Conferees on Medicare Bills Begin Work, Project
Completion by
Mid-September
Michael Scott, J.D., Director
Governmental and Legal Affairs
House and Senate conferees on the Medicare prescription
drug and modernization bills (H.R. 1 and S.1) wasted
no time after their appointment in mid-July to begin
work on reconciling the many differences between
the two versions.
After two initial sessions and a July 23 meeting
with President George W. Bush, the conferees announced
substantial agreement on the several regulatory
reform initiatives that had been dealt with similarly
in the two bills as well as detailing the schedule
for staff meetings on more complex subject areas
during the August recess. Although the regulatory
reform provisions were widely acknowledged to be
the “low-hanging fruit” of the negotiations,
conference leaders expressed optimism that they
would produce a report by mid-September or a few
weeks later.
A number of issues of particular interest to organized
medicine remain to be resolved. Most visible, of
course, is the issue as to whether final legislation
will ameliorate the negative 4.2-percent cut in
Medicare reimbursement for 2004 that was projected
this past spring by the Centers for Medicare &
Medicaid Services (CMS). As previously noted in
this column, the House bill provides for a 1.5-percent
increase in 2004 and 2005, but the Senate merely
passed nonbinding resolutions expressing the need
to deal with the issue.
Conversion factor increase. House
Ways and Means Subcommittee Chair Nancy L. Johnson
(R-CT) has told physician groups that no bill can
be enacted that does not contain a positive reimbursement
update for physicians, but this prediction must
be viewed cautiously in the context of the most
recent Congressional Budget Office (CBO) estimates
of the cost of the respective bills. Against a budget
limitation of $400 billion over 10 years, CBO has
“scored” the House bill at $408 billion
and the Senate bill at $462 billion, not counting
the cost of two expensive, late-added amendments
dealing with medical savings accounts (House) and
disclosure of drug formularies (Senate) that almost
surely will have to be dropped. Any positive reimbursement
update for physicians will have to survive the cuts
necessary to bring the final bill into budgetary
compliance.
GPCI provisions. Particularly germane
to this budgetary concern is the fact that both
bills contain provisions designed to benefit physicians
in rural areas by raising the physician work geographic
practice cost index (GPCI) to, or close to, the
current mean on a short-term basis and, in the case
of the Senate, raising all GPCIs (work, practice
expenses and professional liability costs) to the
mean for 2005-07. The House bill grants the Health
and Human Services (HHS) Secretary discretion not
to implement the interim work increases if he determines
there is no “sound economic rationale”
for implementation and requires the General Accounting
Office to issue a report on the GPCI issue. Concern
has been raised that the cost of these proposals,
especially the more generous Senate proposal, could
serve to damage the chances for an overall increase
in physician reimbursement in 2004 and 2005.
E-prescribing. Less visible but
nonetheless of great significance to physicians
are the provisions of both bills dealing with the
subject of electronic prescribing. The House bill
would mandate that after development of appropriate
standards and with limited exceptions, all prescriptions
be written and transmitted electronically on or
after January 1, 2006. The Senate bill would merely
require development of necessary standards by that
date and that all prescriptions written or transmitted
in electronic form comply with those standards.
Physician groups appear to be in strong agreement
that the Senate version is preferable; of interest
is the fact that ASA enjoys membership on the standards-accrediting
committee of the American National Standards Institute,
which almost certainly would review these standards.
ICD-10. Physician groups have expressed
serious concern about the provision of the House
bill that, in the event the National Committee on
Vital and Health Statistics does not make a recommendation
within a year, authorizes the HHS Secretary to adopt
the ICD-10 (International Classification of Diseases
10th revision) data standard to replace the current
ICD-9. The Senate bill contains no provision on
the subject. Were HHS to apply ICD-10 to professional
services, use of the Current Procedural Terminology-4™
coding system for description and billing of services
would become obsolete, and the number of descriptive
codes would increase to about 170,000. Of particular
interest to anesthesiologists, ICD-10 contains no
anesthesia codes. Of perhaps greatest concern to
physician groups is the predictable cost of shifting
to a new and more complex system.
Specialty hospitals. Both H.R.
1 and S. 1 contain provisions responsive to increasing
concern about the impact of “specialty hospitals,”
which allegedly “cream-skim” more lucrative
cases from general acute care hospitals. The House
bill merely calls for a study of the phenomenon
within one year, focusing on issues such as excessive
self-referral, quality of care, Medicaid utilization
and uncompensated care. The Senate bill, however,
after grandfathering specialty hospitals currently
under development, would exclude specialty hospitals
from the existing Stark II self-referral exception
related to investments in whole hospitals. Organized
medical groups have advocated adoption of the more
deliberate House approach.
Whatever the resolution of these physician-related
issues, the question still remains whether the conferees
can produce legislation that can command majority
votes in both houses of Congress. As reported last
month, H.R. 1 passed by only one vote and only after
the bill was sweetened to attract the votes of a
number of conservatives who are anxious to push
Medicare into competition with private insurers,
a concept that is an anathema to most Democrats.
By the same token, it is clear that $400 billion
over 10 years is not enough money to produce a truly
meaningful drug benefit for seniors, and the question
remains whether groups like AARP are, in the end,
going to find an agreed bill acceptable within those
dollar limits. By the time this column is read,
we should know much more about the success of the
conference.
Senate HELP Committee Passes
Patient Safety Bill
Acting by unanimous vote, the Senate Committee on
Health, Education, Labor and Pensions (HELP) reported
out the Patient Safety and Quality Improvement Act
(S.720), under which physicians and other providers
could report errors and near-misses on a confidential
basis to “patient safety organizations,”
which in turn would use reported data to develop
standards and other information designed to cut
down on medical errors. The House passed its version
of the legislation (H.R. 663) last spring.
It is expected that when the bill is debated on
the Senate floor, Democrats will seek further refinements
to assure that the new system would not impede accountability
for medical errors by providers. This issue has
been a source of difficulty for passage of a Senate
bill, going back to the last Congress when the committee
was unable to report out a bill. It appears, however,
that the chances for enacting a bill have never
been more promising.
If the legislation becomes law, it will represent
an opportunity for ASA to augment its analysis of
closed-claims data with information directly reported
by physicians. Development of necessary regulations
by HHS, necessary for identifying qualified patient
safety organizations, would probably require one
to two years following enactment.
CMS Proposed 2004 Rule Includes
Teaching Change
Contrary to “inside the Beltway” rumors,
the proposed CMS 2004 physician payment rule released
August 8 continued to project a 4.2-percent negative
reimbursement update for next year; CMS cautioned,
however, that this number was likely to change as
further data are compiled. The extent to which this
negative update becomes a reality depends upon whether
conferees on the Medicare reform legislation can
reach an agreement and whether that agreement will
contain the House proposal or something similar,
assuring physicians a positive update in 2004. As
this column is written, the jury is still out on
both issues.
The proposed rule also contains two anesthesia-specific
discussions. First, CMS notes that it is still awaiting
a requested recommendation from the American Medical
Association/Specialty Society Relative Value Update
Committee (RUC) on further changes in anesthesia
work values as a result of the second statutorily
required review of work values under the Medicare
Fee Schedule. This statement is somewhat disingenuous
in that CMS is well aware that the RUC does not
intend to make further recommendations on this matter,
but its notice at least serves to keep the matter
officially alive.
Second, responding to the urgings of ASA and several
members of Congress, the proposed rule seeks comments
on the appropriateness of applying the nurse anesthesia
teaching rule, adopted several months ago, to teaching
of anesthesiology residents. Were this to occur,
a teaching anesthesiologist would be permitted to
supervise two residents concurrently and be reimbursed
base units for each of the two cases plus time units
for time actually spent in the two rooms.
Presently the CMS teaching rule permits a teaching
anesthesiologist to work with one resident only.
ASA had suggested that this limitation be eliminated
and that the anesthesiologists be required, like
surgeons and other teaching physicians, to be present
only for the key portions of a procedure, thus permitting
some overlap of cases. ASA is currently analyzing
the CMS proposal, in consultation with the Society
of Academic Anesthesiology Chairs and the Association
of Anesthesiology Program Directors, to determine
its response to the CMS suggestion.
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