There is still time to contact your US Congressmen and US Senators regarding the Medicare Physician Fee Schedule for the last half of 2008 and for the year of 2009,  As we all know, if Congress does not act, on July 1, 2008 the Medicare Physician Fee Schedule will decrease by 10.6%.  Now is the time to make contact by e-mail, phone or letter or even personal visit to a Representative’s local of Washington, D.C. office to urge you legislators to stop the draconian fee cut.       

On June 2, 2008, Senator Baucus of Montana (Chair of the Senate Finance Committee) distributed a document with senior health care staff in his office a new Medicare Physician Fee Schedule “fix”, which for simplification will be called the “Baucus plan”.  This plan:

• Blocks the 10.6% physician fee cuts to the fee schedule (SGR) through Dec. 31, 2009. 
• Provides for a 1.1 % positive update for 2009 as well as for the last 6 months of 2008. 
• Repeals the 2013 PAQI fund to offset costs of the fee fix and PQRI extension.  The PQRI program would be extended until Jan., 2011 and would increase the PQRI bonus from the current 1.5% to 2% for 2009 and 2010. 
• Extends the GPCI (Geographic Practice Cost Index) floor through Dec., 2009.  
• Would require the Secretary of HHS to submit a plan to Congress for physician value-based purchasing.   

One of the conclusions regarding Senate leaders’ thinking is that freezing or increasing Medicare payments to physicians appears to be inextricably linked to notions of “quality”—as exemplified in the PQRI process.  The Baucus Plan requires, except in very limited circumstances, that PQRI measures be endorsed by a consensus-based entity identified by the Secretary of HHS and that substantial funding is provided to that entity to develop and endorse increasing numbers of “quality measures”.  This plan also requires that “stakeholders”, i.e. physicians and physician groups, have the opportunity to provide input in the development and adoption of quality measures”.  The plan also requires the Secretary to provide confidential feedback to providers regarding their resource use. 

The plan also provides positive incentives for practitioners who use a qualified e-prescribing system in 2009 thru 2013.  The positive financial incentives are 2% for 2009 and 2010, 1% for 2011 and 2012 and 0.5% for 2013. The plan also requires practitioners to use qualified e-prescribing systems in 2011 and beyond.  This mandate will be enforced by reductions in payment to those who fail to e-prescribe, with the reductions for 2011, 2012 and 2013 and beyond being 1%, 1.5% and 2% respectively.  Both positive and negative incentives apply to all allowable Medicare charges.    

The Congressional Budget Office has yet to estimate the cost of Sen. Baucus’ bill, although Sen. Baucus stated in a meeting with physician representatives that his bill could cost just under $20 billion over 5 years.  Baucus alluded that Medicare Advantage Plan cuts were still the likely source to pay for the bill, although the White House has threatened to veto the bill if it includes such cuts.

The Republicans under the leadership of  Senator Charles Grassley (R-IA), Ranking Member of the Senate Finance Committee in the past few days proposed a nearly identical bill. In addition it extends the Section 1011 Undocumented Aliens program through 2010 at $200 million per year. 

Both proposals would have CMS apply budget neutrality requirements to the conversion factor when calculating payments – a change that would be beneficial for E/M codes and emergency medicine. The big difference is in how the legislation is paid for.  Baucus inflicts cuts on Medicare Advantage plans (something the White House opposes) and Grassley seeks funds elsewhere.