that all physicians caring for a disabled patient be given the authority to prescribe along the accepted guidelines. Medicare Carriers In November discussion was held as to the general inaccuracy and unreliability of information obtained by physicians from carriers. PPAC recommended that CMS do a better job of contractor evaluations by relying on expert teams to conduct performance reviews and assess the accuracy of physician communications. CMS is planning on developing a way to look at claims outliers and provide an educational implementation approach for proper payment information that will be shared with PPAC. OIG Investigations In response to the large number of Office of the Inspector General (OIG) evaluations with a small number of convictions, PPAC also recommended that CMS not use intimidation by the OIG as a method to increase the number of successful prosecutions of physicians for improper payment. We also suggested that a physician's participation in the OIG program of voluntary performance audits not be used to decide to perform a Medicare audit. However, CMS responded they must submit to the OIG any information about improper payments no mater how it was obtained, and also that the OIG work plan is not controlled by CMS. NEW BUSINESS Medicare Prescription Drug Improvement and modernization Act (MMA) The Medicare Prescription Drug Improvement and Modernization Act (MMA) requires significant regulatory development by CMS. The current worksheet for this totals 13 pages and includes physician fee schedule changes, the incident-to drug changes, and multiple new services. New Medicare Services Under MMA The MMA includes access to multiple new preventive services such as Welcome to Medicare exams, screening blood tests for heart disease and diabetes, as well as the existing ability to offer patients other preventive services such as mammography, colonoscopy for cancer screening, other cancer screenings and vaccinations. PPAC recommended that CMS raise the SGR target to account for all direct and indirect costs of all provisions in the MMA that will increase the amount of services provided by physicians, including provisions related to the Prescription Drug Card as well as the new benefit services. PPAC also recommended that the physician community be involved (including PPAC, the RUC and the CPT panel) in the process of developing codes and related relative values for these Medicare preventative services mandated by the MMA. Due to input from Dr. Jerry Rogan I was able to point out that the cost of the Welcome to Medicare examination would be approximately 250 million dollars per year and would cause physician service expense to hit the SGR target and therefore lower the conversion factor unless the target was adjusted for these new services. Others pointed out that there may not be adequate numbers of primary care doctors to provide this service in the first six months of a beneficiary's enrollment period. The Prescription Drug Benefit was also discussed at length. PPAC requested that CMS provide assurance that CMS does not intend to include in the SGR the cost of prescription drugs included in the new MMA Prescription Drug Benefit. Conversion Factor Change The MMA required that the conversion factor for Medicare for 2004 and 2005 be an increase of 1.5% rather than a decrease of 4.5%. However, PPAC expressed concern that in the absence of developing a new payment formula to replace the SGR, or in the absence of more congressional intervention, a significant drop in the conversion factor will occur in 2006. Regulation Relief Provisions There are also regulatory relief provisions in the MMA, and PPAC requested that CMS provide at the next meeting the time line for implementation of these various regulatory relief provisions. Medicare Economic Index The Medicare Economic Index is the inflationary factor which increases the SGR target and was developed in the early 1970's. The practice expense associated with the regulatory requirements, such as fraud and abuse, billing errors, quality management and improvement, patient safety, and provision of translators for limited English proficiency patients have increased dramatically. CMS plans to revise the weights given to factors in the MEI to reflect these changes. PPAC recommended that CMS include in the MEI all factors that more accurately account for the costs of practicing medicine, including but not limited to staffing changes, compliance with government imposed regulatory requirements relating to such matters as mentioned above and any other costs incurred by physician practices which were not included in the MEI when it was developed in 1973. Work Geographic Price Cost Indicators Work GPCI's were set at a floor of 1.0 for 2004 to 2006. Prescription Drugs and Physician Administered Drugs A great deal of attention was paid to the proposals for the Prescription Drug Cards and future drug benefit plans. Once again the issue of the provision of drugs incident-to physician services in physician offices received a great deal of discussion. It was noted that the increase in practice expense of incident-to drugs are exempt from the budget neutrality provisions and therefore the increase in those codes will not adversely affect the reimbursement of any other physician. The method of payment for chemotherapy and other drugs delivered in the physician office has been changed by the MMA from the mechanism originally established by HCFA many years ago. Previously the administration of chemotherapy and the associated services (such as hydration) were expected to be covered by the drug mark-up inherent in the Average Wholesale Price (AWP) methodology. For 2004 the administrative fees have been increased sufficiently to a level covering most of the costs of delivering the services and the drugs fixed at 80-85% of the April 2003 AWP. For 2005 drugs will be paid at average sales price plus 6% and the reimbursement for administration will decrease. Average sales price has yet to be defined and PPAC recommended that CMS ensure that the physician community is provided early notification of the average sales price for all impacted drugs as well as an opportunity to comment on the appropriateness of average sales price. CMS feels that the administration fees are adequate to cover the costs of drug delivery in a physician office, but oncologists, urologists and other specialties are concerned that average selling price is not well defined, will not cover drug acquisition much less administration and associated services, and it will be necessary for Medicare patients to receive infusions in the outpatient hospital setting. Since 80% of oncology infusions are currently delivered in physician's offices, and since many hospitals have expressed concerns about being able to accommodate the increased volume of patients, PPAC recommended that CMS continue to study the effect of the new regulations to ensure that beneficiaries will continue to have access to infusion and chemotherapy services with a comparison of costs and patient satisfaction. Currently the major plan for evaluation of access to infusion services will be the number of beneficiaries who call and complain to the 1-800 Medicare number. A planned MEDPAC study is not due until January 2006. PPAC requested that CMS report on the effect of its current policy of including the physician administration of drugs in the calculation of the SGR and how the SGR would be affected if these drugs were omitted from the calculation. PPAC requested that CMS use its discretionary authority under the MMA to remove drugs from the SGR calculation. Another concern of mine is that since drugs currently are in the SGR, if there is a shift to the outpatient hospital setting infusion clinics (included in Part B Medicare), it may be more expensive and may increase the effect of drugs on hitting the SGR target. (Disclaimer, as an oncologist I have a personal interest in the outcome of this evaluation as I am personally very concerned about where patients I currently treat will be able to obtain their care.) E & M Coding The new guidelines for E&M coding were discussed by Dr. Doug Wood, a retiring member of PPAC and Chair of the CPT Evaluation and Management Work Group. Estimating physician work and finding a mechanism to code for this across specialties is a significant task, especially when one considers the charge of the OIG to find examples of upcoding and recoup money and damages. A system must be able to be used fairly by physicians, both to document the value of their work, but also to be useful to the physician in defending their billing practices from fraud and abuse allegations. The current system counts bullets, rewards clerical skills, clutters charts with unnecessary data, interferes with communication of physician thought processes and does not reflect the changes in medical practice. The new system relies on clinical examples developed by the specialty societies and recognizes that as new physicians enter the system there will be a learning curve for coding resulting in a baseline error rate. The older system is not reproducible and has a low concordance of agreement by separate coders which implies that some of the "error" is really just a difference of opinion of the coders. However, the testing of a new system will require voluntary participation by physicians willing to attempt coding by the new mechanism, input from carrier medical directors, and input from the Program Integrity Department. If a pilot project is involved, PPAC felt it would be important that CMS's Program Integrity staff be actively engaged in the process of establishing CPT guidelines working with the CPT Evaluation and Management Work Group. PPAC also requested that any pilot project for assessing new evaluation and management guidelines be designed to hold voluntary participants harmless during the course of the project so that variations in coding are not used as the basis for further OIG investigations. Chronic Care Improvement Program The Chronic Care Improvement Program of the MMA was discussed. CMS plans pilot projects for disease management programs. It is my personal opinion that the disease management programs are not the only option for improving medical care and have the disadvantage of taking patient care away from the treating physicians and transferring it to a "phone triage nurse" who will use the local emergency departments as a backup. I also suggested that a pilot project be developed which used the local treating physicians to do disease management and look for innovative ways to pay that physician for management services. AAFP provided testimony similar to this, but PPAC felt it was premature to suggest a pilot program until we hear more about how the pilot program development process for CMS works. We also requested that AAFP examine the existing pilot projects to see if any of them fit this need. We are to get an update of this at the next meeting. End Stage Renal Disease ESRD coding and quality improvement projects were also discussed. PPAC recommended that CMS continue to work with Renal Physicians Association and other pertinent groups to continually assess the impact of these coding changes on access to care in rural dialysis clinics and home dialysis programs. Physician Re-enrollment CMS is not happy with the provider enrollment backlog problems under the current Provider Enrollment and Chain Ownership System (PECOS). CMS is taking actions to avoid delays. It is definitely CMS's intention that no delay in the enrollment process will occur, but should a delay occur due to problems with PECOS, PPAC recommended that CMS institute a contingency plan to ensure the payment of claims to providers whose enrollment was delayed. Physicians Regulatory Issues Team (PRIT) The PRIT web site is regularly updated by Dr. Bill Rogers and shows the multiple issues currently being addressed. The rules on seclusion and restraint, verbal orders and others are updated on this web site. PPAC requested that we get a link to the Secretary's Advisory Committee on Regulatory Reform so that we can see which issues of new regulations are likely to affect physicians and which issues we would wish to have discussed by Dr. Rogers or brought to the PPAC. It would also be helpful for CMS and physicians in general to evaluate these regulations as to their effect on physicians so that important issues are not overlooked. For example, I would have overlooked the importance of an expense of the powered wheelchair issue had that not been brought to our attention by CMS. Professional Liability Insurance The Professional Liability Insurance effect on the SGR formula was discussed at length. PLI affects the physician fees in two ways, one by increasing the weight of the malpractice GPCI which was made budget neutral by a decrease in the physician work and practice expense GPCIs, and secondly by an increase in the MEI which raises the SGR target. The rebasing and revision of the MEI attempts to control for rising PLI rates but due to the difficulty of data collection it must always lag behind the current conditions. Therefore a rapid escalation in any state of PLI rates causes an adverse effect on all physicians in the reimbursement formula. We are all in this together. The American College of Radiology representatives also pointed out that the increase in the malpractice GPCI was directed to the technical side rather than to the professional side where the risk of liability occurs. PPAC therefore recommended that CMS evaluate the impact of shifting the professional liability adjustment of the RVU to more fairly recognize the physician burden of increased risk and psychological stress in the physician work component of the service. We also requested that no negative adjustments be made to the physician work component and the entire adjustment required by budget neutrality be made to the practice expense component.
Thank you for your time in reading this. Sincerely, Barbara L. McAneny, MD, FACP
Official CMS documents for this PPAC meeting: Zip Download |
