Helpful information from the American Health Lawyers Association 

President Obama Signs Into Law a Temporary Fix
to Physicians' Medicare Reimbursement
By Jeffrey Moore**

On December 19, 2009, President Barack Obama signed the Department of Defense Appropriations Act, 2010 (H.R. 3326), into law, which freezes Medicare physician payments for two months, avoiding a 21% payment cut to physicians' Medicare reimbursement scheduled to go into effect
on January 1, 2010. The House previously approved H.R. 3326 on December 16, 2009, while the United States Senate passed H.R. 3326 on December 19, 2009.

Because the Department of Defense Appropriations Act, 2010, is only a temporary fix to the Medicare physician payment issue, Congress will be forced to address this payment issue in early 2010, as the Medicare physician payment cuts are set to go back into effect on March 1, 2010.

**We would like to thank Jeffrey S. Moore, Esquire (Phelps Dunbar LLP, Tupelo, MS), for providing this email alert, and the Regulation, Accreditation, and Payment Practice Group for sharing this email alert with the Physician Organizations Practice Group.

Thanks to the American Bar Association’s Physician Interest Group for the following summary of the “final” Medicare Fee Schedule issued today.   

Unless Congress acts, the 21.2% statutorily mandated reduction of overall physician fees will be implemented effective January 1, 2010.  The “final” regulation contains the following provisions of particular interest to physicians:

 *          Eliminates the use of all consultation codes (inpatient andoffice/outpatient codes for various places of service except for telehealth consultation G-codes) on a budget neutral basis by increasing the work relative value units (RVUs) for new and established office visits, increasing the work RVUs for initial hospital and initial nursing facility visits, and incorporating the increased use of these visits into practice expense (PE) and malpractice RVU calculations.

*          Finalizes the proposal to remove physician-administered drugs from the definition of "physician services" for purposes of computing the physician update formula.  This long-awaited administrative step mitigates the size of future Medicare Part B reductions.

*          Phases in new PE RVUs over four years using revised survey data that will result in significant increases and decreases to the PE values of many codes.

*          Establishes a Physician Quality Reporting Initiative (PQRI) reporting mechanism via qualified electronic health records.

*          Defines the size of a group practice as at least 200 providers for purposes of the new PQRI group-practice reporting option.

 *          Increases the utilization assumption for diagnostic equipment priced at more than $1 million, which will decrease the technical component payment for services performed on this equipment.  This change will be phased in over 4 years.    

Thanks to NPR for this summary, which was reproduced by the American Health Lawyers Association

Congress is at an impasse over how to fix a perennial problem in Medicare.

Just about every year a formula glitch threatens to cut payments to doctors who treat seniors and the disabled. And just about every year Congress cancels the cut. This year lawmakers are complaining about the bill because it's not paid for. But, despite what both Republicans and Democrats are claiming, that's nothing new.

Permanent Fix Falls Short

Rather than do another one or two year patch for the Medicare doctor pay cut problem, Senate Democrats had wanted to fix the problem permanently. But their bill couldn't even make it to the Senate floor--it fell short on its first procedural test last Wednesday by 13 votes. The reason cited by virtually every opponent was that the bill's $250 billion, ten-year cost wasn't paid for with other spending cuts or increased taxes.

New Hampshire Republican Senator Judd Gregg is among the opponents of the bill. "We've only done yearly fixes in this area, the doctor fix, because it's a pretty difficult number to always pay for, but we have always paid for it," he said on CNN last Sunday.

Except that Congress hasn't always paid for it. In fact, when Republicans were in charge, they did cancel the Medicare cuts to doctors, but rarely paid for them. Just before turning control of Congress back to the Democrats at the end of 2006, Republicans actually tucked legislation to cancel the next year's doctor pay cut into a catch-all tax bill that wasn't paid for either. And then-Senate Budget Committee Chairman Judd Gregg was one of the people who complained the loudest.

"You just have to ask yourself how we, as a party, got to this point, where we have a leadership which is going to ram down the throats of our party the biggest budget buster in the history of the Congress under Republican leadership," said Gregg back in 2006.

Bipartisan Memory Loss

But Republicans don't have a lock on short-term memory problems. Here's how White House Press Secretary Robert Gibbs responded when he was asked about the issue last Thursday: "The cut in payments to doctors is something that is to be implemented every year; and gets fixed every year for the past six years. The president included in his budget fixing for and paying for that fix," said Gibbs.

Except Gibbs was only half-right. President Obama's budget does propose to fix the payment problem in that it would cancel next year's Medicare cut for doctors and cuts into the future. But it doesn't propose to pay for the added costs.

In fact, back in March, White House Budget Director Peter Orszag testified before a House Committee that the proposed fix could cause the federal deficit to be as much as $400 billion higher over the next decade.

The uneasy alliance between the AMA and Senate Democrats is starting to look a bit frayed.  Apparently, Senator Reid took the “doc fix” legislation to a vote based on what he understood to be assurances from the AMA that there were enough Republican votes to get it through.

Oops.  Apparently, the AMA thought it made it clear that there were Republican votes for general health care reform legislation, NOT that particular piece of legislation.  The “doc fix” legislation went down in flames.

Stay tuned as the sitcom continues.