CMA opposes proposed Medicare physician payment cuts The U.S. House of Representatives’ Ways and Means Committee is working to extend the “rural” work Geographic Practice Cost Index (GPCI) payment adjustment, which is set to expire December 31, 2017. In order to pay for the extension, the committee has proposed an overall cut to Medicare physician payments by identifying and lowering payments for “misvalued” services. In 2014, Congress included a physician-opposed provision in the Protecting Access to Medicare Act (PAMA), designed to hold down Medicare spending by requiring the Centers for Medicare and Medicaid Services (CMS) to identify “misvalued” codes. If CMS is unable to meet the savings target in the PAMA legislation, the remaining amount was to be obtained by an across-the-board payment cut to all services. The Ways and Means Committee is now proposing a fourth year of Medicare physician payment cuts to fund the rural work GPCI floor, despite the commitments made under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) that physicians would be provided automatic, stable payment updates of 0.5 percent per year from 2015-2019. The California Medical Association (CMA) is urging the California Congressional Delegation to oppose the proposed cuts, which will disproportionately harm California physicians. The rural GPCI floor does not help California’s rural areas, while California physicians treat the bulk of Medicare patients in this country. The misvalued code legislation has eroded the modest MACRA payment increases at the same time that physicians were required to make significant investments in their practices to meet MACRA reporting requirements. Physicians are also facing a payment freeze from 2019-2024. If this new proposal takes effect, total physician payment updates for the entire 10-year period of 2015-2024 will be approximately 1 percent. From 2005-2015, physicians’ fees were essentially frozen under the Medicare Sustainable Growth Rate formula, while the costs to operate a medical practice rose more than 20 percent. These Congressional actions will represent more than two decades of nearly frozen payment rates, while all other Medicare provider groups have received updates. Physicians cannot remain in practice and maintain patients’ access to care under these flawed policies. This proposal harms all California physicians, particularly those in the Central Valley, where there are already significant physician shortages and margins to operate a practice are slim because the main payers are the low-paying Medicare and Medicaid programs. CMA is urging Congress to find other funding sources to fund the rural payment floor. December 28, 2017 Medicare Federal Legislative Advocacy, Geographic Practice Cost Index, GPCI, Medicare 0 0 Comment Read More »
2017 Medicare fee schedule includes $140 million in additional funding for primay care The Centers for Medicare and Medicaid Services (CMS) on Wednesday released the final 2017 Medicare physician fee schedule. The fee schedule transforms how Medicare pays for primary care through a new focus on care management and behavioral health, which is expected to result in an additional $140 million in payments next year for physicians providing these services. The 2017 physician fee schedule focuses on improving Medicare payments for services provided by primary care physicians for patients with multiple chronic conditions, mental and behavioral health issues, and cognitive impairment or mobility-related disabilities. These changes will improve payment for clinicians who are making investments of time and resources to provide more coordinated and patient-centered care. These coding and payment changes will better reflect the resources involved in furnishing contemporary primary care, care coordination and planning, mental health care and care for cognitive impairment, such as Alzheimer’s disease. According to CMS, the coding and payment changes in the 2017 fee schedule could over time lead to $4 billion or more in additional support for care coordination and patient-centered care. The rule also begins to implement the California Medical Association (CMA) sponsored California Geographic Practice Cost Index (GPCI) fix, which will overhaul California’s outdated geographic payment localities. This reform will raise payment levels for 14 urban California counties misclassified as rural, while holding the remaining rural counties permanently harmless from cuts (the hold harmless provisions will take effect in 2018). All California payment localities will transition to Metropolitan Statistical Areas. The transition to the new localities starts next year, with higher payments being phased in over a six-year period (2017-2022). Unfortunately, the California GPCI malpractice expenses and rent expenses went down in California and many other regions of the country. Therefore, most California physicians will experience an overall GPCI rate reduction in 2017. The general GPCI cut would have been larger if the California GPCI fix was not being simultaneously enacted. (To see the net GPCI payment impact by region, click here). The fee schedule also finalizes the CMS proposal to expand the Medicare Diabetes Prevention Program (DPP) model to all Medicare patients at risk of developing type 2 diabetes starting January 1, 2018. Expansion of the DPP model will help at-risk seniors and people with disabilities lower their risk factors and prevent their condition from advancing to type 2 diabetes. This marks the first time a prevention model from the CMS Innovation Center will be adopted. For more information, see the CMS fact sheet. CMA and the American Medical Association are reviewing the details of the final rule and will provide additional information in the near future. November 14, 2016 Medicare Fee Schedule, Geographic Practice Cost Index, GPCI, MACRA, Medicare 0 0 Comment Read More »
California GPCI fix implementation to begin in January Last week, the Centers for Medicare and Medicaid Services (CMS) released the final Medicare physician fee schedule for 2017, which begins implementation of the long overdue overhaul of California’s outdated geographic payment localities. The California Geographic Practice Cost Index (GPCI) fix will update California’s Medicare physician payment regions and raise payment levels for 14 urban California counties misclassified as rural, while holding the remaining rural counties permanently harmless (starting in 2018) from cuts. All California payment localities will transition to Metropolitan Statistical Areas. The transition to the new localities starts next year, with higher payments being phased in over a six-year period, from 2017-2022. Unfortunately, the GPCI malpractice expenses and rent expenses went down in California and many other regions of the country. This means that most California physicians will experience an overall GPCI rate reduction in 2017. The general GPCI cut would have been larger if the California GPCI fix was not being simultaneously enacted. Click here to see the net GPCI payment impact by region. Contact: Elizabeth McNeil, (800) 786-4262 or emcneil@cmanet.org. November 8, 2016 Medicare Geographic Practice Cost Index, GPCI, Medicare 0 0 Comment Read More »
CMA urges CMS to recalculate practice expense data to reflect California's higher practice costs As required by law, at least every three years the Centers for Medicare and Medicaid Services (CMS) adjusts payments under the Medicare physician fee schedule to reflect local differences in practice costs. In the proposed 2017 Medicare physician fee schedule, CMS made nationwide updates to the geographic practice cost indices (GPCI) based on new wage, rent and malpractice expense data. Unfortunately, according to CMS, the malpractice and practice expense GPCIs went down in nearly every region of California, which would result in a 0.48 percent GPCI payment reduction in all but a few regions of California. The California Medical Association (CMA) is urging CMS to review the data for accuracy, as physician office expenses in California have increased in recent years relative to the rest of the nation. "California’s real estate market has experienced a remarkable recovery in most regions of the state over the last several years," CMA wrote in comments submitted to CMS last week. "We find it unfathomable that California physicians would be taking a pay cut in 2017 because practice expenses decreased relative to the rest of the nation." CMA also urged CMS to reconsider the inappropriate weighting of the rent expense category, which was given only an 8 percent weight in the practice expense GPCI. "Office 'rent' is one of the largest and most expensive cost components for physicians, and we would argue that it should be given a much larger weight to more accurately reflect its impact on physician practice expenses," CMA wrote in its comments. The proposed Medicare payment rule also begins to implement the California "GPCI fix," which will overhaul California’s outdated geographic payment localities. It transitions the payment localities to Metropolitan Statistical Areas, which is consistent with the way Medicare pays hospitals. The localities will be updated annually. This long-overdue fix updating California’s Medicare physician payment regions will raise payment levels for 14 urban California counties misclassified as rural, while holding the remaining rural counties permanently harmless from cuts after 2017. The transition to the new localities starts next year, with the higher locality payments being phased in over a six-year period starting in 2017. Unfortunately, because of the overall GPCI practice expense and malpractice expense reductions, most California physicians will not see payment increases in 2017. However, without the CMA-led locality change, California physicians would be receiving an even larger payment cut. CMA has reviewed all of the implementation calculations and provided some minor corrections to ensure that the GPCI fix is implemented accurately. CMA will continue to work closely with CMS on the transition to the new California payment localities. For more details, including a corrected payment impact chart by locality, see CMA's comments. Contact: Elizabeth McNeil, (800) 786-4262 or emcneil@cmanet.org. September 22, 2016 Managed Care, Medicare Fee Schedule, Geographic Practice Cost Index, GPCI, Medicare, Regulatory Advocacy, Centers for Medicare and Medicaid Services 0 0 Comment Read More »
CMA meets with CMS on implementing California GPCI fix California Medical Association (CMA) physician leaders recently traveled to Baltimore, MD, to meet with the Centers for Medicare and Medicaid Services (CMS) leaders responsible for implementing the California Geographic Practice Cost Index (GPCI) fix, which will overhaul California’s outdated geographic payment localities. CMA was represented at the GPCI meeting by Larry DeGhetaldi, M.D., division president of the Palo Alto Medical Foundation in Santa Cruz, and Edward Bentley, M.D., a gastroenterologist in solo practice in Santa Barbara. Both physicians have worked on the GPCI issue for CMA for more than a decade. They presented CMS with a new CMA white paper outlining the implementation issues and legislative intent. They also presented a spreadsheet of extensive calculations that they personally performed to help guide CMS with the transition to the new localities. The transition was authorized in 2014, when Congress enacted H.R. 4302, the “Protecting Access to Medicare Act.” The law included a mandate for CMS to move California’s Medicare physician payment localities to the same Metropolitan Statistical Areas (MSA) used to pay hospitals, which more accurately reflect the cost of practicing medicine. The transition to the new localities starts next year, with the higher payments being phased in over a six-year period starting in 2017. It is long overdue. Congress was compelled to enact this change because CMS had not updated California’s Medicare physician localities since 1997. Because of this inaction, Medicare payments in 14 California counties were vastly inaccurate, with under-payment errors up to 14 percent. While Medicare updates hospital payment regions annually, it will be 20 years since Medicare last updated the physician payment regions, and regional costs have changed dramatically in that time. The outdated locality payments were negatively impacting access to care in many areas of California. Under the new law, all California physician Medicare payment localities will move to the Office of Management and Budget-defined MSAs, as recommended by the Institute of Medicine. The MSAs will be updated annually. The long-overdue fix updating California’s Medicare physician payment regions will raise payment levels for 14 urban California counties misclassified as rural, while holding the remaining rural counties permanently harmless from cuts. CMS must issue regulations in 2016 for the January 1, 2017, implementation date. CMA will remain vigilant and actively involved in the GPCI implementation on behalf of California physicians. To read the full white paper presented to CMS, click here. Contact: Elizabeth McNeil, (800) 786-4262 or emcneil@cmanet.org. April 4, 2016 Medicare CMS, Federal Legislative Advocacy, Geographic Practice Cost Index, Centers for Medicare and Medicaid Services, GPCI 0 0 Comment Read More »
Medicare Advantage plans to see a modest increase in payments The Centers for Medicare and Medicaid Services (CMS) announced this week that Medicare Advantage plans would see a 0.4 percent boost in payment rates for 2015. This small payment boost is a change from CMS's February proposal that would have reduced Medicare Advantage plans payment rates by 1.9 percent. This announcement comes on the heels of new data that predicts falling Medicare costs due to healthier baby boomers aging into the system. Healthier beneficiaries in Medicare have led to a downward drop in risk adjustment for the program. CMS has also proposed an improved risk adjustment methodology to account for patient’s health status (severity of illness) and demographics. Plan bids will be based on these criteria. Along with this modest payment increase for Medicare Advantage plans, CMS announced that it plans to discontinue a three-year quality bonus demonstration project that shielded some plans from cuts required by the Affordable Care Act. CMS also said it will limit how much Medicare Advantage plans are allowed to increase beneficiaries’ premiums in 2015. This proposal limits these increases to the equivalent of $32 per month annually in 2015, down from $34 in 2014. With Congress’s recent passage of a bill that will update California's outdated Medicare localities, the Medicare Advantage rates in the 14 affected counties will see an even greater increase because the rates are partially built on the Medicare fee-for-service rates. Contact: Elizabeth McNeil, (800) 786-4262 or emcneil@cmanet.org. April 16, 2014 Medicare Medicare, Medicare Advantage, GPCI 0 0 Comment Read More »
Congress passes California Medicare GPCI fix After 10 long years of lobbying efforts by the California Medical Association (CMA), Congress has finally passed a bill to update California's outdated Medicare localities. The long overdue fix will update California’s Medicare physician payment regions to the same Metropolitan Statistical Areas (MSA) used to pay hospitals and raise payment levels for urban counties misclassified as rural, while holding remaining rural counties harmless from cuts. The MSAs used to determine payment rates for hospitals are continuously updated, so that reimbursement accurately reflects local costs to deliver care. The physician payment localities, on the other hand, have not been updated in 15 years. As a result, 14 urban California counties are still designated as rural. This has caused many California physicians to be paid up to 13 percent per year below what Medicare says they should be paid if they were in the correct region. These counties are currently experiencing significant access to care problems. About a third to one half of the physician groups and hospitals in these regions report difficulty recruiting physicians to treat seniors because the cost of living and the cost to practice are high, but the Medicare locality payments have not kept pace with real costs. For instance, San Diego is now the sixth largest city in the United States, yet under the old Medicare localities, it is still designated by as rural. San Diego physicians and patients alone lose $26 million in Medicare funding each year because of the inaccurate rural designation. The locality update (known as the California "GPCI fix") is part of the “Protecting Access to Medicare Act of 2014” bill passed by the House and Senate last week to postpone for one year the 24 percent cut to Medicare physician payments as called for under the fatally flawed sustainable growth rate (SGR). The bill (H.R. 4302) was signed into law by the President on April 1. The California GPCI fix will increase payments to physicians in 14 counties by $50 million annually to over $400 million in the next decade. The rate increase begins in 2017 and will be phased in each year until full implementation in 2022. The counties poised to see reimbursement increases are San Benito, Santa Cruz, Marin, Santa Barbara, San Diego, Monterey, Sonoma, Placer, El Dorado, Yolo, Sacramento, San Luis Obispo, Riverside and San Bernardino. Because private health plans in these areas tie their fee schedules to the Medicare fee schedule, this will help access to care for all California patients, not just Medicare seniors. Locality 3 counties of Napa and Solano and Locality 99’s remaining rural counties will be held harmless from cuts. (In other words, their geographic rates will never be lower than their current rates.) Their rates can increase as costs go up but they will never be cut below the current floor. San Francisco, Santa Clara, San Mateo, Alameda, Contra Costa, Orange, Ventura and Los Angeles counties have always been in their own localities and reimbursed at their local costs to provide care. This will continue under the MSA system. This is a huge win for California patients and physicians. It will maintain and improve access to care in many regions of California. CMA has many California Members of Congress to thank for the herculean bipartisan team effort to finally get the California locality reform through Congress and signed into law. CMA extends its strongest thank you to our long-time Congressional GPCI quarterback, Congressman Sam Farr (D-Santa Cruz, San Benito, Monterey) for his perseverance to see this through. Congressman Farr and Congressman Darrell Issa (R-San Diego) led the Congressional effort and were extremely effective in passing this law. CMA also extends its gratitude to Congressman Henry Waxman (D-LA), ranking Democrat on the Energy and Commerce Committee, who originally included the California provision in the Committee’s bipartisan Medicare SGR bill, setting the stage for its final passage. CMA must also express its deep appreciation to California's Senators Dianne Feinstein and Barbara Boxer who, for the first time in six years, were able to convince the Senate leaders to include the California reform in the Senate Medicare SGR legislation. Senator Feinstein’s leadership on the Senate side was key. And sincere thanks to House Majority Whip, Congressman Kevin McCarthy (R-Bakersfield), for his willingness to protect California’s rural physicians and include the California reform in the final SGR patch legislation. California Energy Commerce Committee members, Anna Eshoo (D-Santa Clara), Lois Capps (D-Santa Barbara) and Doris Matsui (D-Sacramento), Ways and Means Committee members Mike Thompson (D-Napa, Sonoma, Solano) and Devin Nunes (R-Tulare), and House Leader Nancy Pelosi made this issue a priority and were instrumental in moving it through their committees and the House. Contact: Elizabeth McNeil, (800) 786-4262 or emcneil@cmanet.org. April 4, 2014 Medicare Rural Health, Geographic Practice Cost Index, GPCI, Medicare 0 0 Comment Read More »
House passes year-long SGR patch, includes California GPCI fix This morning the U.S. House of Representatives passed a year-long patch to stop the Medicare 24 percent sustainable growth rate (SGR) cut on an unusual 30-second voice vote. Unable to come to an agreement on how to fund a permanent repeal of the badly broken formula, despite a bill with bipartisan, bicameral support, Congress appears poised to kick the can down the road for the 17th time in just 10 years. The California Medical Association (CMA) is extremely disappointed that Congress has been unable to find bipartisan funding sources and seize the unprecedented momentum of support for permanent Medicare payment reform. The House bill, “Protecting Access to Medicare Act of 2014” (H.R. 4302), provides a 0.5 percent physician payment update through December 31, 2014, and then a 0 percent update until April 1, 2015. It also includes the California Medicare locality update, known as the California geographic practice cost index (GPCI) fix. The GPCI fix holds rural physicians harmless from cuts permanently. The bill also delays for one year the ICD-10 medical billing coding conversion, until October 15, 2015. Yesterday CMA circulated a letter urging the House to take the time to fund the permanent repeal and pass it rather than adopting another year-long patch. The letter supported the “perseverance of the House and Senate Committees to achieve a bipartisan, bicameral agreement to repeal the flawed Medicare SGR and institute a reasonable new payment system.” The letter also asked the House Speaker Boehner and Senate Leader Reid to return “to the negotiating table and finishing the important work to achieve permanent reform.” Practically speaking, Congress has until April 14 to resolve the remaining differences over the bill’s financing before the 24 percent SGR cut actually takes effect. Preventing the SGR cut is imperative to maintaining patient access to physicians in California. Over 90 national, state and specialty physician organizations called for a no vote on this legislation in the House of Representatives. The one-year patch is expected to cost roughly $20 billion. A significant chunk of that money will be generated through a budget gimmick, extending Medicare sequester cuts beyond the 10-year window used for budget scoring purposes. It is also funded with other physician cuts from misvalued codes and imaging criteria. Some funding came from hospitals and nursing homes. The situation in the Senate is still fluid because new Finance Committee Chairman, Ron Wyden (D-OR), wants a vote on the permanent reform before resorting to a vote on another patch. However, the Senate could vote on a patch before the weekend. Despite the welcome delay in the costly, burdensome ICD-10 coding system and the permanent California GPCI locality update, CMA could NOT support another short-term patch and is still pushing for real reform to the SGR. A short-term patch is no longer acceptable to California physicians. Some have argued that a patch will give Congress more time to negotiate permanent reform, but history informs us otherwise. This latest patch is part of a decade long string of patches that have cost U.S. taxpayers $150 billion, close to the cost of a permanent fix. Moreover, many of the physician funding sources in the current patch legislation could be more cost-effectively applied in a permanent reform bill. To see the bill passed by the House, click here. Contact: Elizabeth McNeil, (800) 786-4262 or ecmneil@cmanet.org. March 27, 2014 Medicare Advocacy, GPCI, Medicare, SGR, Federal Legislation 0 0 Comment Read More »
