Practicing Physicians Advisory Council (PPAC) Update for March, 2005I am pleased to send you this update on the March 7, 2005 meeting of the Practicing Physicians Advisory Council (PPAC), a group of 15 physicians appointed to advise the Secretary of HHS on the effects of Medicare and Medicaid regulations on the practice of medicine. PHYSICIAN FEE SCHEDULE At the November PPAC meeting, we had again requested that the Secretary use his administrative authority to remove physician-administered drugs from the physician fee schedule retroactively to 1996. Calculations from the Centers for Medicare & Medicaid Services (CMS) show that removal of drugs without retroactive re-calculation of the sustainable growth rate formula (SGR) from its inception in 1996 would not be sufficient to avoid the 5% yearly decrease scheduled to begin in 2006. CMS' lawyers are debating whether or not they have the administrative authority to remove the drugs from the calculation, but have not reached a conclusion. We were somewhat surprised to learn that CMS has not been studying what will happen to Medicare if the proposed cuts occur and physicians no longer can afford to see Medicare patients, and that there has been no contingency planning. We heard testimony from one of the PPAC members who is a primary care physician serving in an inner city area with 73% of his practice being Medicare. He commented that he does not have the option to stop accepting Medicare patients, as he does not have enough non-Medicare patients to keep the practice viable. The 5% per year for 6 year decrease would simply close his practice, and leave the people he serves without access to care. PPAC again made the same recommendation to retrospectively remove the drugs from the SGR, and added the recommendation that CMS study what will happen to patient access if the projected cuts in the fee schedule from the SGR occur, and that CMS formulate a plan to keep physicians participating in Medicare. We had requested that CMS identify its sources for determining the update for the Professional Liability Relative Value Update (RVU), as we felt the data of 2001-2 did not reflect the rapid increases physicians have seen for 2004 and 2005. CMS would have preferred data from recent years, but the best data they could collect was from the 20 medical specialties that account for the majority of Medicare payments. The data was provided by the state departments of insurance for $1M/$3M claims made policies in all 50 states, DC and Puerto Rico. The departments of insurance did not have 2003 data. We had requested that CMS compare and contrast the factors in the Medicare Economic Index (MEI) and the Market Basket to explain that the market basket approach consistently results in an increase for hospitals, while the MEI, once it is modified by the SGR, results in the decreases we have been seeing. CMS' reply restated the laws, but it seemed to us that the laws reflect the era in which they were written, and do not account for the increased amount of technology and specialty services available in a physician's office, and the increasing competition of physicians and hospitals for the same personnel at the same salary structure. The 2006 Fee Schedule will be on our agenda for the August 2005 meeting. PHYSICIAN ENROLLMENT AND CHAIN OWNERSHIP SYSTEM (PECOS) CMS has worked diligently to eliminate the backlog of physician enrollment through the PECOS system. The number of physicians awaiting enrollment is under 11,000, and CMS intends to test new computerized systems to avoid future delays. PHYSICIAN ADMINISTERED DRUGS CMS has now implemented the system of paying for drugs delivered in a physician's office through Average Selling Price (ASP) as determined quarterly, and new codes, which are intended to more closely approximate the expenses incurred in delivering these drugs. Shortfalls in reimbursement will be partially compensated via a Demonstration Project which Medicare will use to collect data on symptom control in cancer patients. PPAC had requested that the Demonstration Project be expanded to future years, and to all methods of administering drugs, but CMS replied that it was premature to consider an expansion until the data from the original project is evaluated. In some instances, ASP as calculated by CMS reimburses below the amount for which physicians can obtain the drug, much less administer it, or afford the shrinkage, storage and other inventory costs. PPAC had requested that CMS institute a process to receive information from all specialties if they were unable to purchase the drugs at or below ASP, and help avoid the situation where prices are raised after ASP is determined and physicians cannot recoup the losses. CMS replied that it is only required to change ASP quarterly, and that physicians should rely on their specialty societies to find affordable drug supplies. CMS cannot print which companies provide drugs under the average of ASP, as that information is proprietary. We pointed out that specialty societies also do not have access to company pricing data, and that they cannot help individual practices make purchases. The General Accounting Office report on Physician Administered Drugs stated that CMS would find a way to work with physicians to find the lowest possible prices. PPAC recommended that CMS report to PPAC the proposed mechanisms to accomplish this. COMPETITIVE ACCESS PROGRAM CMS has just issued proposed rulemaking and is accepting comments until April 26th on the option for physicians to obtain drugs through a system of competitive bidding, known as the Competitive Access Program (CAP). This program sets up a series of vendors, hopefully more than one per state, and not in smaller arenas than statewide, who will provide chemotherapy to a physician's office to be administered. The vendor will then bill Medicare, and collect the 20% copay from the patient or secondary insurer. At first glance this seems an easy way out for physicians who cannot themselves obtain drugs for ASP+6%. However, a major concern remains that these large companies will not be as forgiving as physician offices in delivering expensive drugs for patients who do not have the ability to pay their 20%. CMS assured us that if the physician orders the drug, it will have to be delivered, but many oncologists remain skeptical. The problem of delivering the drug to the patient has been avoided, but it remains unclear what will happen if the drug arrives in a damaged vial, or the patient's disease now requires a new drug. Who then pays for the return shipping, and for the vial of unusable drug? If these costs are borne by the physician, without any margin to pay for it, and without the current direct relationship with the manufacturers to provide replacement drug, physicians may not be able to afford to give chemotherapy in the safer, more convenient office setting. In fact, physicians may soon find that under this program, they do not have the means to run an OSHA compliant infusion suite, and hire expensive oncology certified nurses. This will send patients to the hospital outpatient department, where most things are more expensive, both for Medicare and for the patient portion. The vendors may also find that if they carry those costs, and incur the losses from the patients without means to pay the 20%, that their margin of ASP+6% will not be sufficient. The temptation to provide counterfeit drug, or dilute drug may prove irresistible. The Council discussed these issues, and also the fact that if a vendor is large enough to change market share, then it can force a decreased price below ASP. Then, if the next quarter calculation of ASP includes that price, drugs will be even more out of reach for the physician who wishes to stay out of the CAP. PPAC recommended that CMS require that the CAP vendors absorb the cost of returning drugs, or unusable drugs, and that the CAPs must be willing to advance credit for drugs for patients with no ability to pay the co-pay. PPAC recommended that the CAP vendors' price not affect ASP for the people opting out of CAP. PPAC recommended that the CAP contractor must be willing to provide drugs for off label use when evidence supports the indication, and the vendor can use the established CMS process for determination of medical necessity. As many oncology indications are not listed in the FDA approval process, and are therefore \"off-label\" and run the risk of not being reimbursed without going through an appeals process, we were worried that the vendors would not be willing to risk their cash flow to ship these drugs. PPAC recommended that the individual practicing physician be able to decide on a drug-by-drug basis whether or not to use the CAP vendor or another vendor. I am sure that this issue has exhausted everyone's interest, except those of us in specialties who deliver injectable drugs in the office. I must call attention to my conflict of interest in this as a practicing oncologist. Hopefully future PPAC meetings will not have to spend so much time on this issue. CMS is hoping that these changes will be sufficient to fix the drug effect on the fee schedule enough to reassure doctors, but I disagree. MEDICARE ADMINISTRATIVE CONTRACTORS (MACs) As required by the Medicare Modernization Act, CMS intends to reform the contracting process for Medicare Fiscal Intermediaries (FI) and Carriers, in hopes that the competition will result in a more efficient, more accountable system. Carriers and FIs will be merged into regional Medicare Administrative Contractors (MACs), which for the first time will be responsible for both Part A and Part B in the same organization. The regions will be more logically chosen to include contiguous states, and to try to replicate the patterns of health care in the region. This will not break down the silos separating Parts A and B, which are dictated by statute, but it is a promising first step. For example, in the Chronic Care Initiative Program, efficiencies in the Physician side may result in savings on the Part A inpatient side, and it is CMS's intention to be able to measure those savings. PPAC recommended that as part of the contracting reform, that more integration between parts A&B be developed even if new legislation is required, including having the money follow the service from part A to B. PPAC discussed the current parts of the Carrier system, which work well, such as the Carrier Advisory Committees, and the accessibility of some Carrier Medical Directors. PPAC recommended that CMS continue the CAC process into the new system. We also recommended that CMS keep the carrier medical directors accessible even if that requires that new doctors be hired. CMS is expecting significant savings to come out of this program, and gave as an example, having web-based information on eligibility available to physicians to reduce the number of rejected claims. PPAC recommended that any money for incentives to MACs be new funds or taken out of administrative savings, and not come out of the physician fee schedule. We also recommended that CMS give providers the ability to track the progress of their claims on the CMS website. The contracting process will also include evaluation on the quality of the services provided by the MACs, such as the accuracy of information given. PPAC recommends that CMS include in the MAC contract a mechanism for physician evaluation of service provided, and for use of these evaluations in determining improvement plans or discontinuation of the contracts. Currently DME and Hospice/Home Health Care will have their own carriers. PPAC recommended that CMS look into incorporating Part A, B, DME, and Hospice/Home Health Care into a single jurisdiction in the future. More information is available at www.cms.hhs.gov/medicarereform/contractingreform. PAY FOR PERFORMANCE Discussion on CMS' plans to pay for performance included a description of the difficulty of defining quality in a measurable way, and with inclusion of the demographic, patient compliance and co-morbidity factors which skew outcomes. The American Medical Association has done a significant amount of work developing parameters by which performance should be measured, and guidelines for successful implementation of a program that rewards better quality. PPAC was concerned that the business model of rewarding the top performers and punishing the lower performers would be incorporated into the CMS plan. We felt strongly that, in the absence of a mechanism to account for physicians who have non-compliant, socio-economically challenged patients with co-morbid conditions, that the incentives for physicians would be to avoid those patients in order to demonstrate good outcomes data. PPAC recommended that as CMS develops and implements a pay for performance program, these programs should remain in alignment with certain principles and guidelines developed by the AMA that are attached to the AMA written statement, and that CMS ensure that implementation of any quality improvement/pay for performance programs is premised on establishment of a reliable, positive Medicare physician payment formula. The need for a searchable electronic medical record (EMR) in physicians' practices limits the ability to participate in these programs, and affordability and reliability are major impediments for small practices. PPAC recommended that CMS, as part of the Pay for Performance plan, develop criteria for EMRs and data collection sets to facilitate dissemination of information technology among physician practices. CMS also acknowledged that specific performance measures will have to be developed by the physicians involved, and thought that the specialty societies were best situated to accomplish this. Trent Haywood, MD JD (thaywood@cms.hhs.gov), an internist who is directing this effort, made an excellent presentation and showed clear understanding of the issues involved. PPAC expects to hear from him often as this project moves forward. Physicians need to recognize that this process will occur, and we need to be involved in the development phase. PRESCRIPTION DRUG PLAN In 2006 seniors will be eligible to sign up for a Part D Prescription drug plan, and CMS is looking for mechanisms to educate beneficiaries about their options. CMS recognizes that physicians are a trusted source of information for patients, and that many patients will be asking us or our office staffs about which choice to make. Some of us have learned that when a patient is not entirely pleased with a drug plan chosen after discussion with the physician or staff, that we are blamed for the shortfalls of the program. Physicians are therefore somewhat reluctant to assume the unpaid role of insurance educator. CMS wished to know what means of disseminating information to physicians is most effective. If your staff wishes to learn more about this, (and you are willing to pay staff to have them educate patients about the Prescription Drug Benefit) have them look at the website: www.cms.hhs.gov/partnerships We discussed the fact that more useful than another article would be a patient friendly website where patients can enter the drugs they take, and to be able to search for available programs which provide coverage and at what price. RECOVERY AUDIT PROGRAMS The Physicians Regulatory Issues Team (PRIT) was asked by the American College of Physicians to address the development of a program of CMS contractors who can share in the bounty if they audit a physicians practice and discover overpayments. This program is scheduled to start in three states in May. PPAC requested that this program be an agenda item for our next meeting. FEEDBACK I hope this information is useful. I appreciate any feedback you care to share with me. Please use this covenient online form. I have continued to use many e-mailed comments in discussions with PPAC and found them to be extremely helpful. Thank you for your time in reading this. Respectfully submitted, Barbara L. McAneny, MD, FACP
Official CMS documents for this PPAC meeting: Zip Download |
