House passes 19-month SGR relief

The House passed an amended version of the “American Jobs and Closing Tax Loopholes Act of 2010,” which includes a provision to suspend Medicare physician payment cuts produced by the SGR formula for 19 months. The Act will prevent the 21% cut originally scheduled for 2010, with the House proposing a 2.2% payment update for the remainder of this year, and a 1% update for 2011. Under the House’s proposal the SGR challenges will resume in 2012, with an estimated 33% payment cut for that year. The Senate will not resume until June 7 to consider the legislation.

Congress needs to hear from you! Contact your representative and senators today using the AMA’s toll-free grassroots hotline at (800) 833-6354 or send them an email. A long-term solution to the SGR is needed today!

The Centers for Medicare and Medicaid Services (CMS) has notified physicians it will delay processing claims for two weeks. CMS told its contractors to hold claims for Medicare reimbursement for 10 business days “to avoid disruption in the delivery of health care services to beneficiaries and payment of claims for physicians.”

Your voice needed in SGR survey

Please take a short survey designed by the AMA to determine how threatened cuts to Medicare physician payments and instability in the Medicare program are affecting physician practices. The survey will be open through close of business May 21, and results will be used in advocacy efforts to reform Medicare's current physician payment formula.

Medicare Cuts Delayed Until June 1

Last night, the President signed H.R. 4851, the Continuing Extension Act of 2010, into law, reinstating Medicare physician payments to where they were on March 31 and again postponing the 21.3 percent cut that was supposed to take effect in 2010. This most recent extension of 2009 payment rates will continue through the end of May, and will be applied retroactively to all physician services provided to Medicare patients in April.

Yesterday, the hold on processing April claims that the CMS had placed to avoid implementing the payment cut technically expired. However, with Congressional action so imminent, do not believe many claims were actually processed at the lower payment rates. However, CMS indicated that any claims paid that reflected the 21.3 percent cut will be reprocessed automatically without any action required from physicians.

Senate Advances Delay of Medicare Cuts

Yesterday the Senate voted 60-34 to limit debate on a bill that extends a number of expiring programs, including a dealy of the 21% Medicare physician payment cut. No deal has been struck to expedite passage of the bill. Without such an agreement, Senate procedures do not allow for a final vote until later in the week.

CMS instructed its carriers to refrain from processing any claims for services provided on or after April 1 for 10 working days, to minimize administrative complications and other disruptions that would result from calculating payments that reflect a rate reduction that Congress is expected to overturn. That 10 day grace period expires on Wednesday, April 14. If Congress fails to pass legislation by close of business on Wednesday, Medicare law will require carriers to begin processing claims for services provided in April with the 21 percent cut. However, it is expected Congress will to pass legislation that retroactively restores payments to levels in place prior to April 1.

CMS to Hold April Claims for 10 Business Days

CMS is working with Congress, health care providers, and the beneficiary community to avoid disruption in the delivery of services and payment of claims paid under the Medicare Physician Fee Schedule (MPFS). The Temporary Extension Act of 2010, enacted on March 2, 2010, extended the 0% update to the 2010 MPFS through March 31, 2010.

CMS believes Congress will take measures to avert the negative update slated to take effect April 1. Consequently, CMS has instructed its contractors to hold claims containing services paid under the MPFS for the first 10 business days of April. This hold will only affect claims with dates of service starting on April 1, 2010, and forward. In addition, The hold should have minimal impact on provider cash flow because, under the current law, clean electronic claims are not paid any sooner than 14 calendar days (29 for paper claims) after the date of receipt.

AANEM will continue to update its members on new information related to the 2010 MPFS extension.

Further CMS Guidance on Consultation Services

MLN Matters® SE1010 provides further clarity from CMS for those who who perform initial E/M services previously reported by CPT consultation codes for Medicare beneficiaries and submit claims to Medicare MACs for those services. The document follows a Q&A format. It includes the first information I have seen from CMS regarding low-level inpatient consultation codes 99251 and 99252. A question on page 3 asks how services previously reported with these codes should be billed since they do not meet key requirements for 99221-99223.

Senate votes to again delay Medicare cut

The U.S. Senate voted yesterday to delay this year's 21 percent cut in Medicare physician payments until Oct. 1. The AMA continues to call for permanent reform of Medicare's sustainable growth rate formula. "If the House adopts this Senate bill, America's seniors and their physicians will be left in limbo, and access to health care for Medicare patients will continue to be in grave danger," AMA President J. James Rohack, MD, said in a statement.

SGR Cut Averted for 1 Month

Last night the Senate voted 78-19 to pass H.R. 4691, the "Temporary Extension Act of 2010," which included provisions to extend 2009 Medicare physician payment rates through the end of the month. As a result, the 21% payment cut that took effect on March 1 has been postponed until April 1.

The bill passed the House on February 25, only to encounter opposition on the Senate floor by Senator Jim Bunning (R-KY), who objected to the legislation being considered as an emergency measure that would not require budgetary offsets. In addition to postponing Medicare physician payment cuts, the bill extended a variety of other expiring programs including unemployment insurance and premium subsidies for COBRA continuation coverage for those whose employment was involuntarily terminated.

Discussions are still underway in the House and Senate on the next steps that will be taken to address the Medicare payment crisis. Proposals are being circulated that would implement still another short-term patch to the sustainable growth rate (SGR) formula, including proposals that would postpone cuts for 90 days, 7 months, or through the end of 2010. The AMA and those currently attending its 2010 National Advocacy Conference in Washington, DC, continue to press for permanent repeal of the SGR, rather than repeating the pattern of short-term remedies that serve to make future payment cuts more severe and increase the cost of permanent Medicare payment reform.

Members are urged to keep up the pressure, especially in the Senate, for enacting legislation to permanently resolve the Medicare physician payment crisis. Use the AMA’s Grassroots Hotline at 800-833-6354 or write an email.

Senate Fails to Prevent SGR Cuts

Yesterday, the House passed HR 4691, legislation that extends a number of expiring programs for 30 days, including current Medicare physician payment rates, which would once again postpone the 21% cut that was scheduled to take effect this year. The Senate attempted unsuccessfully on several occasions last night and this morning to pass the same bill by unanimous consent, but objections were raised by Senator Jim Bunning (R-KY), on the basis that $10 billion cost of the program extensions was not offset. The Senate has now adjourned for the weekend, so the 21% Medicare physician payment cut will be effective on Monday, March 1.


The Centers for Medicare and Medicaid Services (CMS) informed the AMA that they are notifying their contractors to hold Medicare physician claims for 10 business days, effective Monday. The agency will also be sending out a similar message on its various list serves this afternoon to physicians, and contractors will be instructed to disseminate this information as well.

Express your outrage to Congress about its terrible mismanagement of the Medicare and TRICARE programs, which are so important to the health and well-being of Americans who have served our nation so long and so well. Tell them:

• Congress had more than a year to repeal the Medicare payment formula and ensure the security and stability of the program. Instead, it has abandoned patients who rely on Medicare and TRICARE for their health care.
• Parliamentary procedures offer no excuse for the harm they are causing these programs.
• Stop playing games with patients and the physicians; repeal the sustainable growth rate (SGR) formula once and for all.

Use the AMA's toll-free grassroots hotline at (800) 833-6354 or write them an e-mail.

Access 2007 Re-Run and 2008 PQRI Feedback Reports

Physicians may now access their 2007 re-run and 2008 Physician Quality Reporting Initiative (PQRI) data through a new tool. CMS has created the “Verify Report Portal” which is available on the PQRI Qualitynet Portal. In addition to PQRI information, these reports will provide individual physicians with information on their Medicare Part B Physician Fee Schedule allowed charges for the 2007 or 2008 PQRI reporting period, upon which an incentive payment is based.

The tool is available at https://www.qualitynet.org/portal/server.pt.

SGR Delay Expires March 1

The clock is ticking—tell your senators to repeal the SGR. With a 21 percent cut in Medicare physician payments scheduled to take effect in just 20 days, the time to persuade lawmakers to pass a permanent repeal of Medicare's sustainable growth rate (SGR) formula is ticking away. Contact your U.S. senators and insist that they pass legislation to repeal the SGR formula to avert the cuts, which are slated to take effect March 1. Use the AMA's toll-free grassroots hotline at (800) 833-6354 or write them an e-mail.

CPT Publishes Guidance for Consultation Coding

CPT just released an informational memo addressing consultation services and transfer of care. Much of the memo will not apply for Medicare patients since CMS is no longer accepting consultation codes. The memo suggests that Medicare contractor websites are the best place to locate further coding inforamtion for Medicare patients.

Unfortunately, a lack of direction from CMS to contractors has resulted different solutions for reporting low-level inpatient consultations. Until more specific guidance from CMS is given, adhere to the key elements of the service provided when selecting the appropriate code. For example, level 3 inpatient consultation (99253) requires detailed history, detailed exam, and low complexity decision making. This matches exactly with level 1 inpatient hospital care (99221), which requires detailed history, detailed exam, and low complexity decision making.

CMS expands Medicare Advantage payment dispute resolution process

Last year, CMS established a payment dispute resolution process for physicians who encountered problems in getting accurate compensation from Medicare Advantage (MA) private fee-for-service (PFFS) plans. Now, CMS has expanded the process to include non-contracted physicians and to include all MA organizations, including HMOs and PPOs, not just PFFS plans. The dispute resolution process can be used by non-contracted physicians to address problems of MA organizations paying less than regular Medicare rates as well as downcoding of claims, but not for denied claims. The contractor handling the disputed payments is First Coast Service Options, Inc. Information on how to initiate the dispute resolution process is available on the FSCO website.

Medicare Consultation Coding: MLN Matters MM6740

Medicare released a Medicare Learning Network bulletin last month that provides additional guidance on billling patient visits instead of consultations. This change regulatory change was discussed in an earlier post when first finalized in November.

Senate Passes Health Reform Bill

In a 60-39 party line vote, the Senate passed the Patient Protection and Affordable Care Act in the morning on December 24.

Prior to the Senate vote, AMA President-elect Cecil B. Wilson, MD, announced the Association's backing during a Dec. 21 Capitol Hill appearance with Senate Majority Leader Harry Reid (D, Nev.) and other top Democrats. Dr. Wilson noted that the leaders had amended the bill to eliminate some earlier provisions that had prompted AMA concerns, such as a one-year Medicare pay patch that would have led to a projected 23% cut in 2011, an elective cosmetic surgery tax and a proposed Medicare enrollment fee.

But the AMA will continue to push for additional changes to the legislation during the conference negotiations. The Association, for instance, said it will not support a final House-Senate bill unless lawmakers make key revisions to: a proposed independent Medicare advisory board that could impose pay cuts on physicians, a plan to release Medicare data in the form of physician performance reports, and a requirement that doctors participate in Medicare quality reporting or face penalties.

In order to preserve AMA backing for the health system reform bill, the Association said Congress must also demonstrate that it is on track to approve separate legislation permanently repealing the Medicare physician payment formula before the current rate freeze expires at the end of February.

Medicare Changes for 2010

Medicare’s 2010 final rule confirms that physicians face steep cuts of 21.2% in 2010. Permanent repeal of the flawed sustainable growth rate (SGR) formula is an essential element of comprehensive health system reform. In October, the Senate failed to pass a bill (S. 1776) that would fix the problem, while the House is expected to vote soon on a different bill (H.R. 3961) that would also fix the problem.

The rule includes other changes for EDX physicians as well. A proposal for Medicare to stop accepting consultation codes (99241-99245, 99251-99255) as of January 1, 2010 was finalized and included in the rule. Physicians will instead report the office visit codes (99201-99205, 99211-99215) to Medicare for these services. For inpatients, use hospital care codes (99221-99223) or initial nursing facility care visit (99304-99306) evaluation and management (E/M) codes for the first visit during a patient’s admission to a hospital or nursing facility. In its proposal to eliminate the consultation codes, Medicare cited continued provider dissatisfaction with Medicare documentation requirements, confusion between a consultation and a transfer of care, and similarity in the physician work of consults and office visits, despite the work higher value. The AANEM and many other entities commented in opposition to this change and the fast implementation to no avail.

To maintain budget neutrality the RVUs for other office visit E/M services will be increased proportionately, about 6%. Work RVUs for hospital and nursing facility visits will be increased approximately 2%. The table below shows how the removal of consult codes and subsequent redistribution of value affects key E/M codes.

* Calculated before 21.5% SGR cut is applied. **Inpatient codes have only three corresponding levels of service.

Finally, CMS currently utilizes practice expense (PE) data and physician hours from the 1995-1999 AMA Socioeconomic Monitoring System (SMS) survey to calculate “practice expense per hour” estimation and direct to indirect cost ratio for each specialty. This data and the accompanying PE and malpractice (MP) RVUs are being updated with new survey data from 2007-2008 that was compiled through joint efforts of AMA, CMS, and over 70 national health care organizations. Implementation of these data will redistribute practice expense payment among specialties during a 4-year transition period.

Physical medicine and rehabilitation physicians will receive a 2% increase from transitional practice expense RVU changes in 2010, increasing to a 6% increase in 2013. Neurologists will receive a 1% transitional increase in 2010, culminating in a 4% increase in 2013. As part of the redistribution, a number of other specialties will see net reductions in 2010 through the 2013 transition, as seen in this table.

Vote on SGR

Wednesday's vote to limit debate and proceed to consideration of legislation (S. 1776) to repeal the SGR, erase the existing debt, and freeze physician payments at current rates for 10 years failed. This was a disappointing blow to physicians and supporters. A majority of senators from both parties agree the formula is flawed. The vote seems to have failed because (1) moderate senators who agree the SGR is a problem could not overlook the deficit implications and (2) Senate Republican leadership portrayed this as a test vote on Democrats' health reform legislation.

Unfortunately, temporary fixes that override the formula simply make the problem worse. In 2005 it would have cost $48 billion over 10 years to repeal the formula. Physicians that year faced cuts of 3.3%. Today it would cost $245 billion and the 2010 scheduled cut to physicians is 21.5%. Visit the Health System Reform website to stay current on this and other reform issues.

Medicare Physicians Fairness Act of 2009

Contact your senators in support of S. 1776. With the introduction in the U.S. Senate of S. 1776, the "Medicare Physicians Fairness Act of 2009," earlier this week, the AMA urges all physicians to contact their senators and tell them to support this critical piece of legislation that would eliminate Medicare's sustainable growth rate (SGR) formula.

S. 1776 will be the subject of a cloture vote in the coming days. The Senate needs 60 votes to invoke cloture to allow formal consideration of the bill. A vote on final passage is expected to occur late next week, either on Oct. 22 or 23. Senate Majority Leader Harry Reid (D-Nev.), Senate Finance Committee chairman Max Baucus (D-Mont.), and Sen. Chris Dodd (D-Conn.), along with President Barack Obama, are all strongly supporting passage of S. 1776.

Send an e-mail to your senator, or call the AMA grassroots hotline at (800) 833-6354 and be connected directly to your senators' offices. Learn more about S. 1776 in the latest edition of the AMA's Health System Reform Bulletin.