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Am Fam Physician. 2007;75(9):1293-1294

Report Examines Federal Perceptions of Sustainable Growth Rate Formula

Congress might not reform the sustainable growth rate (SGR) formula used to determine physician payment rates under Medicare for at least another two years, even though congressional staff members believe the current system is not economically or politically feasible, according to a preliminary study report. Brian Laing, a visiting scholar at the American Academy of Family Physicians' (AAFP's) Robert Graham Center in Washington, D.C., evaluated the views of key congressional staff members and federal agency employees on physician payment and primary care. According to Laing, Congress has to spend about $4 billion each year to “patch” problems created by using a Medicare fee schedule based on the SGR. But the cost of replacing the SGR with a more accurate index is considered prohibitive—at least $300 billion during the next 10 years, said Laing. As a result, Congress may not be willing to address the issue until after the 2008 presidential election or until it is clear that use of the SGR-based formula is adversely affecting patients. For more information, visit

Organizations Tell CMS That Volunteer Preceptor Rule Needs Revision

A proposed regulation by the Centers for Medicare and Medicaid Services (CMS) goes against the agency's definition of a key term governing direct graduate medical education (DGME) and indirect graduate medical education (IME) payments to hospitals that send residents to community-based preceptors, according to a letter from the AAFP, the Society of Teachers of Family Medicine, the Association of Family Medicine Residency Directors, and other organizations. The groups call for dropping the CMS requirement that teaching hospitals pay volunteer preceptors for the time they spend teaching residents. If CMS cannot comply with the request, the organizations urge the agency to alter the proposed regulation to be consistent with other Medicare-related rules. The current IME and DGME proposal stipulates that hospitals must pay “all or substantially all”—defined in the proposal as 90 percent—of the costs associated with teaching residents in community settings. However, CMS uses a 75 percent threshold as the definition of “substantially all” in Medicare's regulatory language implementing the Stark Rule, which bans Medicare payment for services when a physician refers care to an entity in which the physician or his or her family members have a financial interest. For more information, visit

CMS Extends Deadline for Use of National Provider Identifiers

CMS has extended the May 23 deadline that had been set for family physicians and all other covered entities to begin using National Provider Identifiers (NPIs) on health insurance claims. According to CMS, covered entities that have shown a good faith effort to comply with the NPI provisions will have up to 12 months to implement a contingency plan that could include accepting legacy provider identifiers, also known as Unique Physician Identification Numbers. The NPI, which was instituted as part of the Health Insurance Portability and Accountability Act of 1996, is a 10-digit identifier designed by CMS to give each health care provider a single, unique identifying number that doesn't change or expire. Physicians not in compliance by the original deadline were facing delays and possible claim rejections. CMS extended the deadline when it became clear that many covered entities would not meet the original deadline, but says that contingency plans cannot extend past May 23, 2008. For more information, visit, or

Colorado Bill Requires Transparency in Health Insurers' Contracts

Contracts with health insurance companies will become more understandable for Colorado family physicians under legislation passed by the Colorado General Assembly and signed into law by Gov. Bill Ritter. The legislation creates standardized language in contracts between physicians and health insurance companies. It also requires payers to disclose their payment terms in plain language, the duration of the contract, the identity of the person responsible for processing the physician's claims, and the mechanism to resolve disputes. In addition, the legislation calls on payers to define the manner of payment, such as fee-for-service, capitation, or risk-sharing; to describe the method used to calculate fees, such as relative value unit, percentage of Medicare payment, or percentage of billed charges; and to provide the fee schedule for codes reasonably expected to be billed by physicians under the contract and, on request, for other codes that may be used by physicians. For more information, visit

CMS to End Medicaid Restrictions on Coverage of Newborns

Under an interim final rule, Medicaid now will automatically deem a newborn eligible for one year of coverage if emergency Medicaid covered the mother's labor and delivery, according to CMS. The new regulation will allow babies whose deliveries are covered by Medicaid to remain eligible, under certain circumstances, for Medicaid coverage for up to a year after their birth. The new rule revises the current regulation, which denies Medicaid coverage to newborns unless their immigrant parents can prove the child's U.S. citizenship, identity, and eligibility for the program. For more information, visit, or

CCHIT Approves New Criteria for Ambulatory EHR Certification

The Certification Commission for Healthcare Information Technology (CCHIT) announced unanimous approval of new criteria for office-based electronic health records (EHRs). Newly approved key criteria for choosing an EHR system that are important to family physicians include the ability of the system to send prescriptions and refills to pharmacies and to electronically receive standards-based lab results. The federal government recognizes CCHIT, an independent, nonprofit organization, as an official certification body for EHR products. Health IT vendors whose products meet CCHIT standards can label their products as CCHIT certified. For more information, visit

Internists Survey Shows Support for P4P, Opposition for Public Reporting

Results from a national survey designed to gauge physician support for pay-for-performance (P4P) programs and public reporting of quality scores found that general internists support the use of financial incentives to improve patient care, but they oppose public reporting and are concerned about unintended consequences. “General Internists' Views on Pay-for-Performance and Public Reporting of Quality Scores” appears in the March/April Health Affairs. Researchers found that many of the 556 responding physicians lacked confidence in the development of fair and accurate quality indicators and feared that flawed quality assessments would prompt physicians to avoid high-risk patients. Nearly 75 percent of respondents wanted physicians to receive financial incentives for accurate quality measures. About 30 percent of respondents supported public reporting of individual physicians' quality scores, but 45 percent supported reporting medical groups' quality performance. In addition, only 30 percent of respondents considered 2005 quality measures to be accurate. For more information, visit, or

Medicare Requires Nine-Digit ZIP Codes to Process Claims

Beginning October 1, nine-digit ZIP codes will be required for 32 states on the portion of the Medicare physician claim form that indicates the geographic location where health care service was rendered. Claims lacking the full nine-digit ZIP code will not be processed. A full explanation of the change and a chart of ZIP codes appear in the March 9 MedLearn Matters. Medicare reimbursement is based on the geographic location where the service was provided, and that location is derived from U.S. Postal Service ZIP codes. Some ZIP codes cover more than one payment locality, so services provided in one county may be assigned to another county. Use of the nine-digit ZIP code in those instances will help ensure timely and accurate payment. For more information, visit, or

Many Prescription Sleep Medications to Carry Stronger Warnings

Cases of anaphylaxis, angioedema, and complex sleep-related behaviors (e.g., driving, telephoning, or eating while asleep) prompted the U.S. Food and Drug Administration (FDA) to request all manufacturers of sedative-hypnotic drugs to add stronger language to their product labeling regarding possible risks. The FDA also requested that manufacturers develop patient medication guides, which inform patients about the risks of their medications and precautions that should be taken when using them, to be handed out when the medications are dispensed. The FDA also recommended that manufacturers conduct clinical studies to investigate the incidence of complex sleep-related behaviors associated with each drug. For more information and a list of affected medications, visit, or


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