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Medicare E&M Reimbursement News
Bush Administration Medicare Proposal Would Increase Part D Premiums for Higher-Income Beneficiaries, Implement Nationwide EHR System and Limit Damages in Malpractice Cases
A new Bush Administration proposal would increase Medicare prescription drug benefit premiums for higher-income beneficiaries, require healthcare providers to use electronic health records (EHR), and cap non-economic damages in medical malpractice suits, The Hill reports.
The administration issued the proposal last week in compliance with a Medicare law provision requiring the president to submit a Medicare savings plan to Congress. The provision took effect after Medicare trustees estimated, for a second year in a row, that federal general fund revenue would finance more than 45% of total program costs within seven years.
The President's proposal would increase Medicare prescription drug benefit premiums for individuals with annual incomes of at least $82,000 and couples with annual incomes of at least $164,000. In addition, premiums would triple for individuals with annual incomes of at least $205,000 and couples with annual incomes of at least $410,000. Initially, the provision would affect fewer than 5% of Medicare beneficiaries but would affect more over time because the specified income limits would not be adjusted for inflation. The provision would save an estimated $900 million in 2013 and almost $3.2 billion over five years, according to the Administration.
The proposal would also require the Health and Human Services secretary to develop and implement a nationwide, interoperable EHR system. According to CQHealthbeat, the system would:
- make personal health records available to Medicare beneficiaries;
- provide beneficiaries with cost and quality data to help them select among medical treatments, physicians, hospitals and health plans;
- group data on medical treatments by "episodes of care," which would compare all related aspects of care;
- provide incentives for beneficiaries to use more efficient health care providers and preventive services that can reduce costs;
- guarantee a transition into Medicare for individuals with health savings accounts;
- implement a system under which some Medicare reimbursements would vary based on quality and efficiency of care; and
- allow HHS to release measurements of quality and efficiency for physicians.
In addition, the proposal would cap noneconomic damages in malpractice lawsuits at $250,000 per case and reduce the length of time during which patients could file such lawsuits.
The proposal would function in conjunction with the fiscal year 2009 spending plan that President Bush released early this month, according to HHS Secretary Mike Leavitt, who estimated the budget would cut Medicare spending by $178 billion over five years. The proposal, he added, would "lay out a foundation for transforming Medicare."
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CMS Posts Updated 2008 PQRI Information
The Centers for Medicare and Medicaid Services (CMS) has posted updated information about the 2008 Physician Quality Reporting Initiative (PQRI). Under the PQRI, eligible professionals who chose to report on a designated set of quality measures for services covered by the Medicare Physician Fee Schedule are eligible for bonus payments.
Among other things, the update identifies the 119 quality measures that will be included in the 2008 program. CMS originally considered 148 measures. The final rule also contains a summary of and response to comments concerning the PQRI and describes CMS’ plans to test quality-measures data submission mechanisms based on clinical data registries and electronic health records.
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$16 Million Project To Develop Approach to Measuring Healthcare Quality and Cost
The Brookings Institution's Engelberg Center for Health Reform, healthcare organizations and healthcare quality experts will undertake a major effort to develop a consistent national approach to measuring healthcare quality and cost, the Robert Wood Johnson Foundation announced last week.
The foundation is providing $16 million in funding for the program. The Engelberg Center, which will receive the lion's share of the funds, and America's Health Insurance Plans will work with business alliances, government agencies, and provider, consumer, payer, and regional healthcare quality groups to make better information about the quality and cost of health care available. The project is expected to be completed by 2010.
One part of the project will involve closely examining physician care across entire practices by combining data from different health plans and Medicare. Former Centers for Medicare and Medicaid Services (CMS) administrator Mark McClellan, MD, will coordinate the project.
"Better information is the best way to drive improvements in care," Dr. McClellan said. "Consumers will have, often for the fist time, information they can use to guide decisions about their health care like they use for many other important purchasing decisions."
"Consistent measures for cost generally have not been implemented, so the project will work to provide new, needed cost measures," he added. Among other things these measures may ultimately help identify, and help address important racial and ethnic disparities in healthcare, he added.
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Average Monthly Premiums for Medicare Part B Will Increase in 2008, CMS Reports
Average monthly Medicare premiums for outpatient services will increase roughly 3% in 2008, the Centers for Medicare and Medicaid Services (CMS) announced recently. This is the smallest increase in Medicare Part B monthly premiums since 2000, CMS reports.
The premium -- which covers physician office visits, home health services, and ambulatory surgical center services, among other things -- will rise to $96.40 next year, increasing $2.90, or 3.1%, from $93.50 this year. Higher income Medicare beneficiaries will have to pay a steeper monthly premium calculated on a sliding scale. The higher fees apply to individuals whose annual income exceeds $82,000 and couples with a combined income in excess of $164,000.
The 3.1% increase is attributable to growth in certain areas of Medicare's fee-for-service program, including home health services, physician-administered drugs and durable medical equipment, according to CMS. Increased reimbursements to private Medicare Advantage plans and a decline in the health of beneficiaries enrolled in these plans also contributed to the increase.
At the same time, the deductible for Medicare Part A -- which covers hospital inpatient services -- will increase to $1,024 in 2008, up $32, or 3.2 %, from $992 in 2007. Medicare beneficiaries pay this deductible when admitted to a hospital and are then covered for 60 days of inpatient care.
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CMS Announces Payment Changes for Medicare Home Health Services
Medicare payments to home health agencies will increase as much as 3% in 2008 under a final payment rule that the Centers for Medicare and Medicaid Services (CMS) issued late last month.
Home health payment rates are updated annually in keeping with the "home health market basket index," which measures inflation in prices of a mix of items and services that home health agencies provide.
In 2008, CMS will also take agencies' participation in quality reporting into account when calculating payments. Home health agencies that collect and report Outcome and Assessment Information Set (OASIS) data will receive a 3% increase, while those failing to report will get a 1% increase. CMS plans to evaluate home health quality of care using this OASIS data.
The new CMS rule will add two new National Quality Forum-endorsed quality measures to the current list of 10 required OASIS measures. The two new measures concern emergent care for wound infection and deteriorating wound status and improvement in status of surgical wound.
"This rule continues the agencies effort to improve the efficiency and quality of care for Medicare beneficiaries," said CMS Acting Deputy Administrator Herb Kuhn.
In addition, the final rule implements the following:
- A reduction in the national standardized 60-day episode payment rate for four years. The reduction will be 2.75% per year for three years, starting in 2008, and 2.71% for the fourth year, 2011, to account for changes in case mix that are not related to home health patients' actual clinical conditions. (CMS is now accepting comments on the fourth-year reduction.)
- Modification to the low utilization payment adjustment (LUPA).
- Elimination of the significant change in condition (SCIC) payment adjustment.
- An increased payment for LUPA episodes that occur as the only episode or the first episode during a period of home health care -- to account for front-loading of costs in an episode.
- A payment model for non-routine medical supplies (NRS) based on six severity groups, similar to the clinical case-mix model, to more accurately reflect home health agency costs. CMS added a sixth severity level to reflect cases with extremely high NRS expenditures.
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AGS Works in Coalition with Other Organizations to Increase Physician Work Values
A coalition including the American Geriatrics Society, the American Medical Directors Association (AMDA), the American College of Physicians (ACP), and the American Academy of Family Physicians (AAFP), played a key role in the development of a new Centers for Medicare and Medicaid Services (CMS) proposal that would increase physician work relative value units (RVUs) for the nursing facility family of codes.
Under the proposal, nursing facilities would be eligible for additional payments if they meet time requirements for prolonged service codes 99354-99357. If the reimbursement recommendations are approved this fall, the new rates will take effect January 1, 2008.
"We hope that this increase will attract qualified physicians to caring for the frail elderly in long-term care," said Dr. Cheryl Philips, AGS Board Secretary and a Past President of AMDA. "Our hope is that the increase in the relative values will benefit patients with limited access to care - a group that AGS members care deeply about."
If the recommendations are adopted, the coalition estimates that payments for physician work related to nursing facility services could increase by more than $196 million in 2008.
Collaboratively, the coalition worked to obtain new and revised nursing facility codes through the Current Procedural Terminology (CPT) process. Dr. Peter Hollmann, Vice Chair of the AGS Public Policy Committee, sits on the CPT Editorial Panel. As a part of the coalition's effort, the results of an AMDA survey of physicians who perform services in nursing facilities was presented to the American Medical Association (AMA) and the Specialty Society Relative Value Scale Update Committee (RUC) in February 2007. The survey demonstrated that the work associated with caring for nursing home patients was similar to the work provided to hospital patients. Dr. Meghan Gerety, a Past AGS President, is a long-standing member of the RUC. After parity negotiations, the RUC sent its final recommendations to CMS, which lead CMS to propose the recommendations.
AGS has seats on RUC and CPT because of its seat in the AMA's House of Delegates. To retain that seat, at least 1,000 AGS members also need to belong to the AMA and specify that AGS is their specialty society representative. If you are an AMA member, please help AGS to retain its seat in and voice with the House of Delegates by selecting the Society as your specialty society representative.
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AGS Comments on CMS' Proposed Physician Fee Schedule for 2008
In addition to averting pending cuts in Medicare payments to physicians - cuts that could discourage doctors from seeing Medicare beneficiaries -- the federal government should address flaws in the controversial formula it uses to adjust these payments, the American Geriatrics Society (AGS) advised in a recent letter to the Centers for Medicare and Medicaid Services (CMS). In the August letter, AGS recommended an overhaul of the contentious Sustainable Growth Rate (SGR) formula, which mandates physician fee cuts whenever growth in outlays for these exceeds growth in Gross Domestic Product, and recommended additional changes in a physician payment rule that CMS has proposed.
In keeping with the SGR mandate, the rule CMS has proposed would cut Medicare payments to physicians 9.9% in 2008. It would, however, offer bonuses of up to 1.5 % to doctors participating in the agency's voluntary Physician Quality Reporting Initiative (PQRI). Among other things, the CMS rule also calls for adding additional quality measures to the PQRI in 2008, and promoting the use of electronic prescribing.
In addition to urging CMS to revise the SGR and avert the pending pay cut, the AGS' letter also advised CMS to:
- Apply budget neutrality provisions to Medicare payment work relative value units (RVUs) through adjustments in the conversion factor and not to the work RVUs themselves. This would more accurately implement corrections in evaluation and management (E/M) valuations specified in the most recent five year physician payment review, the letter noted;
- Opt not substitute pay-for-reporting programs for physician fee schedule annual updates. The latter, the letter stated, better reflect real practice cost trends;
- Address the undervaluation of Home Visit and Domiciliary Visit Care; and
- Adjust practice expense RVUs administratively so that they can be reallocated in a budget neutral manner across other services in the fee schedule.
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Average Monthly Premiums for Medicare Prescription Drug Plans Will Hit $25 in 2008, According to CMS
Average monthly premiums for the Medicare prescription drug benefit will rise to $25 in 2008, up from $22 in 2007, the Centers for Medicare and Medicaid Services (CMS) announced recently.
An estimated 87% of beneficiaries, however, will be able to purchase prescription drug plans at the same or lower cost in 2008 than in 2007, according to CMS. Beneficiaries already enrolled in a Medicare drug plan can look for less expensive plans, and can change plans once the next open enrollment period begins November 15.
Beneficiaries enrolled in Medicare Advantage (MA) plans will continue to pay less for prescription drug premiums than those enrolled in stand-alone plans, according to CMS. In 2007, Medicare Advantage beneficiaries paid $7 less each month than those enrolled in traditional Medicare. In 2008, MA enrollees will pay $11 less each month for their premiums, the agency estimates.
The overall increase in premiums is primarily "a result of technical adjustments required by law and not because insurers estimated it will cost more to provide drug coverage for beneficiaries," The Detroit Free Press reports.
In 2003, when the prescription drug program debuted, it was estimated that monthly premiums would average $41. According to Herb Kuhn, acting deputy administrator of CMS, premiums have stayed below the $41 mark due to "slower-than-expected growth in prescription drug costs generally, in part because of increased generic usage, effective plan negotiation and strong competition."
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CMS Makes Changes to Clinical Trials
The Centers for Medicare & Medicaid Services (CMS) recently made two changes to its clinical trials policy, both effective last month, and is planning two additional changes.
In keeping with one of the changes, Medicare will reimburse for supplies and services used in a clinical research trial "if they would be covered outside of the clinical research trial."
Under the "Coverage with Evidence" clause that CMS adopted, Medicare will cover the cost of supplies and services in clinical research trials for which there is "some evidence of significant medical benefit, but for which there is insufficient evidence to support a 'reasonable and necessary' determination" as long as the clinical trial meets requirements stated in the national coverage determination.
In addition, CMS plans to reconsider the CTP national coverage determination "to define a plan to continue Medicare payment for clinical trials and create greater transparency of the circumstances in which Medicare payment will be available." CMS will also "propose changes to the regulations pertaining to clinical trials and Medicare payment and implement the changes to claims processing instructions," the agency reported.
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CMS Delays Dissemination of National Provider Identifier Information till August 1
The Centers for Medicare & Medicaid Services (CMS) has announced a delay in the dissemination of National Provider Identifier (NPI) information to physicians until August 1. Initially, CMS had intended to make NPI information available June 28 to physicians via the Internet. CMS believes that the delay in implementation will provide additional time for physicians to update or delete (where permitted) information before it is released. Additional information on the NPI can be found on the CMS NPI Web page.
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Campaign Encourages Seniors to Make Most of Medicare's Preventative Services
The US Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) are launching a campaign to educate seniors about the preventive health benefits available to them under Medicare. The campaign, A Healthier US Starts Here, will travel the country this spring and summer teaching seniors the importance of, and motivating them to take advantage of Medicare's preventive health services. The goal of the campaign is to improve the health of the 43 million people with Medicare coverage.
"Preventative health care can help people live healthier lives and can help reduce costs associated with treating chronic disease. From Seattle to Miami and Boston to San Diego, A Healthier US Starts Here will enlist the support of local organizations to help Medicare beneficiaries and all Americans learn how to live longer, healthier, and happier lives," said HHS Secretary Mike Leavitt.
Under the Medicare program, beneficiaries currently have access to the following preventive services:
- One-time "Welcome to Medicare" physical (including abdominal aortic aneurysm screening)
- Cardiovascular screenings
- Smoking cessation counseling
- Cancer tests - mammogram screening for breast cancer, Pap test and pelvic exam screenings for cervical and vaginal cancer, colorectal cancer screenings, and prostate cancer screenings
- Shots and vaccines - flu, Pneumococcal, Hepatitis B
- Bone mass measurement
- Diabetes screening, glucose monitoring supplies, and self-management training
- Medical nutrition therapy for people with diabetes or kidney disease
- Glaucoma tests
A patient brochure that includes a checklist of covered services is now available. The campaign will also teach seniors how to use and take advantage of the CMS Web site. Among other things, the site gives beneficiaries access to information on their benefits, Part B deductibles, and eligibility and enrollment information concerning Medicare, including the prescription drug benefit.
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AGS Drafts "Medicare and You (the Geriatrics Healthcare Professional) 2007 and CPT Changes," A Member Benefit Now Available On MyAGS Section of Web Site
As a member benefit, AGS has drafted an authoritative, comprehensive guide to 2007 changes in the Medicare fee schedule, medical benefits covered by Medicare, and CPT codes and has posted the guide to the coding corner page under resources/tools on MyAGS, the members-only section of the Society's Web site. The detailed guide, "Medicare and You (the Geriatrics Health Professional) 2007 and CPT Changes, " was written and reviewed by AGS members with expertise in these areas. Among other things, the guide also includes helpful links to definitive sources of additional information on these key topics and information on Medicare participation options.
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