AAFP Comments on 2010 Medicare Physician Fee Schedule, Urges Members to Add Their Voices

A proposed rule that would alter the 2010 Medicare physician fee schedule in favor of family physician services has resulted in commendation from the Academy. The AAFP is "grateful for the recognition of and support for the value of primary care represented by several key policy changes proposed in this rule," said AAFP Board Chair Jim King, M.D., of Selmer, Tenn., in an 18-page letter (27-page PDF; About PDFs) to CMS Acting Administrator Charlene Frizzera.

Such recognition "is an appropriate and long-overdue acknowledgement of the role primary care plays in our nation's health care delivery system and the Medicare program in particular," said King in response to the CMS fee schedule, which was published in the July 13 Federal Register. (307-page PDF; About PDFs)

Of great interest to the AAFP is CMS' proposal to remove physician-administered drugs from the definition of "physicians' services." That definition is used to compute the sustainable growth rate, or SGR, formula, which determines physician fees. It also is used to calculate the levels of allowed expenditures and actual expenditures, said King.

"From an AAFP perspective, drugs that are not paid for by the Medicare physician fee schedule do not belong in the formula to determine the fee schedule rates," noted King. He added, however, that although Medicare physicians would benefit from CMS' proposal, it would not fix the underlying problem created by using the SGR.

CMS has said that family physicians likely would see an 8 percent increase in Medicare-allowed charges in 2010 based on proposals in the rule. However, King pointed out that all Medicare physicians would see their payment rates drop by 21.5 percent -- a net 13.5 percent decrease for FPs -- unless Congress takes action to stop a negative update in the SGR formula.

King encouraged CMS to "continue to work with Congress to avert what would be a disastrous reduction in Medicare physician fees if the negative 21.5 percent update in the conversation factor were allowed to occur."

King praised CMS' proposal to eliminate use of all consultation codes, except G-codes related to consultation via telemedicine, as of Jan. 1. At the same time, CMS would increase the work relative value units, or RVUs, for new and established office visits and for initial hospital and nursing facility visits.

"AAFP supports the appropriate valuation of all services" paid under Medicare, said King. "As noted in the proposed rule, the distinction between consultations and other E/M (evaluation and management) services has become increasingly blurry over time, leading to significant misuse of the consultation codes.

"We support CMS' proposal to eliminate the use of consultation codes and make budget neutral adjustments to shift the difference in RVUs to other E/M services done in the same setting."

The AAFP also supports a recommendation from the Medicare Payment Advisory Commission, or MedPAC, that CMS establish a group of experts separate from the AMA's Relative Value Scale Update Committee, or RUC, to help CMS review RVUs.

"We recommend that CMS examine in-depth and issue a report on the process by which RVUs are established, reviewed and adjusted under the Medicare physician fee schedule," said King.

MedPAC, the AMA and others "have observed that CMS routinely accepts 90 percent or more of the RUC's recommendations with respect to RVUs," said King. He added that CMS has never critically examined the process by which the RUC generates those recommendations.

"We believe that after 16 years of relying on the RUC process, CMS is overdue for an examination of the matter," said King. He also urged CMS to ask for transparency in the RUC voting process.

King also said the Academy supports CMS' proposal to use data from the Physician Practice Information Survey, or PPIS, to update practice expense data. Currently, CMS relies on a combination of data supplied by the AMA's socioeconomic monitoring system, or SMS, and data supplied by selected specialties.

"The SMS data currently used by CMS is at least 10 years old and represents practice costs from 1995 to 1999, which does not account for the increased costs practices now face," said King. In addition, the AMA's system only contains data for 26 physician specialties and no nonphysician practitioners.

"The PPIS represents the best currently available data source on physician practice expenses," said King, and its use will update all providers at the same time.

Other topic areas addressed in King's letter include the AAFP's support for CMS' proposals to

King enclosed copies of the AAFP's policies on performance measures criteria, physician profiling, data stewardship and transparency as further background for CMS to consider as it reviews the Academy's positions.

In closing, King thanked CMS for its work on the proposed rule. "It is clear to us that this administration has proposed bold steps toward aligning incentives by adjusting relative values and bringing a degree of rationality to the payment formula," he said.