American College of Physicians: Internal Medicine — Doctors for Adults ®

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Congress expected to restore 2005 payment rates

While legislators passed bills to avert pay cuts, last-minute changes have allowed cuts to take effect

From the January-February ACP Observer, copyright 2006 by the American College of Physicians.

Despite sustained efforts by ACP and other national medical organizations, Congress adjourned last month without halting the 4.4% cuts in Medicare physician fees. Those cuts took effect Jan. 1.

Before they adjourned, however, the House and Senate passed budget measures to extend physician payments at 2005 levels through 2006, thereby averting cuts through this year. While changes in the final Senate bill still need approval by the House of Representatives, that body is expected to do so when it reconvenes later this month.

The Centers for Medicare and Medicaid Services (CMS) has already addressed the issue of retroactive reimbursement. In a Jan. 6 letter to key lawmakers, the CMS announced that once the new legislation is enacted, the agency is prepared to change its claims-processing software to eliminate the 4.4% reduction. The CMS also plans to automatically reprocess the 2006 claims submitted prior to the legislation enactment to pay physicians the amounts removed. Physicians will not have to resubmit these claims. Given the large number of claims that will require reprocessing, it may take several months for physicians to receive these additional payments.

The CMS also recognized that the updated, reprocessed claims would technically require additional copayments and deductibles from beneficiaries. Moreover, a waiver of this additional cost-sharing by a physician, although small in monetary amount, could be viewed as violating the Medicare Anti-Kickback law. After discussing this issue with the HHS Office of the Inspector General, the CMS believes that the waiver of this additional amount would not violate the kickback law. ACP will let members know immediately if the Inspector General's office issues any guidance.

Physicians may hold claims until after Congress acts to improve payments. Physicians must decide whether this approach is worth the cash flow interruption.

The CMS said it also intends to offer an additional enrollment period for doctors to reconsider their Medicare participation decision in light of the anticipated better-pay situation. The original enrollment period ran from Nov. 15 to Dec. 31, 2005. The extended enrollment period will run an additional 45 days, and will start soon after the legislation is enacted.

The College was somewhat relieved by the Hill's actions. "The fact that the House and Senate are on record as voting for identical provisions to stop the SGR [sustainable growth rate] cuts bodes well for getting the SGR cuts reversed early in 2006," ACP President C. Anderson Hedberg, FACP, wrote in a Dec. 23, 2005, e-mail sent to College members.

Far-reaching implications

In the same e-mail, however, Dr. Hedberg expressed dismay that "political gamesmanship" had delayed action on cuts that could dramatically affect patient care. In the "In Their Own Words" campaign that ACP helped mount last fall, internists nationwide detailed the effects scheduled pay cuts would have on their practice.

Even temporary cuts are a hardship for practices already functioning within extremely tight financial constraints, Dr. Hedberg wrote. ACP is calling on all members to contact their representatives and urge them to take immediate action, upon their return, to reverse the pay cuts retroactive to Jan. 1.

Long-term reform

Reversing the cuts is "just an essential first step" to long-term payment reform, according to Dr. Hedberg. ACP continues to strenuously advocate for comprehensive payment reforms to reward physicians who provide higher quality care. This year, the College will detail models of delivery and reimbursement that recognize the value of internists' care coordination. (See "Recasting the debate on Medicare physician payments.")

"We need to get Congress off the roller coaster of passing temporary reprieves that do not fix the underlying problems with Medicare’s payment policies," said Robert B. Doherty, ACP's Senior Vice President for Governmental Affairs and Public Policy. "We will be asking ACP members to demand real reform. Lawmakers need to hear from doctors that another year of inaction and small steps will not be acceptable."

You can contact your legislators through ACP's Legislative Action Center. The Jan. 6 letter is also online.

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