PRACTICE RESOURCES > Regulation/AUA Positions, Letters, and Talking Points > CMS-1429-P: Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2005

CMS-1429-P: Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2005

September 10, 2004

Mark McClellan, MD, PhD
Department of Health and Human Services
Centers for Medicare & Medicaid Services
Attention: CMS-1429-P
P.O. Box 8012
Baltimore, MD 21244-8012

Re: CMS-1429-P: Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2005

Dear Dr. McClellan:

The undersigned groups are deeply concerned about the lack of information in the proposed rule on Medicare drug payments that are scheduled to go into effect in 2005. The proposed rule does not even provide a complete list of estimated 2005 drug payments, meaning that there is no opportunity to comment formally on many of the drugs. Furthermore, there are doubts about the accuracy of the drug payments that are listed in the rule as well as the accuracy of the drug payment changes impact analysis. It is very frustrating that, five short months from implementation, there are still missing and incomplete payment estimates.

We have continually urged CMS to provide 2005 drug payments as soon as possible so that physicians can decide on the best course of action for their patients and their business. In this time of uncertainty, physicians are worried that they may not be able to maintain enough inventory, or may not be able to afford to purchase drugs at ASP, and patients may suffer serious access problems. Thus, we urge CMS to provide as soon as possible a complete list of estimated 2005 drug payments based on manufacturer-reported 2004 first quarter and second quarter average sales price (ASP) data. We also believe that CMS should provide an opportunity for public comment on previously-unpublished ASPs and are seeking clarification on how CMS would accommodate this request.

First quarter drug payments for 2005 will be based on 2004 third quarter ASP data, which is not due to CMS until October 30. By the time this data is validated by CMS and published for public viewing, there will be barely any time left in the year for physicians to incorporate this information and make any necessary adjustments in their practices. Therefore, it is vital that physicians have access to any and all information that will help them to make informed decisions for 2005. It is important for CMS to release estimated payments based on all quarterly data that is currently available so that problems or trends can be identified before the new payments are implemented.

The Medicare Modernization Act provided an unreasonably short transition time to the new drug payment system, giving physicians only one year to reevaluate and restructure their business and patient care plans in light of practically unknown payment changes. We are receiving countless inquiries from our members asking for guidance on how to handle these payment changes and what to tell their patients. In the face of such uncertainty, physicians are preparing for the worst and considering making drastic changes in their practices when payments are based on ASP in 2005. These changes include closing satellite offices, sending patients to the hospital for drug administration and laying off employees.

Although releasing estimates based on available quarterly data will not solve all of the problems associated with the new drug payment system, it will at the very least allow physicians access to data that will help them deal with the uncertain environment they now face.

Thank you for considering our comments.


American Association of Clinical Urologists
American Association of Orthopaedic Surgeons
American College of Cardiology
American College of Physicians
American Gastroenterological Association
American Medical Association
American Medical Group Association
American Osteopathic Association
American Society of Anesthesiologists
American Society of Cataract and Refractive Surgery
American Society of Clinical Oncology
American Society of Hematology
American Urological Association
Infectious Diseases Society of America
Medical Group Management Association
Renal Physicians Association
Society of Gynecologic Oncologists


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