Congress stalls 5.1% Medicare physician payment cut, implements quality reporting

The last-minute legislation left concerns over how a 1.5% bonus payment for physician quality measures will be implemented.

Issue: January 1, 2007

ByErin L. Boyle

In an eleventh-hour vote before adjourning, the 109th Congress delayed a proposed 5.1% cut in Medicare physician payments for 1 year, according to the American Society of Cataract and Refractive Surgery.

The House passed the “Tax Relief and Health Care Act of 2006,” on Dec. 8. The Senate approved the bill on Dec. 9. (See related article)

The conversion factor will remain at the 2006 level of $37.8975, according to an ASCRS legislative update.

The bill also implemented a Medicare quality-reporting system for physician services, which is scheduled to take effect in the second half of 2007. The program will use quality measures from the Centers for Medicare and Medicaid Services’ Physician Voluntary Reporting Program, which includes eight ophthalmic measures.

Physicians who report on at least three of the quality measures in the second half of 2007 will be eligible to receive a bonus payment of 1.5% in 2008.

The bill established another reporting program for 2008, under which physicians will report on quality or structural measures, including those related to the use of health information technology, the ASCRS said. Yet another quality reporting program will require hospital OPDs and ASCs to comply with reporting requirements or face a 2% reduction in their updates, the ASCRS said.

Physician quality measures coming

Documents posted on the Web site of the House Ways and Means Committee summarize the Tax Relief and Health Care Act of 2006 (H.R. 6111). The documents make it clear that quality-reporting measures for physicians are part of a movement that is already under way in Medicare.

“In 2007, physicians would voluntarily submit three quality measures or more to qualify for the bonus incentive payment,” one document on physician payments states. “The bonus would then be calculated by an outside contractor and paid to the physician. The bulk of these quality measures have been developed and vetted through the physician community and are reported in a non-burdensome way through the submission of claims.”

Several documents make clear that Medicare already uses quality-reporting measures for paying many types of nonphysician health care providers, and physician payment is a planned next step.

“Several health care providers, including hospitals, dialysis facilities and nursing homes are already reporting quality measures,” the physician payment statement says. “The Centers for Medicare and Medicaid Services will then move toward properly aligning payment incentives to reward for the quality of care and not the quantity of care.”

One document is titled “Why Should Physicians be Treated Differently?”

“Since 2004, hospitals that do not report quality measures to CMS have had their inpatient payments cut,” the document says. “CMS has proposed doing the same for hospitals’ outpatient payments in 2009.”

The document lists the sectors that are subject to quality reporting, including skilled nursing facilities, hospices, durable medical equipment suppliers, clinical labs, oncology drugs, the Medicare Advantage plan and prescription drug plans.

Another item gives details on hospital outpatient and ASC quality-reporting measures.

“The (HHS) Secretary is to develop consensus-based quality measures applicable to outpatient departments and ASCs,” the document said. “Further, the Secretary has the discretion to adopt currently approved, consensus-based hospital inpatient quality measures that may be applicable to outpatient departments and ASCs, such as those measures involving the provision of antibiotics before and after surgery.”

These and other documents related to the Tax Relief and Health Care Act of 2006 can be read on the House Ways and Means Committee Web site: http://waysandmeans.house.gov/ResourceKits.asp?section=2544

A ‘short-term fix’

“While the rate freeze is welcomed, once again the important matters are not being repaired,” said ASCRS President Samuel Masket, MD, in the ASCRS Washington Watch Weekly after the legislation was passed. “I am concerned that a lame-duck Congress is acting precipitously to make a short-term fix that does not address the larger issues of the flawed sustainable growth rate [SGR] and a new reporting system that will be difficult to implement in just 6 months.”

The ASCRS has called for eliminating the SGR formula and implementing a “more predictable” cost-related payment system.

Physicians may face a cut of up to 10% in 2008 because the last-minute legislation did not change base payments beyond 2007, the release said.

The ASCRS also expressed concern about the physician quality-reporting program. The CMS and the Secretary of Health and Human Services will have the power to amend or change the quality measures “at their discretion” and add new measures that were not developed by physician specialties, the update said.

ASCRS officials plan to meet with members of Congress to discuss possible changes to the quality reporting programs.

Potential 10% payment cut

Nancey McCann, director of government relations for the ASCRS, said she still has concerns. “While we’re appreciative of Congress preventing the cut, we are concerned with what we are now facing. They just gave us a bonus payment, which is why we call it an accounting gimmick.”

She said the end-of-year legislation leaves unanswered questions.

“They’re moving to a quality-based reporting program, and they still haven’t resolved the SGR problem,” she said. “The reporting doesn’t start until July 2007 and it’s only through Dec. 31, 2007. … We can’t tell from the legislation whether it’s based on every claim you report on or if you agree to report on those procedures that have measures associated with them.

For more information:

Nancey McCann can be reached at ASCRS/ASOA, 400 Legato Road, Suite 700, Fairfax, VA 22033; 703-591-2220; fax: 703-591-0614; e-mail: nmccann@ASCRS.org.

Reference:

American Society of Cataract and Refractive Surgeons Legislative Alert and Washington Watch Weekly update can be read online at www.ascrs.org.

Matt Hasson is an OSN Staff Writer who covers all aspects of ophthalmology and focuses on regulatory, legislative and practice management topics.