AAFP Reviews 2010 Medicare Physician Payment Schedule

In a frank letter to CMS Acting Administrator Charlene Frizzera, the Academy details what it likes and doesn't like about the agency's final rule on the 2010 Medicare physician fee schedule. CMS published the final rule in the Nov. 25 Federal Register (452-page PDF; About PDFs) and will accept public comments until Dec. 29.

According to a CMS press release, more than 1 million physicians and nonphysician health care professionals are paid under Medicare's fee schedule, and its rules cover more than 7,000 types of services in physician offices, hospitals and other health care settings.

In the Nov. 30 letter (6-page PDF; About PDFs), AAFP Board Chair Ted Epperly, M.D., of Boise, Idaho, says the fee schedule "demonstrates CMS' continued recognition that a high-quality, efficient health care system must rest on a foundation of primary medical care."

Epperly thanks CMS for recognizing that primary care physicians should get a pay raise, as well as for the agency's efforts to "help establish a foundation on which meaningful and sustainable health care system reform can be built."

Epperly says the AAFP supports several key policy changes in the rule that will improve payment for primary care physicians. Those proposals include

The Academy also is pleased with increases in work RVUs for new and established office visits and initial hospital and nursing facility visits.

"These policies will improve payment for primary care physicians," says Epperly, noting that FPs will see an estimated 4 percent increase in their Medicare allowed charges in 2010, all other things being equal.

"This will help ensure that all Americans have access to a personal physician who can ensure they get the right care at the right time in the right place," he adds.

Despite his praise for certain components of the fee schedule, Epperly parses no words when expressing the Academy's anger at the overall slashing of Medicare physician payments in 2010.

"Like our counterparts throughout the physician community, family physicians are outraged that the final rule must implement a 21.2 percent Medicare physician pay cut for 2010," says Epperly. He asks Congress to permanently address the flawed sustainable growth rate, or SGR, formula on which Medicare physician payment is based "before these drastic payment cuts go into effect on Jan. 1, 2010."

Epperly commends CMS for revising incentives for electronic prescribing and the Physician Quality Reporting Initiative, or PQRI, saying the improvements will encourage physicians to adopt electronic health records. But he also points out the flaws in the programs and advises CMS to monitor the programs and "correct their shortcomings rapidly."

In particular, the "AAFP has serious concerns about the PQRI's technical effectiveness and data accuracies," says Epperly.

In addition, the Academy does not favor mandatory physician participation in specialty-specific cost data collection efforts, such as cost surveys or cost reports. Rather, the Academy "supports practice expense RVUs that are based on the actual resources, both direct and indirect, which physicians use to provide services," says Epperly.

"Unless CMS is prepared to pay physicians on the basis of their actual practice costs, we see no reason to require physicians to submit cost reports to Medicare," he adds.

Epperly touches on Medicare physician payment for telehealth services, home health services, and motor and sensory nerve conduction studies. He also discusses payment for H1N1 vaccine administration, including CMS' creation of a special "G" code, G9141, to cover administration of the vaccine to Medicare beneficiaries.

The Academy prefers that CMS delete the "G" code, says Epperly, and instead use CPT code 90470. The CPT code was created by the CPT editorial panel and pays physicians a higher rate for administering the H1N1 vaccine than does Medicare's G9141 code.

"Duplicate codes make no sense and are an administrative hassle for our members," he adds.

Epperly notes the Academy's support for CMS' proposal to remove physician-administered drugs from the calculation of allowed and actual expenditures as it sets the 2010 conversion factor, and he commends CMS for finalizing its proposal to remove drugs from the calculation of the SGR beginning with 2010.

The action "will help reduce the cost of a permanent fix to the problem posed by the SGR," says Epperly, and it will make a positive update in the fee schedule conversion factor "far more likely in the future."