Senate Leaders Release Healthcare Delivery Proposals

Senate Finance Committee Chair Max Baucus (D-MT) and Ranking Member Chuck Grassley (R-IA) released their proposal for reform of the current healthcare delivery system. This policy proposal document is the first of three such policy proposals that are scheduled to be released within the next month. Proposals regarding access to healthcare and financing will be released by the end of May. The document is divided into five sections: payment reform, long-term payment reforms, infrastructure investments, Medicare Advantage, and fraud/waste reduction.

In addition to changes to the value-based purchasing programs for hospitals, nursing homes, Medicare Advantage plan changes, and changes to payments for rehabilitation facilities, some of the major policy proposals in the document include:

• Extending the Physician Quality Reporting Initiative (PQRI) to include payments for participating in a qualified Maintenance of Certification (MOC) or completion of a MOC practice assessment;
• Requiring disclosure of financial interests in services provided through the in-office ancillary services exception to the Stark Law and to notify patients of other providers in their area, although it does not propose changes to any of the services currently allowed under the exception;
• Development of appropriateness criteria for the use of imaging services;
• Instituting primary care and certain general surgeon services bonus payments. If these payments are made “budget neutral,” the cost of these payments could be set by reductions in payments to specialty providers.
• Bundling of payments for treatments requiring hospital stays;
• Changing the Sustained Growth Rate formula. Two policy options are considered here, although the document states that others are under consideration as well. The first would update the fee schedule by 1% in both 2010 and 2011 and 0% in 2012. It would then go back to the current law in 2013. The second option would be the same, except that, beginning in 2012, a floor of –3% would be set. Beginning in 2014, for those rates with an average growth rate of at least 110% would have a floor of –6%;
• Creating Accountable Care Organizations, which would allow provider groups to opt to share in any cost savings they generate for Medicare if they meet certain quality thresholds; and
• Considering the inclusion of comparative clinical effectiveness research priorities;
• Ending the physician-owned hospital exceptions in the current Medicare provisions, with some limited exceptions for facilities that have both physician ownership and a Medicare provider agreement in effect as of July 1, 2009. There would also be increased reporting requirements for these grandfathered hospitals.

Please click here to read the full proposal.

PQRI Update

With all of the attention on the broader health reform topic, pay for performance has become an increasingly larger part of the discussion.  As such, it will likely be an important component of any final agreement that may occur in this area as it is likely that health care reimbursements would move to a quality-based payment system under a healthcare reform proposal, although no specific proposals have been yet been advanced.  One small issue that has been discussed would be to extend the Physician Quality Reporting Initiative (PQRI) to include payments for providers who are participating in a qualified Maintenance of Certification (MOC) or completion of an MOC practice assessment. 

Please click here for more information on legislative initiatives on quality initiatives and pay for performance and also for information on the 2009 updates for the PQRI process.

An article from Dr. Michael Rapp, the head of the CMS PQRI system, on implementation advice for 2009 PQRI and e-prescribing incentive payments can be found by clicking here.

MedPAC Releases March Annual Report for 2009

MedPAC has released its March 2009 Annual Report in which it makes its recommendations for Medicare payment policy. In its report to Congress, presented to the House Ways & Means Subcommittee on Health during a hearing on March 17th, the Commission announced that the report focuses on furthering sustainability by modifying the current payment systems. Recommendations included changes in Part D drug payments, Medicare Advantage plan reimbursements, and hospice care payments. For physician payments, MedPAC recommends that Congress update payments for physician services by 1.1 percent, which is the same percentage increase as was set by Congress for 2009.

Of particular importance and concern for urology, the report made recommendations for changing payments for both imaging services and ambulatory surgical centers. The imaging proposal recommends that Medicare adopt a standard by which providers are assumed to use imaging equipment at 45 hours per week, or 90 percent of the time that providers are assumed to be open. The recommendations ask that HHS begin by applying this standard to all diagnostic imaging machines that cost more than $1 million. For ASCs, MedPAC recommends that ASCs receive a payment update of 0.6 percent for calendar year 2010 and that the facilities be required to submit cost and quality data to the department in order to study the future adequacy of payment rates for these facilities.

Please click here for a copy of the report.

Red Flag Rules Scheduled to Go Into Effect

UPDATE: Late on April 30th, the FTC postponed the implementation date for the Red Flag Rules to August 1, 2009, less than 12 hours before they were due to go into effect. Affected parties, including physicians, will now have an additional three months to adopt policies implementing the rule. Physician groups, including the AACU, will use this additional time to work to convince the FTC that physicians are not "creditors" and should therefore not be subject to these rules.

In late 2007, Congress passed legislation that required all “creditors” to adopt procedures for how to deal with suspected cases of identity theft and fraud in their businesses. At that time, the Federal Trade Commission (FTC) interpreted “creditor” unnecessarily broadly to include physicians if they issue invoices, allow payments in installments, or in any way defer payment for services, even if payments are deferred while waiting for insurance reimbursement. Despite repeated advocacy efforts by several provider groups, including the AACU, they have not yet changed this position.

AACU believes strongly that the FTC failed to consider the totality of circumstances regarding application of these rules to physicians, who are already subject to strict legal and administrative burdens to ensure that patient information is kept private and secure. Their decision to include physicians in the definition of creditor is also contrary to all other interpretations of the statute and was quite obviously not the intent of Congress when passing this law. AACU will continue to advocate against this extreme piece of legislation.

In the meantime, the AMA has developed a policy template that practices can use as the basis for their own policies. Please contact your legal representative before adopting any policy to ensure that it meets your particular needs.

Please click here for the policy template.

White House Forum on Healthcare Reform

The President’s White House Forum on Healthcare Reform met on Thursday, March 05, 2009 to discuss ideas for healthcare reform. Over 120 participants were at the event and included Members of Congress, as well as representatives from physician, consumer, labor, insurance, and employer groups. This meeting was an initial gathering of key participants in the health care debate and was meant to start the process toward a reform bill expected to be introduced this summer. The White House also announced that regional meetings in California, Iowa, Michigan, North Carolina, and Vermont will be held in the upcoming months, although specific dates have not been released.

A list of the participants in the forum can be found here.

Comments to CMS on the 2009 Medicare Physician Fee Schedule

AACU has submitted comment to CMS on the proposed regulatory changes in the 2009 Medicare Physician Fee Schedule. In addition to provisions affecting physician payment, there are numerous proposed changes to requirements relating to in-office imaging, application of anti-markup rules, nonpayment for Hospital Acquired Conditions beyond the hospital setting, drug acquisition and pricing, and many other issues. See the comments submitted by AACU to CMS as well as a summary of the 2009 Medicare Physician Fee Schedule from CMS here.

A copy of the court’s opinion can be found by clicking here.

Urologists United Against Payment Cuts

Update: On Tuesday, July 15, the President vetoed HR 6331, legislation to prevent the scheduled 10.6% cuts to Medicare payment to physicians for 18 months. The House and Senate immediately passed a veto override, and HR 6331 is now the law of the land.

While this remarkable victory for medicine should be celebrated, this issue is not truly resolved. Urologists will face cuts in Medicare payment of greater than 20% in 18 months. Congress must now act to seek lasting changes to the physician payment formula.

The flawed Sustainable Growth Rate (SGR) formula must be reformed more broadly. Not only has the SGR formula generated pay cuts - it has kept current Medicare physician payment rates about the same as they were in 2001. As a result, physicians are prevented from investing in the staff, equipment, and health information technology needed to provide optimal care. The Medicare program’s own predictions are that by 2016, total payment cuts to physicians under the SGR will equal about 40%, while over the same period, physician practice costs will increase nearly 20% - at least a 60% shortfall to the average urology practice.

It is essential that urologists – who, as a whole, bill Medicare for at least half of their total gross charges – demand that Congress use the time afforded by this 18 month reprieve to act on the guidance previously provided by MedPAC to seek lasting reform to the physician payment formula, and replace payment cuts with positive updates based on expected increases in practice costs.

For updates on the effort to reform Medicare payment, please contact the AACU at any time by sending an email to info@aacuweb.org.

Federal Trade Commission and the U.S. Department of Justice Release Statement Opposing Certificate of Need Laws

In response to a request for comment from the Illinois Task Force on Health Planning Reform, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice recently entered a joint statement in which they called on states to abolish their Certificate of Need (CON) laws for health care services.

The Department of Justice originally undertook a detailed investigation of CON laws in 2004 that ultimately found that these laws do not reduce health care costs and, to the contrary, impose additional costs and may lead to anti-competitive actions. The report notes that the federal mandate that was the original impetus behind the creation of CON laws has since been repealed because of changes in government and private insurance reimbursement processes.

Finally, the statement lists several instances where the CON process itself has been exploited to encourage non-competitive behaviors by both current certificate holders and regulators themselves. Most notable was in Illinois when a member of the planning commission charged with administering the CON process in the state pled guilty to a kickback scheme using his position on the board to secure CON approval for a particular hospital.

Currently, thirty-six states have CON laws in place. Several states, including Illinois, are examining their laws, however, to determine if they should be changed or abolished. In addition to the statement in Illinois, similar statements have been issued by the agencies to Georgia in 2007, and to Alaska and Florida earlier this year.

Please click HERE for a copy of the statement issued to the Illinois Task Force. A copy of the original Department of Justice report can be found here.

For more information, please contact Bonnie Shadid, State Affairs Manager, at statesociety@aacuweb.org.

2008 AACU State and Federal Legislative Priorities

AACU has made available its legislative priorities for 2008. Physician payment, eliminating excessive regulation on the practice of Urology, promoting men's health, defending effective medical liability reform, and supporting practice management are among the issues that AACU will be focusing its efforts on this year. The 2008 priorities can be seen in their entirety here.

Recovery Audit Contractor (RAC) Expansion

Update: Last November, Congresswoman Lois Capps (D-CA 23rd) introduced legislation to place a moratorium on expansion of the RAC program. This legislation has gained momentum following the 2008 Urology Joint Advocacy Conference, as advocates for urology used their visits to Capitol Hill to urge co-sponsorship of the bill. The Medicare Recovery Audit Contractor Program Moratorium Act of 2007 (HR 4105) would place a one-year moratorium on the RAC demonstration program, prevent it from beginning in any other states, require CMS to detail the number and nature of claims as well as the outcomes of all appeals, and require GAO to evaluate the RAC program for efficiency, integrity and compliance. The legislation is concurrently being considered by the House Ways and Means and Energy and Commerce Committees, and as of this writing, has 97 co-sponsors.

Background: As part of the Medicare Modernization Act of 2003, Congress authorized the Medicare Recovery Audit Contract (RAC) Program, beginning with a demonstration project in three states (California, Florida, and New York). The program provides contingency payments to auditing firms that identify improper payments from Medicare.

The goal of seeking cost savings in Medicare is laudable. However, the methods used by auditors in the program have been very questionable. Auditors participating in the program are allowed to retain their 30% contingency fee even in the case of denials that are overturned on appeal. These audits place an enormous and unanticipated burden on physician practices, with some offices receiving 50-100 letters asking for multiple patient records on previously paid charges reaching as far back as 3 years to be submitted in a matter of weeks. The egregious nature of these audits potentially threatens the financial solvency of practices subjected to them, with obvious implications not only for the professional lives of urologists, but for their patients who may face shuttered office doors.

The RAC program is now set to expand to more states. In the Tax Relief and Health Care Act of 2006, Congress authorized the Centers for Medicare and Medicaid Services (CMS) to expand the demonstration program to all fifty states by 2010. CMS has already expanded the RAC program to include Arizona, Massachusetts, and South Carolina, and the program is on schedule to be rolled out across the entire country. This will essentially implement an incomplete program without any opportunity for evaluation, or solve the problems it currently poses to physicians. Congress should place a moratorium on the program, and seek a review of the program and the practices of RAC contractors in order to ensure that the problems faced by urologists in the demonstration states are not allowed to expand nationwide.