Ltr. to CMS regarding “Medicare Program: Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2006 and Certain Provisions Related to the Competitive Acquisition Program of Outpatient Drugs and Biologicals Under Part B."

Mark B. McClellan, M.D., Ph.D.
Administrator, Centers for Medicare and Medicaid Services (CMS)
Department of Health and Human Services
Attention: CMS-1502-FC
P.O. Box 8017
Baltimore, MD 21244-8017

Dear Dr. McClellan:

I am writing on behalf of the American Academy of Family Physicians (AAFP), which represents more than 94,000 family physicians and medical students nationwide. Specifically, I am writing to offer our comments on the final rule with comment regarding “Medicare Program: Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2006 and Certain Provisions Related to the Competitive Acquisition Program of Outpatient Drugs and Biologicals Under Part B,” as published in the Federal Register on November 21, 2005.

CMS invited comments on the physician self-referral designated health services listed in tables 32 and 33 of the final rule as well as interim relative value units for (RVUs) for selected codes identified in Addendum C. We do not have any comments on the designated health services list. However, we will offer comments on certain codes in Addendum C and selected other topics included in the final rule, including the (un)sustainable growth rate (SGR).

In August, CMS proposed the following changes to its PE methodology:

In the final rule, CMS states that due to an error in its indirect PE program, it did not calculate the indirect costs as intended. As a result, almost all of the PE RVUs published in the August proposed rule were incorrect. Consequently, CMS is concerned that interested parties were not provided notice of the actual effect of the proposed changes in the PE RVU methodology and did not have a sufficient opportunity to submit meaningful comments on the proposal. As a result, CMS is withdrawing its entire PE methodology proposal and, instead, will use the 2005 PE RVUs to value all services for 2006. CMS goes on to state that it wants to work with the medical community from now through the next proposed rule to discuss issues and questions related to its PE methodology and that it intends to hold meetings on these topics early in 2006.

As supporters of the bottom-up methodology, we were disappointed that CMS withdrew its proposal to switch to a bottom-up methodology for PE RVUs. However, given the apparent errors in the data published by CMS, we understand its decision to withdraw its proposal. We appreciate CMS’s commitment to meet and work with the medical community on these issues in early 2006, and we stand ready to participate in such meetings whenever they occur.

In August, CMS proposed to extend its multiple procedure payment reduction to technical component (TC)-only imaging services and the TC portion of global imaging services for certain imaging modalities (i.e., ultrasound, computed tomography (CT), computed tomographic angiography, magnetic resonance imaging (MRI), and magnetic resonance angiography) that involve contiguous body parts within a family of codes. In the final rule, CMS indicates its intent to generally implement this reduction as proposed. However, to allow for a transition of the changes in payments for these services attributable to this reduction policy and to provide a further opportunity for comment, CMS has decided to phase-in the policy over two years.

We concurred with CMS’s proposal in August, and we support its adoption by CMS in the final rule. We also support CMS’s decision to phase-in the policy over a two-year period for the reasons cited by CMS. We continue to believe that CMS should consider applying a reduction to the professional component in such situations as well. Just as with the technical component, there are certain efficiencies when a physician is reading images of contiguous areas of the same patient on the same date. For instance, the interpreting physician only has to review the patient’s history once to know what he or she is seeking, and often, some portion of the scan is an overlap (i.e., a scan of the pelvis often includes a portion of an abdominal scan). Also, usually there is only one dictation for the multiple scans. Accordingly, there is less physician work involved than would be the case if the scans were interpreted independently at different points in time, and CMS should also consider applying the multiple procedure reduction to the professional component as it evaluates further comments on this policy.

As regards the codes in Addendum C of final rule, CMS indicates its intent to carrier price the new codes for moderate sedation services, which essentially replace the current codes for conscious sedation. CMS states, “We are uncertain whether the RUC assigned values are appropriate and have carrier priced these codes in order to gather information for utilization and proper pricing.” We appreciate CMS considering payment of sedation services not previously covered and understand this is an interim position. We request that you consider the following arguments in revising that position.

These new CPT codes (99143- 99150) were surveyed by several specialty societies in order to provide the RUC with data necessary to appropriately value the service. Codes were developed to simplify reporting these services into age specific categories. The RUC recommended values for these six codes were based on valid surveys and carefully vetted through the RUC process. We are confident in the accuracy of the values assigned. CMS has listed this service under Status Indicator C, carrier priced. We believe they should be listed with Status Indicator A with the actual RUC recommended relative values listed.

Providing moderate (conscious) sedation to patients undergoing certain out-patient procedures requires a certain level of provider skill and training, as well as medical legal liability, but is associated with greater patient satisfaction and improved outcomes and overall cost savings than if the same procedure were provided with anesthesia in an operating room.

As you know, CPT developed Appendix G to identify services in which sedation is an inherent part of the procedure. We firmly believe that any service performed that is not listed in Appendix G should be appropriately reimbursed when reported with moderate (conscious) sedation. There is significant additional cognitive skill required and this is reflected in JCAHO mandates addressing specific credentialing criteria for individuals providing moderate sedation. The work involved in providing sedation is not included in the assigned value for procedures not included in Appendix G, and we believe they should be adequately compensated.

For these reasons, we respectfully ask CMS to reconsider the decision to list the moderate sedation codes as carrier priced and instead publish the RUC approved RVUs and pay these services under the Medicare Physician Fee Schedule as Status Indicator A codes.

We would be remiss if we did not address CMS’s comments relative to the SGR and update in the conversion factor for 2006. As expected, CMS states in the final rule that the 2006 conversion factor for physician fee schedule services will be $36.1770. This is approximately 4.4% less than the 2005 conversion factor, and it is less than the conversion factor in 2000. We anticipate Congress will finalize the Deficit Reduction Act and implement a “freeze” in the conversion factor that will avoid the 4.4% decrease. Absent Congressional action, as CMS notes, the conversion factor is projected to decrease about 27% from 2006 to 2012, while the Medicare Economic Index (a measure of inflation in physicians’ costs) is projected to increase 19% over the same time period.

We understand that the formula behind the SGR is statutory in nature, which is why we and every other national medical specialty society are actively lobbying Congress to make the necessary changes. However, there are things CMS could do to help but chooses not do for reasons we do not find defensible. For instance, as we noted in our comments on the proposed rule, CMS could immediately remove, retroactive to the inception of the SGR, the physician-administered drugs from the SGR. Indeed, key members of Congress have told CMS they should do this. Yet, CMS has refused to do so. As CMS admits in the final rule, “retrospective removal of drugs from the SGR is statutorily difficult.” However, “difficult” is not “impossible” or “illegal. CMS believes it is “difficult” because the statute requires the estimated SGR to be refined twice based on actual data and CMS does not see a legal basis to re-estimate the SGR and allowed expenditures for a year after it has been estimated and revised twice. This may explain why CMS does not make the requested change back to the beginning of the SGR (although we don’t think so), but it does not explain why CMS continues to include physician-administered drugs in its estimated and revised SGRs, thus precluding (in CMS’s view) their removal later on. We know, as CMS notes, that removing drugs retroactively from the SGR will not result in a positive update for 2006 or the succeeding few years. But, it will ameliorate the reduction and make a long term, Congressional solution more affordable. We believe CMS should correct the problem, not continue to perpetuate it.

Recently, CMS proposed to link a portion of Medicare payments to “valid measures of quality and effective use of resources.” In this regard, CMS notes that in January 2006, it will start the process of collecting quality information on services provided by physicians in certain specialties and subspecialties through the voluntary reporting of G-codes for quality indicators.

We agree with CMS that “Medicare needs to encourage and reward efficiency and high quality care.” The AAFP has had substantial involvement in efforts to improve the quality of care, particularly through the Physician’s Consortium on Practice Improvement, the National Quality Forum (AAFP was the first medical specialty to join) and as a founder of the Ambulatory Care Quality Alliance. Additionally we spearheaded with the American Medical Association a framework for moving toward pay for performance in the Medicare program, a framework that was subsequently agreed to by many other specialties. Further, we provide our members with extensive information and resources related to quality improvement. These resources include our Practice Enhancement Program and METRIC (Measuring, Evaluating and Translating Research Into Care), an innovative online practice improvement program that allows members to earn continuing medical education credit in their office while improving patient care.

We have shared our initial concerns about the voluntary reporting program with CMS staff in face-to-face meetings and through separate correspondence, and we want to emphasize our efforts to work with CMS to craft a workable program. However, it is important that work on the voluntary reporting program neither distract nor detract from efforts to fundamentally solve the SGR problem, because allowing the payment rate to fall below what it was five years ago will neither encourage nor reward efficient and high quality care.

We appreciate this opportunity to comment on matters related to the Medicare Fee Schedule. As always, the American Academy of Family Physicians looks forward to working with CMS in its continued efforts to ensure access to appropriate physician services.

Sincerely,


Mary E. Frank, M.D., FAAFP
Board Chair