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. 

The following article recently came out from Leah S. Cohen, a MGMA Government Affairs Representative:

The Centers for Medicare and Medicaid Services (CMS) May 16 announced that beginning Jan. 1, 2009, it will launch a three-year Acute Care Episode (ACE) demonstration project that will include bundling Medicare payments to hospitals and physicians into a single payment.

The demonstration is limited to applicants from Texas, Oklahoma, New Mexico, and Colorado. CMS will competitively award only one ACE demonstration site per market area (defined as a metropolitan core-based statistical area, or the aggregate of rural areas within a state) during the first year of the demonstration, but plans to expand the program and award multiple providers within a market area in the following two years.

The new demonstration program is designed to test the use of a bundled payment for an episode of care and is part of CMS's ongoing effort to improve the quality and efficiency of the Medicare fee-for-service program. CMS defines an "episode of care" as both hospital and physician services furnished to a patient during an inpatient stay. Under the ACE demo, hospitals and physicians that provide services to a patient during an inpatient stay will receive a single "bundled" payment for those services. Currently, under the inpatient prospective payment system (IPPS), CMS makes a single payment to hospitals for all services furnished during an inpatient stay. CMS makes separate payments through the Medicare Physician Fee Schedule for each service the physician provides during the same stay.

According to CMS, the "separate payment systems can lead to conflicting incentives that may affect decisions about what care will be provided," and the purpose of the demonstration is "to better align the incentives for both types of providers…. [and to] test the effect that transparent price and quality information has on beneficiary choice and provider referrals for select inpatient care."

While this particular “demonstration” will only encompass chosen cardiac and orthopedic surgical services, the message here is very clear. The government has long sought to make a single payment for hospital services and has begun moving on several fronts, including developing services areas that combine both Part A and Part B into the new Carrier MACs.

At the recent EDPMA Solutions Summit, Dr. Sue Nezda, an emergency physician formerly with CMS and currently working with the AMA, outlined her perspective of the future for Emergency Medicine:

1. P4P for Emergency physicians will likely be tied in the future to reporting of the hospital Core Measures while are already closely aligned to ED appropriate measures. She feels it is critical that groups from strong relationship and interactions with their hospitals including participating on key hospital committees.
2. Practice measures are constantly being developed and help to provide more consistent and usually better patient care.
3. CMS’ Value-Based Purchasing Initiatives that eliminate payments for Hospital-Acquired Conditions and the Present on Admission Indicators will change the way patients are evaluated and tested in the ED prior to admissions. 
• Catheter Associated Urinary Tract Infection (must evaluate criteria for placing Foley Catheters)
• Pressure Ulcers
• Vascular Catheter Associated Infections
• Falls and Trauma (may require a mental status evaluation in the ED)
4. Many hospitals, concerned about public image (in several markets the federal government is current paying to advertise their “hospital compare” website to the public) have already begun to tie physician core measure performance with contract retention.
5. CMS has proposed HAC Expansion for 2009 that includes:
• Surgical Site Infections
• Legionnaire’s Disease
• Glycemic Control
• Iatrogenic Pneumothorax
• Delirium (may require a mental status evaluation in the ED)
• Ventilator Associated Pneumonia
• Staphylococcus aureus Septicemia
• Deep Vein Thrombosis/Pulmonary (might result in hospitals requiring Ultrasound Dopplars’ be done on all older patients)
6. ED groups that are not participating in hospital quality committees and “at the table” when these programs and criteria are being set will be left out of the decision making.
7. Family practice physicians are advocating for a national policy that provides a “medical home” for all patients. According to ACEP, after querying the Family practice organization, there is currently no payment methodology established in this plan to cover Emergency visits. Dr. Nezda thinks it is essential that ED physician groups form on-going relationships with Primary Care groups in their service area.
8. Electronic Medical records are being selected by hospital IT departments without input from most ED physicians because the ED groups were not “at the table” when projects were being considered.
9. It is important that ED physicians continue to “wear the white hat” and try to bring solutions to the table when they are meeting instead of bringing only the problems. She pointed out that “the role of victim is not compatible with leadership.”
10. In order to survive in the future groups must ask “In what way can the group bring value to the hospital?”

The message is coming in loud and clear from all sides: the Government, trade organizations, and hospitals. If you are not at the table, and soon, you will no longer have control over the way you practice and the way you are paid for practicing and there will be nowhere to shift the blame if you were not there and making a positive contribution when key decisions were being made.

Early in my career I worked for a company that displayed great pride in the “esprit de corps” among its leadership.  Their common slogan was “We do not have problems at our company; we have only opportunities to demonstrate our leadership ability!”  This year MedaPhase’s leadership team has had such opportunities as well.  In an effort to create greater efficiencies and control cost, we have restructured jobs, office locations and switched to a new computer system.  Although I am pleased with our progress overall, it has not been without some challenges.  With every new challenge, however, came a corresponding new learning opportunity.  I am extremely grateful for the team of people in our organization that have demonstrated great responsiveness and creativity in developing ways of overcoming obstacles along the way.

In that regard it is my pleasure to announce an addition to our leadership team, Mr. Sid Harrell, who will serve as Chief Operations Officer for MedaPhase, Inc.  Business operations and coding will be his primary responsibilities.  Having over twenty years of experience in healthcare as a practice manager and consultant, Mr. Harrell will help improve operations and provide continuity between these two important functions.  Most recently Mr. Harrell managed billing and coding operations for McKesson who provided these support services to over 500 physicians the University of Texas Houston healthcare system.  His technical skills and experience in high volume operations will provide a new dynamic in the leadership at MedaPhase. 

Continuing to provide leadership for the coding department will be Jennifer (Gannon) Hackworth.  Carlos Flores will focus our efforts on enhancing and ensuring efficient, prompt and timely service.  Our Information Technology group is headed by Mr. Steve Erhardt who has certainly had his hands full of conversion issues.  Our Chief Compliance Officer is Lynne Kottman who authored an article for this newsletter.  Robert Kottman, MD, also provided an article herein, continues to fight the good fight on the legislative advocacy front.  Forrest Smith, Director of Finance and Accounting and I have moved our offices to the 8^th floor of the Datapoint office in order to make room for the coders to join us and finally all be in one location.

Finally, I would like to suggest that there is a clear and present challenge for physicians to demonstrate their leadership abilities now.  In Ms. Kottman’s article she asks the question, “Will you be at the table?”  Having recently attended the Emergency Department Practice Management Association annual conference, it is clear that now is the time for leadership within Emergency Medicine step up and be proactively involved in several issues facing the specialty and healthcare as a whole.  Former Governor of Oregon, John A. Kitzhaber, MD, an emergency physicians himself quoted John W. Gardner as saying “We are all faced with a series of great opportunities – brilliantly disguised as insoluble problems.”  He closed with a quote of his own, “Leadership Starts with Us”.