Practicing Physicians Advisory Council (PPAC) Update for August 22, 2005I am pleased to send you this update on the August 22, 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 The most important topic of discussion at the August PPAC meeting was the newly released physician fee schedule proposed rule. Congress has not addressed the Sustainable Growth Rate (SGR) formula, so physicians are scheduled for a 4.3% decrease in the conversion factor. An additional 26% decrease is scheduled for the next five years, unless Congress intervenes or unless CMS uses its administrative authority to retrospectively remove the physician administered drugs from the SGR. The AMA presented results of its survey showing that access to physician services will be significantly impaired unless the SGR is fixed. About a third of physicians will limit the number of new Medicare patients accepted into their practices, and about half will not participate in Medicare Advantage or purchase Information Technology systems. PPAC recommended that CMS not institute the 4.3% decrease, but instead use the MEDPAC recommendation of a 2.7% increase. PPAC recognized that CMS is not able to ignore the SGR statute, but wished to once again convey to CMS that the SGR is unacceptable. PPAC also requested a response from CMS at our December meeting as to whether the physician-administered drugs (the "incident to" drugs) can be retrospectively removed from the SGR using an administrative approach. We have requested this multiple times, and the answer from CMS has been that the CMS lawyers are studying the issue. A significant concern has been whether or not all the new benefits available through the Medicare Modernization Act (MMA) were adequately represented by new money in the calculation of the SGR target. Unless new money equivalent to the expenditures of the new benefits was added to the target level of expenditures, the costs of new benefits would contribute significantly to the lowering of the conversion factor and not be under control of physicians. PPAC recommended that CMS present to us the specific amounts of new money introduced into the system attributed to these new benefits. The physician fee schedule also introduced a new methodology for the determination of the practice expense relative value units. The practice expense can account for as much as 45% of the fee for a service, so the methodology needs to be as accurate as possible. PPAC requested that CMS provide examples of how the new values are calculated, actual new practice expense values for each code, the values used in the first year of transition, the source of the data for each specialty, the budget neutrality adjustments used, and the impact of the changes by specialty. PPAC also recommended that CMS delay implementation of these changes until the AMA and other specialty societies have had time to review them in detail, and CMS has had time to consider any alternative methods. At the May, 2005 PPAC meeting, we had requested that CMS develop a contingency plan to maintain access to care for seniors if physicians become unable to care for Medicare patients due to the cumulative effect of the reimbursement cuts. CMS had interpreted our request to apply only to the physician-administered drugs but did comment that other agencies are working with CMS on this issue of access. PPAC therefore requested that at the next meeting we be presented with the plans to monitor subsets of patients who might function as early indicators of access problems. Examples of possible indicator groups are the Medicare Medicaid dual eligible patients, new vs. established patients, patients without medigap insurance, and specialties vs primary care. We requested that CMS develop a plan to address possible declines in access before the problems become widespread. The physician fee schedule also changes the reimbursement of certain radiological procedures so that the technical fees, but not the professional fees, are reimbursed at 50%. For example, CTs of the abdomen and pelvis will be reimbursed for the more expensive procedure (the abdominal CT) at 100%, and the pelvic CT will be paid at 50% of the previous technical fee and 100% of the previous professional fee. CMS is also planning to have nuclear medicine procedures such as PET included under the Stark anti-self referral law. PHYSICIAN REGULATORY ISSUES TEAM (PRIT) The PRIT is a team headed by Bill Rogers MD to address concerns of physicians in a rapid manner. The efforts of the PRIT are available at the CMS PRIT web page. The American Academy of Medical Colleges has been working with the PRIT to allow macros to be used in documentation in teaching institutions by the faculty for their part of the medical record. A reply is still pending to PPAC's request that hospitals be allowed to provide free CME to the medical staff without incurring kickback penalties. Claims submitted electronically with an error currently have to be resubmitted on paper, even if the error is minor or made by the carrier. PPAC recommended that CMS allow electronic resubmission of claims. The PRIT responded to a request from hospitals to have non-credentialed practitioners do the H&Ps for surgical outpatient procedures. The PRIT worked with the American College of Surgeons to recommend that the interim focused H&P should be done by the surgeon, but that others could consult as needed, and physician information from physicians not on staff can be included in the record as background material. CMS now pays for low-ionic contrast, and the pediatricians got almost all of the codes they needed inserted into the fee schedule. The PRIT continues to monitor the availability of physicians to acquire drugs for Average Selling Price +6%(ASP). The PRIT is also accepting comments from physicians about the activities of the Recovery Audit Contractors, but as this program is still focused on the hospitals, there have not been any. PPAC recommended that CMS share with PPAC at the next meeting an update on the Recovery Audit Contractors and their efficiency. COMPETITIVE ACQUISITION PROGRAM (CAP) The Competitive Acquisition Program is part of the MMA, which is designed to provide an alternative to physicians who wish to deliver the "incident to" (physician administered) drugs in the office, but wish to not have to purchase the drugs and then bill CMS for them under the ASP+6% system. At the May PPAC meeting, a large number of recommendations were written about the CAP system, and an Interim Final Rule was issued. This rule requires a vendor to supply a list of drugs on a nationwide scale to ordering physicians in a timely manner, and then bill Medicare after the drug has been administered to the patient. The vendor is then allowed to start billing the 20% co-insurance, or if there is none, to attempt to collect from the patient. The vendor is allowed to set up a payment schedule for the patient, apply to charitable foundations set up to pay copays (thus transferring donations made to a tax-deductible organization to a for profit corporation) and if they wish, if the patient is unable to make a payment in 15 days, the corporate vendor can cut off the supply of drug to the patient. The physician, who, unlike the vendor executive, must face the patient and tell him or her that they will no longer receive therapy, has only the option of disenrolling from the entire CAP program and treating the patient at a loss. PPAC recommended that CMS not allow a vendor to discontinue drugs provided under the CAP to a patient, regardless of the patient's ability to make a payment. There are many administrative problems with the CAP system as well, which has resulted in no vendors having applied to participate on August 3, 2005 when the program was delayed for 6 months. Unlike all other Medicare programs, physicians cannot decide as individuals to participate, but must join or not join as a group. This may be a problem for multi-specialty groups where some specialties could function under the CAP program but others could not. PPAC recommended that CMS revise the CAP requirements so that physicians may join as individuals. There is some controversy as to whether or not Congress intended that the prices obtained by the CAP vendors be used in calculating the ASP+6% reimbursement to physicians who do not participate in CAP. Presumably, since the vendors can be reimbursed at a maximum of ASP+6%, they can achieve volume discounts from the manufacturers. These volume discounts would lower the reimbursement for nonCAP physicians, thus making it harder for nonCAP physicians to stay in business. House Ways and Means Chairman Thomas, the author of the CAP program, has been quoted as saying that CAP prices were not intended to be part of the ASP calculation. PPAC recommended that CMS work with Chairman Thomas to clarify how Congress intended the CAP and ASP systems to work independently. The PPAC also recommended that CMS remove vendor prices from the calculation of ASP. In the Hospital Outpatient Prospective Payment System (HOPPS) rule, CMS recognized that the pharmacy overhead is not adequately covered by ASP+6%. (In 2006, hospitals outpatient departments will also be reimbursed at ASP+6% for the drugs). The HOPPS rule had the leeway to give another 2% for the pharmacy overhead to the hospitals, and did so. Pharmacies distributing oral drugs also receive a dispensing fee denied to physicians. PPAC recommended that CMS treat physicians equitably with hospitals and add another 2% to ASP+6% for physicians using the ASP methodology and a dispensing fee for physicians using CAP. CMS stated in the interim final rule that there was no additional administrative overhead to using CAP. However, instead of buying a drug in bulk, and submitting one bill for the drug and the administration, under the CAP system, the physician must submit an order for the drug, receive and store it labeled with the patient's specific prescription number, and after administration, submit one bill to the carrier and another form with the prescription number to the vendor, and supply the vendor with the necessary billing information to bill the secondary payer, and help the vendor with any appeals. PPAC recommended that CMS re-evaluate its contention that participation with CAP does not confer any additional administrative burden on the physician. PPAC also recommended that CMS reconsider its decision to require 14 days to submit a bill, as 30 days is a more realistic number, especially for small practices. PART D PRESCRIPTION DRUG BENEFIT CMS has worked hard to increase awareness of the new Part D prescription drug benefit, and the PPAC voiced its appreciation. We all received copies of the Medicare Part D Toolkit, which has materials to help physicians explain the benefit to our patients. A CMS survey showed that patients are likely to ask us for assistance. Part D will be administered by multiple companies offering seniors a variety of plans. The current plan includes a $250 deductible, followed by assistance of 75% for the first $2250, then no assistance, (the donut hole). If the beneficiary then accumulates over $5100, then the plan pays 95% for the rest of that calendar year. The next year the process starts over. Patients currently on Medicaid are automatically enrolled, patients with very low incomes are given significant subsidies, and employers are given a subsidy to encourage them to not drop the prescription drug coverage for retirees. If they do, the beneficiary can sign up for Part D without a penalty. If a patient has a plan from their employer, the employer must send a letter letting them know whether or not the existing plan is as good or better than Part D. Currently, the estimated premium for Part D will be about $32/month. Currently, the drugs currently covered under Part B, including oral chemotherapy and immunosuppressive drugs, are not scheduled to be moved to Part D. The OIG is evaluating whether or not the help provided by pharmaceutical companies' patient assistance programs can be considered part of the patient's out of pocket expense, thus helping to meet copays and deductibles. PPAC recommended that CMS work with the OIG to give definitive guidance on whether manufacturer's' patient assistance programs can contribute to the out of pocket expense without being considered a kickback. NATIONAL PROVIDER IDENTIFIER (NPI) An update on the NPI rollout was provided. NPIs are available now. Between Jan 3, 2006 and October 1, 2006, claims may be submitted without the NPI and with the currently appropriate billing number (called a legacy number). After October 2, 2006, until May 22, 2007, claims may include both numbers, and this will help the system become accurate. Claims may be submitted with just the NPI during this time, but clearinghouses may wish to continue using both. After May 23, 2007, only the NPI should be used. CMS wished input on how physicians plan to share the NPI with referring doctors and others, and whether or not we are concerned about security issues if the NPIs are public. SURGICAL CARE IMPROVEMENT PARTNERSHIP PROGRAM (SCIP) Dr. David Hunt, a surgeon, presented a program in which CMS is participating with multiple other organizations concerned about improving the quality of surgical care. Efforts are underway to decrease the rates of surgical infections, thromboemboli and DVTs, ventilator-requiring pulmonary complications and perioperative MI. An additional program is looking at dialysis access. Indicators for each of these goals were developed, and are being measured at participating institutions. We discussed the variance of appropriate care for different procedures, and the difficulty and expense of collecting accurate data. PPAC recommended that CMS recognize that data collection is expensive and that if data collection becomes part of the cost of doing business, that the expense must be adequately reimbursed by CMS and other payers. While some of the indicators, such as the rate of appropriate antibiotic ordering and delivery, may be made public, the SCIP program is designed for improvement of outcomes rather than as a pay for performance measure at this time. ALLIANCE FOR CARDIAC CARE EXCELLENCE (ACE) PROGRAM CMS is partnering with multiple other organizations that are concerned about the quality of cardiac care in a structure similar to the SCIT. This organization, founded this year, has developed a set of common goals and quality measures. PPAC was concerned that the disparity in cardiac health outcomes in minorities would be masked by the effort as the majority's health parameters improved. PPAC recommended that CMS assume an active role to ensure that the ACE program works to reduce cardiovascular health disparities among minorities and increase minorities' access to high quality cardiovascular care.
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 find them to be extremely helpful in developing PPAC resolutions and comments. Thank you for your time in reading this. Respectfully submitted, Barbara L. McAneny, MD, FACP
Official CMS documents for this PPAC meeting: Zip Download |
