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ANESTHESIOLOGY AND THE PROPOSED RULE FOR THE 2012 MEDICARE FEE SCHEDULE

 

July 11, 2011

Here we go again. The fearsome Sustainable Growth Rate (SGR) formula has forced the Centers for Medicare and Medicaid Services (CMS) to project a 29.5 percent decrease in payments to physicians in 2012, or an overall conversion factor (CF) of $23.9635, in the proposed Physician Fee Schedule (PFS) rule released on July 1st.

The national average anesthesia CF is currently $21.0515. Reduced by 29.5 percent, it would be $14.8413. You can apply the same reduction to your local anesthesia CF – if you dare.

Since its 1997 enactment into law, the SGR would have created a negative fee schedule update 11 times. Congress has intervened every year except for 2002 and passed legislation to postpone the impact of the formula. Last year, for example, the anesthesia CF would have been $15.81 had the SGR postponement not passed Congress in December.

Washington widely anticipates that some sort of legislative fix will happen again this fall. The American Medical Association and other physician organizations have upped the ante considerably, however, and are working harder than ever to persuade Congress to repeal the SGR altogether. We have a growing number of allies, notably the Medicare Payment Advisory Commission (MedPAC) which provides analyses and recommendations on Medicare issues to Congress and has come out strongly against the SGR. (See, e.g., MedPAC’s June 2011 Report to the Congress: Medicare and the Health Care Delivery System. If you want to understand in detail the calculation of the CF, the Report’s first chapter and Appendix A will be useful.)

As always, there are relative winners and losers among the professional groups paid under the PFS. This is because of an annual shift in relative values for physician work, for practice expenses and for professional liability expenses , combined with certain focused policy changes such as expansion of the 50 percent multiple-procedure discount to the professional component of advanced imaging services. Thus – before application of the 29.5 percent SGR cut – nurse anesthetists would be the biggest gainers in 2012, with a five percent net increase in payments, and radiation therapy centers would lose the most, i.e., nine percent. Below are the annual total Medicare payments and the impacts of the relative value changes for both 2012, the third of a four-year phase-in period, and 2013, the year of full implementation of the changes. Only the specialties of particular interest to our readers, and nurse anesthetists/anesthesiologist assistants, are included; to see other specialties, go to Table 64 on page 569 of the proposed rule hyperlinked in the first paragraph of this Alert. 

Quality, Efficiency and Value

The 621-page proposed rule covers many subjects, not all of which are relevant to anesthesiology or pain medicine. We will note the quality- and efficiency-related issues, which center to a considerable extent on the use of health information technology. As the proposals become finalized, we will explain their application in greater detail.

The proposed rule would update a number of physician incentive programs including the Physician Quality Reporting System (PQRS) and the Physician Feedback System, the Physician Compare Website, the Value-Based Modifier, the ePrescribing (eRx) Incentive Program and the Electronic Health Records (EHR) Incentive Program.

1, Physician Quality Reporting System (PQRS).

CMS proposes to continue with bonus payments of 0.5 percent of allowed charges in 2012-2014 for physicians and other healthcare professionals who successfully participate in the program by reporting quality measures. After 2014, there will be a penalty for providers who fail to participate.

CMS has proposed to eliminate the six-month reporting period, which allowed late starters to earn the bonus on those six months’ worth of claims, except for measure groups reported through a registry. If the proposal is adopted, anesthesiologists and other physicians who submit individual measures will need to participate for the full year. Providers must report on at least three measures (or at least 1-2 if fewer than three apply) at least 50 percent of the time. If the provider is reporting via registry, the measures must be reported at least 80 percent of the time that they apply.

CMS proposes to add the following individual measures to the PQRS:

  • A core measure set (7 measures, 1 of which is available for EHR reporting only) aimed at promoting the prevention of cardiovascular disease. Internists, family physicians, general practice doctors and cardiologists will need to report on at least one of the core measures to qualify for the bonus;
  • 26 additional new measures available for claims and/or registry-based reporting; and
  • All 44 EHR measures currently reportable in the Medicare EHR Incentive Program.

CMS has also just introduced 10 new proposed measures groups for reporting: (1) Cardiovascular Prevention, (2) COPD, (3) Inflammatory Bowel Disease, (4) Sleep Apnea, (5) Epilepsy, (6) Dementia, (7) Parkinson’s, (8) Elevated Blood Pressure, (9) Radiology, and (10) Cataracts. The Agency is refining the Group Practice Reporting Option (GPRO). It will define a group, for purposes of the GPRO only, as 25 or more eligible professionals who have assigned their billing rights to a single entity (versus just two persons last year).

According to the proposed rule, CMS intends to give more flexibility to specialty boards sponsoring Maintenance of Certification (MOC) programs to establish what an eligible professional must do to “more frequently than required to” participate in a MOC program for purposes of the PQRS MOC Incentive. The American Board of Anesthesiology’s MOC program does not yet fulfill the requirements that will allow diplomates to earn the additional 0.5 percent bonus available to successful PQRS participants who also satisfy the MOC standards. For further information on the MOCA, see the July 12, 2010 issue of the Alert.

2. Physician Feedback System.

Some needed improvements to the physician feedback system are underway. The Physician Resource Use Measurement & Reporting Program (RUR) was established on January 1, 2009. This program provides confidential reports to physicians that measure the resources involved in furnishing care to Medicare patients. CMS may also include information on the quality of care furnished to Medicare patients by a physician or group of physicians.

  •  In 2011, CMS began including quality measures that are reported in the PQRS program in the Physician Feedback reports.
  • CMS has completed two phases of the Physician Feedback reports and, by the end of 2011, CMS intends to implement Phase III of the initiative, by providing reports on both resource use and quality measures that cover a larger number and breadth of physicians and group practices.
  • Late in 2011, CMS intends to disseminate Physician Feedback reports to physicians paid under the PFS within four states: Iowa, Kansas, Missouri, and Nebraska. There are approximately 56,000 physicians in these four states.

3. Value-Based Payment Modifier

The Patient Protection and Affordable Care Act (ACA) requires the Secretary of HHS to establish a payment differential under the physician fee schedule to reflect “value” (quality/cost). The modifier must be implemented in a budget-neutral manner.

The ACA requires the Secretary to publish by January 1, 2012, the following: 

  • The quality of care and cost measures established for purposes of the modifier. CMS proposes to use the following measures: 
    • The measures in the core set of the Physician Quality Reporting System for 2012;
    • All measures in the GPRO of the Physician Quality Reporting System for 2012, and
    • The core measures and 38 additional measures in the Electronic Health Record Incentive Program measures for 2012.
  • The dates for implementation of the value modifier. 
    • CMS plans to begin the implementation of the value modifier in 2013. 
  • The initial performance period for application of value modifier in 2015. 
    • CMS proposes that the initial performance period be the full calendar year 2013.

4. Physician Compare Website

As required by the ACA, CMS launched the first phase of the Physician Compare I website on December 30, 2010. This initial phase included the posting of the names of eligible professionals that satisfactorily submitted quality data for the 2009 Physician Quality Reporting System. No later than January 1, 2013, CMS must implement a plan for making information on physician performance publicly available through the Physician Compare website.

5. EHR Incentive Program

Responding to many complaints about the lack of consistency between the PQRS EHR measure and the separate EHR Incentive Program, CMS will include a PQRS reporting option for EHR-based reporting that is identical to the reporting requirements under the EHR Incentive Program. Physicians will be able to report the PQRS EHR measures via an “EHR data submission vendor” in addition to direct submission from an eligible professional's EHR to CMS.

CMS plans to offer physicians the option of meeting the clinical quality measure (CQM) reporting requirements of the EHR Incentive Program by participating in a pilot program, the Physicians Quality-Reporting System Medicare EHR Incentive Pilot. CMS proposes to modify the current list of EHR vendors qualified under PQRS to indicate which of the qualified vendors’ products have also received a certification for the purposes of the EHR Incentive Program.

The EHR Incentive Program is of little value to anesthesiologists as long as CMS does not approve EHR-specific CQMs for the specialty and as long as the meaningful use requirements continue to exclude us.

6. eRx Incentive Program

The eRx Incentive Program establishes a combination of incentive payments and penalties (“adjustments”) through 2014 to eligible professionals who are successful electronic prescribers. Anesthesiologists who do not have qualified or certified eRx technology will not earn the bonus, but they do not need to fear the penalty, either, at least not for failing to e-prescribe in 2012 or 2013, if the proposed rule is adopted. CMS is putting forward the same two exceptions to the requirement that physicians submit at least ten claims with the eRx code (G8553) during January-July of this year that it suggested during other proposed rule-making in May; the exception for physicians who do not write 100 prescriptions during the six-month period will apply to most anesthesiologists.

The exceptions in the proposed fee schedule rule will not apply for the first penalty period, i.e., the first six months of this year. Where does that leave the vast majority of anesthesiologists who have not been able to e-prescribe? Those physicians are in exactly the same position as before – waiting for CMS to publish instructions on how they can apply for a hardship exception for 2011.

On the other hand, anesthesiologists who do have the necessary eRx system may find it easier to earn the incentive payment because if the proposed rule is adopted without change, they will still need to submit at least ten instances of G8553 – but only one of those claims must include a valid underlying procedure (“denominator”) code. (We are not making this up!)

There will be much more to learn and to write about these issues as we continue to unravel the proposed rule – and then the final version, which could be quite different after CMS digests the public comments that it will receive by the deadline of August 30, 2011. We will continue to do our best to keep you informed.

With best wishes,

Tony Mira
President and CEO