Comment Letter to HCFA on Resource-based Practice Expense Proposed
Rule
August 25, 1998
Nancy Ann Min DeParle
Administrator
Health Care Financing Administration
Department of Health and Human Services
Room 309-G
Hubert Humphrey Building
200 Independence Avenue, SW
Washington, D.C. 20201
Attn: HCFA-1006-P
Dear Ms. DeParle:
The Association of American Medical Colleges (AAMC) appreciates
the opportunity to provide comments on the Health Care Financing
Administration's (HCFAs) revised resource-based practice expense
proposed rule. The AAMC represents over 90,000 clinical faculty
who are participating physicians in the Medicare program.
These clinical faculty provide patient care services to Medicare,
Medicaid and uninsured populations in academic, "safety-net"
institutions across the country.
The AAMC believes that the June 1998 proposal is a substantial
improvement over the June 1997 proposal. We believe that the
new "top-down" approach more accurately measures
actual practice costs resulting in more realistic practice
expense relative value units (PE-RVUs). The AAMC, like the
American Medical Association (AMA) and the Practice Expense
Coalition, continues to have some concerns with aspects of
the June 1998 proposed rule and urges HCFA to:
1. Eliminate any behavioral offset applied to the PE-RVU
methodology.
2. Maintain the PE-RVUs as interim values throughout the
transition period until they can be evaluated and refined.
3. Incorporate supplemental data sets that are available
from both public and private sectors. In particular, we
believe it would be useful to utilize data sets on practice
expenses collected by specialty societies.
4. Monitor the effects of the site-of-service differential
payment policy. 5. Establish a process for physician review,
refinement, and updating of the PE-RVUs during the transition
period and beyond.
The AAMC continues to be concerned with the potential impact
that the proposed practice expense RVUs and other Medicare
payment policy changes may have on access to medically necessary
patient care services for Medicare patients, and all other
patient populations that seek medical care from teaching physicians
at academic medical centers.
Traditionally, teaching physicians practicing at teaching
hospitals have an "open-door" policy with regard
to the provision of patient care services. Most AAMC members,
especially state-owned academic medical centers, treat all
patients regardless of their ability to pay. Patients access
the system through the emergency department and the outpatient
clinics. All types of services are provided, including primary
and specialty care, medical and surgical, emergent and non-emergent.
The AAMC is concerned that the combined impact of numerous
Medicare Fee Schedule payment policy changes in the past 12
- 24 months will result in significant reductions in clinical
income and further constrain the ability of academic physicians,
practicing at academic medical centers, to provide patient
care services to Medicare, indigent and other vulnerable populations.
Like our nation's teaching hospitals, teaching physicians
provide significant amounts of uncompensated care. An AAMC
annual financial survey of practice plans shows that charity
care as a percent of total gross charges increased 34 percent
from 3.2 percent in 1995 to 4.3 percent in 1997 for a cohort
of 34 practice plans. In dollars, this represents approximately
$6.9 million in uncompensated care charges per institution
in our study.
Uncompensated services are provided to the most vulnerable
patient populations dependent upon inner city and rural teaching
institutions for their health care needs, and for whom access
to other community health care providers may be limited by
their inability to pay. We believe that the impact of the
proposed PE-RVUs on payments to certain specialties, combined
with the proposed "site of service" differential
and other payment policy reductions (ie. a single conversion
factor, the 1998 primary care "down-payment"), will
exacerbate the ability of academic physicians to subsidize
current levels of uncompensated care to these vulnerable populations.
An AAMC analysis of the impact of the proposed practice expense
methodology on total Medicare allowed charges for academic
physicians estimates that Medicare payments to emergency medicine
will decrease by -14%, internal medicine by -8%, and general
surgery by -12%. (See Table
for impact analysis on all major specialties.) This analysis
takes into account the site of service differential payment
reductions to the practice expense RVUs, but not the other
policy changes mentioned. What is clearly evident from this
analysis is that academic physicians, in contrast to all other
physicians in the community, will experience more dramatic
reductions in payment at a time when clinical revenue is becoming
more constrained due to changing market conditions and managed
care penetration.
Just as the Medicare's Disproportionate Share (DSH) payment
to hospitals assists in maintaining access to hospital services
for Medicare beneficiaries as well as all other patients,
adequate reimbursement for the services of clinical faculty
assists in maintaining comparable access to academic physician
groups. The mix of patients treated by academic physician
groups include a substantial and growing percentage of uninsured
patients which has a direct affect of increasing practice
costs. Academic physician groups must employ and compensate
an adequate number of faculty physicians (as well as additional
support staff not provided by the hospital) to staff emergency
departments and specialty outpatient clinics to treat, typically
without regard to their ability to pay, the volume of patients
coming to these delivery sites for care.
Therefore, we believe that a percentage of the total dollar
value of uncompensated care charges should be recognized as
a legitimate practice expense and be incorporated as an adjustment
to the final practice expense methodology for all professional
services provided by teaching physicians in all specialties.
This policy should be applied to emergency medicine physician
services in both teaching and non-teaching settings as uncompensated
care costs and 24 hour coverage requirements apply to all
emergency medicine physicians participating in the Medicare
program. We urge HCFA to consider one or all of the following
policy options to allow academic physicians an opportunity
to continue their essential role as safety-net providers:
1. Adjust payments by adding a percentage of total uncompensated
care charges when calculating practice expense RVUs for
each service to recognize the practice costs associated
with providing a disproportionate share of uncompensated
care to vulnerable populations. The adjustment could be
applied to all services billed by providers that practice
at hospitals receiving DSH payments under the PPS system.
2. Exempt the services of academic physicians from the
site of service differential when care is provided in a
hospital outpatient or other hospital owned ambulatory care
setting to allow for additional payment to sustain the uncompensated
care burden provided to vulnerable populations in hospitals
receiving DSH payments under the PPS system.
3. Place a limit on the reduction in payments to all specialties
due to the transition to the new resource-based practice
expense system. (e.g., specialties like emergency medicine
may not be able to sustain a 14 percent reduction in payment
without curtailing access.)
The AAMC wishes to reiterate that we believe the June 1998
proposal is a step in the right direction. However, the proposal
requires some additional supportive policies to assure continued
access to the services of academic physicians at major academic
medical centers across the country. If you have any questions
regarding our comments, kindly contact Robert D'Antuono, Assistant
Vice President, Division of Health Care Affairs at 202-828-0493.
Sincerely,
Jordan J. Cohen, M.D. President
Attachment: AAMC Impact Analysis
cc:
Richard Knapp, Ph.D.
Robert Dickler
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