ACS Views on Legislative, Regulatory, and Other Issues
Medicare Physician Fee Schedule for 2004—
December 22, 2003
The Acting Administrator
Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-1476-FC
Room 445-G
Hubert H. Humphrey Building
200 Independence Avenue, S.W.
Washington, D.C. 20201
RE: CMS-1476-FC: Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2004
Dear Acting Administrator:
On behalf of the 64,000 Fellows of the American College of Surgeons, the following comments are submitted in response to the final rule on Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2004 published in the November 7, 2003 Federal Register. The College addresses the following provisions of the final rule:
- The Medicare Physician Fee Schedule Update. Specifically, we are interested in making permanent changes to the Medicare update formula that would result in a more accurate estimate of the growth in physician spending.
- The change in the Medicare Economic Index (MEI) for professional liability insurance and our concerns with the limited scope of this proposal.
- Related comments about the medical liability insurance portion of the Geographic Practice Cost Indexes (GPCIs).
- Refinement of practice expense inputs
- Issues related to several Centers for Medicare and Medicaid Services (CMS) coding proposals
Calendar Year 2004 Physician Fee Schedule Conversion Factor and Update
The College is extremely pleased that Congress recognized the urgency of providing an update for Medicare physician payments that better reflects the actual increases in practice costs that physicians are experiencing. H.R 1, the Prescription Drug and Medicare Modernization Act, which passed the House of Representatives and Senate and was signed into law by President Bush, ensures a positive increase of at least 1.5 percent in the update for services provided by physicians in 2004 and 2005. Without this legislative intervention, the fatally flawed sustainable growth rate would have produced a negative update of –4.5 percent for physician services performed in 2004. We are pleased to hear from CMS officials that the agency is fully prepared to implement the legislative changes to the Medicare Fee Schedule effective January 1, 2004.
While Congress' action to provide for a positive increase in the update to physician payments for the next two years helps to stave off the reimbursement crisis that threatens the stability of the Medicare program, it is absolutely vital that Congress and CMS produce a permanent solution to fix the problems with the physician update formula. The fatally flawed sustainable growth rate (SGR) formula is tied to the growth in the Gross Domestic Product (GDP) and other factors that are beyond physicians' control. This patently unfair formula imposes limitations on the growth in Medicare physician fee payments that no other sector of health care faces. The formula has been producing negative updates over the last several years, despite the double-digit annual increases in health care inflation.
The College has been grateful to CMS for its recognition of the problems that exist with the physician update formula. While we strongly disagree with CMS' position that it does not have the statutory authority to make some of the changes necessary to achieve fair Medicare Fee Schedule updates, we nonetheless appreciate the attention the agency has given to this issue and hope that we can work together with Congress and CMS in the upcoming year to produce a permanent solution.
Professional Liability Insurance: Malpractice Geographical Practice Cost Indexes (GPCIs)
Because of, in CMS' view, the volatility of malpractice premium data that was evident in the data collected, CMS announced in the final rule that it has decided to apply a modulating factor of .5 to the changes in the malpractice GPCIs. We understand that, by statute, if more than one year has elapsed since the date of the last geographic adjustment that CMS must phase in the adjustment over 2 years, implementing only one-half of any adjustment the first year and the other half of the adjustment the second year. However, we are surprised by the addition of the modulating factor which reduces the difference between the new and previous GPCIs by 50 percent. This was not presented in the proposed rule and, although these are considered interim values, the 2004 adjustment will be implemented for the 2004 Medicare Fee schedule and only the 2005 adjustment will be truly subject to change prior to implementation.
We question whether the variation in malpractice reimbursement between localities would be so great as to warrant the 50 percent reduction CMS will be implementing. This is particularly true considering the small percentage of RVUs that are applied to the malpractice component of the Medicare Physician Fee Schedule. Certainly, the physicians in the localities that will be retaining some of the reimbursement this provision will provide are in dire need of this incremental help, so we are hesitant to protest. However, those localities that have seen a dramatic increase in professional liability insurance costs over the last several years, as reflected in the data CMS has utilized, also need relief from their burgeoning expenses. That said, we believe this issue is dwarfed by the need for more global reform to the malpractice component of the fee schedule, as we discuss later in our comments.
At the September 2004 meeting of the American Medical Association Specialty Society Relative Value Scale Update Committee (RUC) meeting, the RUC requested that CMS work with the Committee's Professional Liability Workgroup to explore the utilization of premium data that might be collected by the RUC. We appreciate CMS' willingness to work with the RUC to obtain more current professional liability premium data. We also applaud CMS' plans to undertake annually the collection of malpractice premium data, starting in early 2004 with the collection of 2003 premium data. If the data suggest that a re-scaling is warranted, it is appropriate that CMS revise the data more than the once every three years, the minimum required by statute.
Professional Liability Insurance (PLI): Rebasing and Revising the Medical Economic Index (MEI)
As noted in our comments to the proposed rule, the College supports CMS' decision to rebase and revise the MEI to better reflect the proportion of total RVUs attributable to work, practice expense and malpractice components. CMS has decided to adjust the work, practice expense and malpractice RVUs to match the new MEI weights. CMS states in the final rule that it believes the statute is clear that any increase in the malpractice RVUs must be offset by decreases to the work and practice expense RVUs or the conversion factor to ensure that the adjustments do not increase or decrease Medicare expenditures by more than $20 million. This will result in a reduction of the work RVUs by .57 percent (.9943), the practice expense RVUs by .77 percent (.9923) and an increase in the malpractice RVUs by 19.86 percent (1.1986).
The College believes that making adjustments to the work and practice expense components in order to offset increases in the liability component compromises the integrity of the RVUs established through the RUC and Practice Expense Advisory Committee (PEAC) processes. Furthermore, without injecting new Medicare money into the Physician Fee Schedule, the budget neutrality requirement essentially causes total payments for physicians to remain static, with some slight increases and decreases in the total RVUs for some codes, but without offering any real relief from the escalating liability costs that physicians are facing with ever-increasing severity.
CMS has again failed to engage in a meaningful discussion of the proposals the College and other medical specialty organizations have presented to confront the professional liability crisis. We are disappointed that CMS did not announce its intentions to begin the five-year review of PLI RVUs in the final rule. While the skyrocketing of premiums is deleterious to all of medicine and threatens patients' access to care, its impact on surgery and surgical patients is crippling, particularly for high-risk specialty care. We outlined a number of proposals in our comments to the proposed rule that we believe will help to address the liability problem. We strongly encourage CMS to immediately begin addressing this issue and would be glad to further discuss our proposals at any time.
Practice Expense
The College would like to thank CMS for revising the CPEP database to reflect the suggested corrections we submitted for supply inputs for a handful of general surgery codes. We would also like to reiterate our gratitude to CMS for developing supply categories, consolidating and standardizing the item descriptions, and repricing the supplies in the clinical practice expense input database. These efforts were an immense undertaking and will certainly facilitate greater accuracy and consistency in the PEAC's development of direct practice expense inputs.
In the final rule, CMS responds to a request by the transplant surgeons to retain the current clinical staff times and assign a registered nurse (RN) as staff type to a number of transplant services to which the PEAC-approved 90-day global standard for clinical staff times and staff blend have been applied. The College strongly agrees that these transplant procedures would require higher-skilled clinical staff than the default staff mix and significant pre-service clinical staff time. We appreciate CMS' suggestion to revert to the current CPEP inputs for these codes on an interim basis and to have the American Society of Transplant Surgeons present these codes to the PEAC to ensure multi-specialty review.
Coding Proposals: Payment Policy for Current Procedural Terminology (CPT) Tracking Codes
In the final rule, CMS indicates it plans to move ahead with the establishment of national payment amounts for certain Category III codes, otherwise known as CPT tracking codes, when it believes there is a significant programmatic need to do so. This is a departure from current policy in which carriers have discretion on coverage and payment of Category III codes, unless CMS has made a national coverage determination (NCD).
As outlined in our comments on the proposed rule, we believe creation of a national payment level for tracking codes presents several dangers. We maintain that it will be difficult for CMS to determine accurate RVUs for codes describing emerging technologies that are in their early stages of development and have not been widely adopted into clinical practice. With the chances of errors high, we are concerned that once RVUs are published they will become a source of bias under any future surveys. Finally, the potential for harm associated with the adoption of inappropriate RVUs by other payers is very high and should be avoided.
With these concerns in mind, for those Category III codes for which CMS plans to create national payment amounts, we strongly encourage the agency to first seek the input of the relevant specialty societies and the RUC and then allow public comments on the pricing, as CMS has indicated it would do in the final rule.
Coding Proposals: Excision of Benign and Malignant Lesions
While the College appreciates CMS' final decision to assign the work values approved by the RUC to the codes describing excision of benign and malignant lesions, we note that the final rule establishes these values as interim and creates the opportunity for specialties to resurvey these services. Although CMS reiterated its position in the final rule that physician work for the excision of benign and malignant services is sufficiently similar to warrant the same work RVUs, CMS' rationale for this judgment remains unclear to us. Based on the lack of information on the reasoning behind CMS' original proposal, it is again difficult for us to respond to CMS' conclusion that physician work is the same for the benign and malignant services. The Integumentary Workgroup for the AMA CPT Editorial Panel that developed the CPT codes firmly agreed that the benign and malignant lesions should be retained as two distinct code groups, as opposed to creating codes based only on excised diameter. The RUC workgroup, which included representatives from dermatology, plastic surgery, orthopedic surgery, otolaryngology, urology, and general surgery, agreed with this approach and produced recommended values based on a rationale that was accepted by the entire RUC.
We also remain opposed to CMS' decision to have specialties that perform these services resurvey the 36 codes as a matter of process. As we noted in our comments to the proposed rule, CMS clearly states in the January 31, 2002 Federal Register that it agreed with the RUC's recommendation for the 36 excision codes. These initial values approved by the RUC were included in the final 2003 fee schedule as interim. Again, we are not aware of any comments submitted to CMS that objected to the acceptance of these values. If CMS maintains that resurveying these codes is necessary, it should follow its own established process and ask that the work values be brought forth during the next Five-Year Review and provide a rationale for examining these codes.
Because the wide excision codes are included in Addendum C, "Codes with Interim RVUs," in the final rule and are again subject to public comment, we have included as an attachment the recommendations of the multi-specialty panel that developed the relative values that were previously submitted to and approved by the RUC.
Coding Proposals: Create G Codes for Monitoring Heart Rhythms
We are pleased that CMS has responded to the concerns raised by the College and other specialties in regards to creating Healthcare Common Procedure Coding System (HCPCS) G codes for monitoring heart rhythms in the home setting. CMS states that it has withdrawn its proposal to ensure that any HCPCS codes developed encompass the various technologies that are being utilized for such monitoring. The College applauds this decision and again urges CMS to follow the established CPT Editorial Panel process for developing new codes and the RUC for assigning work and practice expense values.
Coding Proposals: Create G Codes for Dialysis Patient
The College is disappointed that CMS is proceeding with the establishment of new codes for the management of dialysis patients, despite protestations from medical societies that this violates the existing process for establishing and valuing new codes. The creation of these G codes circumvents an existing code set and has not had the benefit of a thorough cross-specialty review. We note that the values are interim and that CMS states in the final rule that it plans to seek the advice of the RUC in evaluating these codes once implemented. The College hopes that it will have the opportunity to participate in this evaluation as a CPT Editorial Panel and RUC participant.
Deep Brain Stimulation Codes
CMS consistently accepts the majority of the recommendations by the RUC. The College values CMS' responsiveness to the physician community and thanks the agency for its continued involvement in the RUC and acceptance of the overwhelming majority of that body's recommendations. We do, however, have some concerns about the rejection of the RUC's recommendations for new CPT codes 61863, Twist drill, burr hole, craniotomy, or craniectomy with stereotactic implantation of neurostimulator electrode array in subcortical site (eg, thalamus, globus pallidus, subthalamic nucleus, periventricular, periaqueductal gray), without use of intraoperative microelectrode recording; first array, and 61867, Twist drill, burr hole, craniotomy, or craniectomy with stereotactic implantation of neurostimulator electrode array in subcortical site (eg, thalamus, globus pallidus, subthalamic nucleus, periventricular, periaqueductal gray), with use of intraoperative microelectrode recording; first array.
Several years ago the RUC reviewed CPT code 61862, Twist drill, burr hole, craniotomy, or craniectomy for stereotactic implantation of one neurostimulator array in subcortical site (eg, thalamus, globus pallidus, subthalamic nucleus, periventricular, periaqueductal gray, the code that the two new brain stimulation codes replaced, and recommended an RVW of 27.34. At that time, CMS erroneously believed that neurosurgeons were not providing measurable work during the microelectrode recording phase of the procedure and, accordingly, reduced the work value to 19.34. After further review, CMS staff agreed that neurosurgeons do perform measurable work during this phase and recommended that neurosurgery split the code into two codes.
The RUC approved a Relative Work Value (RVW) of 19.0 for CPT code 61863 and an RVW of 31.34 for CPT code 61867 at the April 2003 RUC meeting. However, in the final rule CMS has assigned an RWV of 13.92 for 61863 and an RVW of 22.96 for 61867. CMS states that it has reduced the work values for the two new codes to achieve budget neutrality, based on the value of CPT code 61862 which previously represented the work of the two new codes. This is inconsistent with CMS' stated acceptance that CPT 61862 is undervalued by 9 RVUs and should have the value originally approved by the RUC. The College is concerned that valuing these codes as CMS has done will create serious rank order anomalies within the family of neurostimulator codes and fails to capture the work that is being performed by the physician for these services. We therefore ask that CMS restore the RUC approved values for CPT codes 61863 and 61867.
Conclusion
We would again like to express our appreciation to CMS for its extensive work on the refinement of practice expense inputs and for accepting the majority of RUC's recommendations for valuing new and revised codes. We hope CMS will consider our comments on those coding proposals for which we have raised concerns and that further opportunity for input will be available as CMS continues to work on those issues.
Our major concerns with the final rule relate to the limited scope of the proposed changes to malpractice component and the lack of a permanent solution to the problems presented by the physician update formula. Without immediate intervention by Congress and CMS, the liability crisis will only worsen and continue to threaten to a greater degree the stability of our health care system. Additional action is needed to fix the fatally flawed update formula and replace it with an annual update system like those of other provider groups so that physician payment rates will better reflect actual increases in practice costs. Again, we hope that the College and the rest of the physician community will be able to work with Congress and CMS in the upcoming year to address these problems.
Sincerely,
Thomas R. Russell, MD, FACS
Executive Director
ACS Views on Legislative, Regulatory, and Other Issues
Advocacy and Health Policy
This page and all contents are Copyright © 2003-2006
by the American College of Surgeons, Chicago, IL 60611-3211
|
