A new proposal from the Centers for Medicare and Medicaid Services could result in a better bottom line next year for physicians who spend a lot of time on evaluation and management services but is expected to mean a slight cut in payments for cardiologists.
CMS officials are seeking to increase the work component for relative value units (RVUs) for a number of evaluation and management service codes. For example, Medicare is proposing to increase the work RVUs for the commonly used established office visit codes 99213 and 99214. The proposed changes, which are the result of a mandatory 5-year review by the CMS, would take effect in January 2007.
The proposed rule, issued on June 29, also calls for changes in the practice expense methodology that would involve the use of practice expense survey data from eight specialties, including cardiology, to better calculate the costs incurred by physicians. These changes would begin in January but would be phased in over 4 years.
To pay for the proposed increases in reimbursement, the CMS is required to impose across-the-board cuts in work RVUs. This could mean payment cuts for physicians who provide fewer evaluation and management services.
Moreover, the expected increase for primary care physicians could be offset by the end of the year if physicians are unable to get a temporary fix to the sustainable growth rate formula, which is expected to cut physician payments under Medicare by nearly 5%.
“The CMS proposal reinforces the urgent need for Congress to act to stop the Medicare physician payment cuts and ensure that payments keep up to practice costs,” Dr. Cecil Wilson, AMA board chair, said in a statement.
For cardiologists, CMS estimates that there will be a 1% drop in allowed Medicare charges in 2007 based on the combined impact of the work and practice expense RVU changes. By 2010, when the practice expensive methodology changes are fully implemented, the cut will be about 4% compared with allowed charges in 2006.
This proposed cut will mean that physicians will put off acquiring new technology such as electronic medical records and that they will be looking for ways to cut costs, said Dr. James Blankenship, who serves as the American College of Cardiology representative on the Relative Value Update Committee (RUC) of the American Medical Association. The RUC is a 29-member multispecialty committee that makes recommendations to the CMS annually on payment issues.
However, the impact could be more dramatic if cuts are coupled with the planned 4.6% Medicare payment cut that all physicians are expected to face at the beginning of 2007 if changes are not made to the Sustainable Growth Rate formula. In addition, under the Deficit Reduction Act of 2005, physicians who perform imaging services in their offices are facing additional payment cuts under Medicare. If all of these cuts go into effect, cardiologists may consider early retirement and Medicare patients may face decreased access, Dr. Blankenship said.
Despite the gloomy outlook for Medicare payments in 2007, things could have been worse, Dr. Blankenship said. Without the ACC commissioned survey of cardiologist practice expenses, which is being used by CMS in determining payments, the cuts could have been even deeper, he said.
The CMS proposal was praised by primary care groups, which stand to benefit from the changes. Dr. J. Leonard Lichtenfeld said the proposed changes to evaluation and management services would help address the underfunding of primary care. Dr. Lichtenfeld, a medical oncologist, is the American College of Physicians' representative on the RUC.
But although these changes go a long way in helping struggling physicians, it's not a complete solution, Dr. Lichtenfeld said, because it doesn't solve the underlying problem of inadequate funds in Medicare.
“Someone's got to be there to be the captain of the ship,” he said.
Primary care physicians aren't the only ones who will benefit from the increases for evaluation and management codes, he noted. Surgeons will see some benefit because of increases for surgical postoperative care, as well as physicians in cognitive specialties such as neurology, he said.
For Dr. Douglas Leahy, an alternate delegate to the RUC for the ACP and a general internist, the proposed increases would mean the chance to spend more time with patients. Dr. Leahy, who works in a large multispecialty practice in Knoxville, Tenn., said that with better reimbursement for evaluation and management services, he could devote more time to important areas such as diabetes prevention or counseling family members of an Alzheimer's patient.
Although the increased payments for evaluation and management services and surgical postoperative care are needed, they are accompanied by an average 5% across-the-board cut in payments, according to the AMA.