Congress Once Again Stops Physician Medicare Payment Cut

Congress has once again stopped the physician Medicare payment cut. On Saturday, December 9 the United States Senate passed legislation that will stop the impending cuts in physician Medicare reimbursements and freeze them at 2006 levels. The proposal provides the opportunity for physicians to get bonus payments for reporting on quality measures included in the Physicians Voluntary Reporting Program (PVRP). Due in part to the overwhelming response by urologists, urology practice staff, and patients, Congress did not include a proposed plan to require accreditation for ultrasound in the legislation.

In a span of just four days, urologists and their supporters sent more than 2,200 e-mails, faxes and letters, and placed countless phone calls to Capitol Hill on the ultrasound issue. Those who responded to the alert deserve our thanks and praise for preventing encroachment upon the use of ultrasound in urology and should take pride in the effectiveness of their protests. Urology's efforts are a reason why the accreditation language was not included and demonstrates why grassroots efforts are so effective in this situation.

Here is the summary of the provisions in H.R. 6111 that will most affect urologists. The legislation is now heading to the President's desk for his signature:

• A 0 percent update in Medicare payments in 2007 for all physicians.
• A 1.5 percent bonus for physicians choosing to participate in the PVRP, which begins in July 2007.
• No change in 2008 reimbursement - which means a cut of 10 percent starting in 2008.
• A one-year extension of the geographic adjustment for physician services;
• The pilot project on Recovery Audit Contractors (RAC) will be expanded from three states (California, Florida and New York) to all 50 by 2010.
• Quality reporting requirements for Hospital Outpatient Services and Ambulatory Surgical Centers in order to receive a full update. The withhold will be 2 percent and measures will be developed by the Centers for Medicare & Medicaid Services (CMS).

Urologists will have questions about the legislation. The AUA has provided some insights into the legislation passed by Congress:

What does this mean to the urologist who accepts Medicare?

The freeze in Medicare payments to physicians will only last one year and that means in 2008 we will need to go to Congress to seek another physician Medicare payment fix. Under the legislation, urologists may be facing a 10 percent cut in reimbursements in 2008 to help pay for the freeze in 2007 because technically they are not stopping the 2007 cut. Instead, you will receive a bonus payment equal to the amount it would take to bring 2007 payments to 2006 levels. This is paid through a new bonus fund created to pay for quality improvement initiatives and updates to physician payment. The good news is that this new fund means physicians will not be penalized for further prevention of a cut in physician Medicare payments because updates will come from outside the current reimbursement formula CMS uses to pay physicians. Past fixes in the reimbursement formula have not been paid for in the reimbursement formula and therefore physicians "owe" that money to the federal government. This fund will be used to give physicians a bonus payment to make up for further cuts in physician Medicare payment and not make the situation worse.

How will reporting and the bonus payment work?

The 1.5 percent bonus payment is a one-year incentive to help physicians pay for the additional costs associated with reporting on quality measures to the government. The reporting program will begin in July 2007. In 2008 more measures will be added to the PVRP including structural measures (i.e., electronic health records and electronic prescribing technology) but no bonus will paid to physicians for reporting--physicians will not receive bonus payments for reporting these additional measures starting in 2008. It appears that Congress is setting up the framework for a mandatory pay-for-performance system.

But how will the bonus payments for 2007 work? As an example, let's say there are five measures in the PVRP for 2007 relevant to urology.. In order to receive a bonus payment, urologists who bill Medicare for the services related to those measures will have to report on 80 percent of eligible cases to qualify for the payment. The one time 2007 bonus money to be paid to physicians who participate in the voluntary reporting program will be 1.5 percent of all claims that are paid on all Medicare claims submitted during the reporting period by those participating providers. So there will be an upper limit to how many bonus payments urologists who perform these services can access.

What about imaging?

The imaging issue is not going away. Several members of Congress and CMS feel that there is inappropriate over utilization of imaging services. Congress may look at several other methods of preventing urologists from getting timely test results necessary to provide high-quality patient care Urology needs to go back to Capitol Hill and help educate members of Congress on the appropriate use of imaging. Congress needs to understand that efforts such as accreditation will do little to stop the growth in appropriate imaging services offered by urologists.

In summary, this legislation will have far reaching consequences on the urologists' practice (or alternatively, the practice of urology-you pick).. The AUA will continue to analyze the legislation and help to prepare members for the reporting set to start in July . Please watch future issues of the Health Policy Brief as we get closer to July 2007.

NIH Reauthorization Finally Passes
As one of the last acts of the 109th session, Congress passed H.R. 6164. Sponsored by Representative Joe Barton (R-6-TX), it allows Congress to increase funding to the National Institutes of Health (NIH) and create a mechanism to make changes in its structure. The legislation is supported by the AUA because of the mechanism it creates to examine the institutes and centers at NIH. The AUA sought to incorporate elements of the Training and Research in Urology (TRU) Act in the legislation. Congress did include a process that will allow the AUA to petition the agency to seek a much needed reorganization of National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) that would allow for greater research focus into urologic problems. The AUA and the Foundation will continue to work to make sure that NIDDK has more of a focus on urologic research in the coming year.