CMS Proposes Rule to Increase Primary Care Payments

The AAFP strongly supports a proposed CMS rule (307-page PDF; About PDFs) that would increase Medicare payments for family physicians by 8 percent in 2010 via key changes to the Medicare physician fee schedule. (Editor's Note: CMS also published a correction to the proposed rule [2-page PDF; About PDFs].)

"This is outstanding," said AAFP President Ted Epperly, M.D., of Boise, Idaho, in an interview with AAFP News Now. "The proposed rule finally shows that the federal government is serious about making primary care and family physician practices stronger. It is about investing in the services of primary care and family physicians for what we do for the health care system and for the care of our patients."

CMS assigns relative values to CPT codes for medical, surgical and diagnostic services. These codes determine the level of payment medical professionals receive for providing such services. Under the proposed rule, CMS would no longer pay for nearly all consultation codes, which pay more than office visits billed under standard evaluation and management, or E/M, codes, although both represent essentially the same activities. CMS proposes using the savings generated by this change in payment policy to bolster payments for E/M codes.

The agency, which issued the proposed rule July 1, also would use more recent data to calculate practice expense relative values. This would result in higher payments for primary care services. In addition, CMS would revise malpractice CPT work values, thus triggering a further increase in payments for primary care physicians. If implemented, the changes suggested by CMS would result in an average increase of 8 percent in total Medicare allowed changes for family physician practices, according to impact analysis tables in the proposed rule.

CMS plans to publish the proposed rule in the July 13 Federal Register; the agency will accept public comments on the proposal through Aug. 31. The final rule will be published on Nov. 1 and would go into effect on Jan. 1, 2010.

"It is just a proposal right now," said Epperly. "CMS will gather feedback from all sorts of entities who will likely push back on this."

However, Epperly added, it is significant that CMS has put the proposed rule in writing at the same time that Congress is debating health care reform legislation. "It is an indicator of changes in the government that could favor primary care," said Epperly.

If enacted, the proposed rule would bolster family medicine practices while also "sending a very strong message to medical students about the viability and importance of primary care," Epperly told AAFP News Now.

By law, the CMS proposal has to be budget-neutral, and certain subspecialty groups, whose payments would be negatively affected by the proposed changes, oppose the proposed rule. For example, the American College of Cardiology, or ACC, describes the proposed rule as "a grave threat to cardiology practices and the patients they serve." The association has vowed to "wage an aggressive campaign to prevent implementation of these damaging policies."

"I would tell the subspecialists that 'We are all in this together for the good of taking care of patients,'" said Epperly. "What this proposed rule does is to help the primary care part of the equation become whole."

The rule is a significant step toward a more effective and efficient system that will enable primary care physicians to focus greater attention on wellness promotion and chronic disease management while also allowing subspecialists to concentrate on their areas of expertise, said Epperly. Health care problems that should be handled by primary care physicians "end up leaking into the offices of subspecialists" because the nation lacks an adequate primary care infrastructure, he added.

The CMS proposed rule also would eliminate physician-administered drugs from the sustainable growth rate, or SGR, formula. The removal of physician-administered drugs from the SGR formula paves the way for a long-term solution to Medicare physician payment problems because the action makes it less expensive to permanently fix the current formula.

"We applaud CMS' recognition that the SGR, on which Medicare bases physician payment, must be addressed," said Epperly in a prepared statement. "The administration has taken a first step by proposing to remove the cost of physician-administered medications. In doing so, CMS would end the practice of holding physicians accountable for costs they do not control."

The proposed rule also would make other changes to the Medicare physician fee schedule. For example, it would increase payment rates for the initial preventive physical exam, also known as the "Welcome to Medicare" visit, so they are more in line with payment rates for more complex services.

"Medicare patients often have multiple and complex health conditions, and this examination is essential to high-quality patient care," said Epperly. "It provides a baseline on which the physician and patient can build a plan of care that ensures prevention services and treatment options are tailored to the individual." However, he added, CMS often pays physicians less than the cost of providing the service.

The proposed rule also would revise the Physician Quality Reporting Initiative to help hasten the adoption of electronic health records.

"The incentives and reduced administrative burden in the proposal will enable more physicians to implement e-prescribing and electronic health records, which will help improve efficiency in the system and reduce the potential for medical errors, duplication of services and fragmentation of care," Epperly said.