AAMC Testifies before PPAC
on Physician Payment Update and SGR Methodology
October 4, 2002-The Practicing Physicians Advisory
Council (PPAC) met Sept. 23 and 24 to review several topics
of importance in preparation of PPAC's March 2003 report to
the Secretary of Health and Human Services. The Council reviewed
various topics related to physicians programs and regulations
under Medicare and Medicaid. Albert Bothe Jr., M.D., executive
director, University of Chicago Faculty Practice Plan, compliance
officer and professor of Clinical Surgery, University of Chicago
Medical School, and medical director, University of Chicago
Health Plan and the chair elect of AAMC's Group on Faculty
Practice (GFP) Steering Committee and chair of the GFP Subcommittee
on Legislative and Regulatory Issues, testified
on the physician payment update and the SGR.
PPAC members heard reports regarding the proposed 2003 physician
fee schedule, issues of changing access to care for beneficiaries
of Medicare and Medicaid, the availability of Carrier Medical
Directors (CMDs), changes in the self-administered drug policy,
and Health Insurance Portability and Accountability Act (HIPAA)
compliance.
The Council heard testimony on changes to calculations in
the Medicare Economic Index (MEI) and the Sustainable Growth
Rate (SGR). Changes to the MEI include an adjustment that
will be based on a multifactor productivity versus a labor
only productivity measure. Under this approach to calculating
the MEI the 2003 MEI update is calculated at 3.0 percent;
the Centers for Medicare and Medicaid Services' (CMS) previous
treatment of the MEI would have resulted in an MEI update
of 2.3 percent. Under the Proposed Rule this change in the
MEI results in a proposed Conversion Factor (CF) change of
-4.4 percent instead of -5.1 percent. Further, the actuarial
team reported that CMS would begin separately weighting price
growth in the SGR for the physician, laboratory and drug components.
Within the broad area of access to care, the Council received
reports regarding the possibility that the decreases in physician
reimbursements under the Medicare fee schedules are leading
to access problems for beneficiaries. Overall, the Council
expressed concern over the access issues and other changes
related to the MEI and SGR. The Council approved a motion
to recommend that the CMS administratively correct the fee
schedule decreases by:
- Removing the drug costs from the SGR;
- Recalculating the basis to correct for underestimates
in the GDP; and
- Recalculating the basis to correct for underestimating
the number of beneficiaries enrolled in Medicare fee-for-service
in 1998 and 1999.
The council also requested additional information on the
issues of access and administrative corrections to the fee
schedule at their next meeting.
Other significant issues of interest to physicians included
two presentations on Local Medical Review Policies (LMRPs).
The first concerned BIPA 522 Notice of Proposed Rulemaking
(NPRM) [67 Federal Register 54533]. Under this rule, the process
for a beneficiary to appeal an adverse coverage decision is
delineated. Many of the members of the Council expressed concern
over the rule, questioning whether or not the process described
would be fair to the beneficiaries and whether or not the
entire appeal could be conducted in a timely fashion. The
second presentation related to issues with variations in LMRPs
among the various regions and carriers.
Other items discussed by PPAC:
- Review of Geographic Practice Cost Indexes (GPCI's);
- Physician education regarding CMS programs and regulatory
changes;
- Trends and Activities in Medicare Prevention Programs;
and
- E & M Guidelines and Update.
Information:
Denise Dodero, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
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