Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, Aug 2008

Published Friday, August 29, 2008 7:00 am

Mr. Kerry Weems
Acting Administrator
Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS–1403–P
Room 445–G, Hubert H. Humphrey Building
200 Independence Avenue, SW.
Washington, DC 20201

Re: Medicare Program; Revisions to Payment Policies under the Physician Fee Schedule and Other Part B Payment Policies for CY 2009 (CMS–1403–P)

Dear Mr. Weems:

We are pleased to submit these comments on the proposed rule for Revisions to Payment Policies under the Physician Fee Schedule for Calendar Year 2009 on behalf of the American Association for Geriatric Psychiatry (AAGP). The AAGP is a professional membership organization dedicated to promoting the mental health and well-being of older people and improving the care of those with late-life mental disorders. Our membership consists of more than 2,000 geriatric psychiatrists as well as other health care professionals who focus on the mental health problems faced by senior citizens.

Our comments focus on issues related to: (1) improved payments for psychiatric services; (2) the July 2008 update, the CY 2009 update and the Sustainable Growth Rate (SGR); (3) the Physician Quality Reporting Initiative (PQRI); and, (4) physician and nonphysician practitioner (NPP) enrollment issues.

Improved Payments for Psychiatric Services

We note that several important changes for CY 2009 are expected to lead to increased payments of 2 - 5 percent for nearly all psychiatric services. First, the continued transition to fully implemented practice expense relative value units (PE RVUs) under the new CMS “bottom-up” methodology results in increased PE RVUs for services our members commonly provide. Second, the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) replaced the 10.6% payment cut that went into effect on July 1 with a 0.5% update extension through December 31, 2008. For calendar year 2009, the update will be 1.1%. Third, MIPPA also requires CMS to make the budget neutrality adjustment associated with the implementation of the improved work RVUs from the 2007 Five-Year Review of the RBRVS on the conversion factor, rather than the work RVUs. AAGP strongly supports all three of these changes.

In addition, we note that Section 138 of MIPPA requires CMS to increase payment for selected mental health services by 5 percent during the period beginning on July 1, 2008 and ending on December 31, 2009. This increase would be in addition to the increases discussed above. The new law does not identify specific codes to which this increase would apply but defines the services as “(1) insight oriented, behavior modifying, or supportive psychotherapy; or (2) interactive psychotherapy.” These services are reported using CPT codes in the range 90804 – 90829 and we recommend that implementing instructions specify that these are the codes to which the increased payment would apply. We recognize the difficulties associated with making payment changes in the middle of the year and we thank you and your staff in advance for your efforts to implement the requirements of the new law as quickly as possible.

The July 2008 Update, the CY 2009 Update and the Sustainable Growth Rate (SGR)

In the final rule for CY 2008, CMS announced that the PFS update for CY 2008 would be -10.1 percent, and the CF for CY 2008 would be $34.0682. However, legislation was enacted subsequent to publication of the final rule that provided for a 0.5 percent update to the conversion factor for the period beginning January 1, 2008 and ending June 30, 2008. Therefore, for the first half of 2008 (that is, January through June), the Medicare PFS conversion factor was $38.0870.

In the proposed rule for CY 2009, CMS announced that for the remaining portion of 2008 (July through December), the Medicare PFS conversion factor would be $34.0682, as published in the 2008 PFS final rule with comment period. This would have represented a 10.6 percent reduction from the payments in the first half of 2008. CMS also announced that their most recent estimate of the CY 2009 Medicare PFS update was -5.4 percent. This would correspond to a conversion factor of 32.2285 which is less than the conversion factor in place in 1994.

Fortunately, as noted above, MIPPA replaced the 10.6% payment cut that went into effect on July 1 with a 0.5% update extension through December 31, 2008. For calendar year 2009, the update will be 1.1%. This 18-month reprieve will provide time for Congress to work with physicians on developing a long-term solution to a payment system that all agree is fatally flawed.

We continue to be deeply concerned about the impact of the sustainable growth rate (SGR) formula on payments for psychiatric services under the fee schedule. If a long-term solution is not developed, payment reductions in CY 2010 are likely to exceed 20 percent. There is no question that a cut of this magnitude would adversely affect the quality of care and beneficiary access to physicians’ services.

We again urge you to use your discretion to revise the calculation of physician expenditures and to support efforts in Congress to replace the SGR policy. Specifically, we do not think physician expenditures should include the cost of prescription drugs furnished incident to a physician’s service. As you know, drugs administered in a physician’s office are not paid for under the physician fee schedule; including them in the estimates of spending under the fee schedule holds physicians accountable for an expense that is largely outside their control, and one that is rising very rapidly. In addition, we believe that the estimate of physician expenditures should be adjusted to account for increased outlays related to new national coverage decisions. Coverage decisions that expand beneficiary access to advancements in medical diagnosis and treatment should be treated in a manner similar to changes in law and regulation that are expected to affect outlays for physicians’ services. In our view, there is no difference between a change in law that extends Medicare coverage and a change in national coverage policy initiated by CMS.

For our members who care for a significant number of patients over age 65, the flawed SGR formula threatens the financial viability of many of their practices. Current payment rates already fail to recognize adequately the added costs of caring for a frail population with multiple chronic conditions and the additional time that must be given to family members and care givers.

While we do not have evidence of a significant increase in the number of psychiatric practices that have placed limits on new Medicare patients, our members are especially vulnerable to these limitations. We do know that a number of geriatric psychiatry practices are near bankruptcy or have been forced to close. Many other geriatric psychiatrists are actively re-evaluating the financial feasibility of maintaining their geriatric practice. At a time when there is growing evidence of undiagnosed and untreated mental illness in the senior population, the SGR formula will erode access to mental health care for growing numbers of elderly and disabled beneficiaries.

ESRD Provisions

Preventable Healthcare-Acquired Conditions (HAC)

The ESRD section of the proposed rule contains a brief discussion about the potential expansion of CMS’ inpatient hospital-acquired condition (HAC) policy to other payment systems and care settings. AAGP acknowledges the value of the principle behind the inpatient HAC policy. While we agree, in theory, that Medicare should not pay more when conditions arise during an episode of care that could have been prevented through the use of evidence-based guidelines, we are concerned about the implementation of the HAC policy in any other payment systems, such as skilled nursing facilities (SNF), home health agencies, or physician offices. In its discussion in the proposed rule, CMS acknowledges the differences between each payment system and care setting, including the potential for wide variation of HAC candidates, and the “reasonably preventable” nature of each condition when evidence-based guidelines are applied.

We do not think that CMS should move forward with any proposal to expand the HAC principles to other payment systems and care settings until the agency engages in a meaningful dialogue with the physician community. Geriatric psychiatrists have special concerns about the HAC policy because the patient population for which we provide services consists of the frail elderly who are often the most vulnerable. These patients have multiple, chronic conditions, including cognitive and emotional disorders, that make them more likely to experience illnesses, injuries, or medical complications during hospital stays as well as in other care settings, including as SNFs, outpatient departments, and physicians’ offices. CMS should proceed very cautiously in this area. Many healthcare conditions that arise in a variety of healthcare settings are not always preventable, or reasonably preventable, a majority of the time when consideration is given to the vulnerabilities of very frail older patients. AAGP would welcome opportunities to provide input on specific healthcare-acquired condition policies that CMS may be considering.

Physician Quality Reporting Initiative (PQRI)

For 2007, CMS was authorized to pay an incentive payment equal to 1.5 percent of the estimated total allowed charges for all covered professional services furnished during the reporting period beginning on July 1, 2007, and ending on December 31, 2007. The MMSEA (1) extended the PQRI for all of 2008. In the proposed rule, CMS reported that approximately 100,000 professionals (about 16 percent of eligible professionals) submitted PQRI quality data at least once during the 2007 reporting period.

AAGP supports the efforts of CMS to improve the quality of care provided to Medicare beneficiaries and we were pleased to note that MIPPA provides a 2 percent quality reporting bonus for physicians who report on quality measures in 2009 and 2010.

In the proposed rule, CMS notes that it is contemplating a “Physician Compare” web site, similar to those now in place that allow the public to compare the performance of hospitals and other providers. At this time, AAGP is opposed to the release of individual physician data, primarily because the program is still in the early stages of implementation and there is a lack of data on the impact of the PQRI on quality of care and health outcomes. In the proposed rule, CMS indicates that it anticipates making information on the quality of care for services provided by professionals to Medicare beneficiaries publicly available in the future. We encourage a cautious approach that would engage all stakeholders in the development and evaluation of a valid and reliable public reporting system. AAGP would be pleased to join CMS and other stakeholders in addressing these and other critical quality-related issues in the future.

Physician and Nonphysician Practitioner (NPP) Enrollment Issues

Effective Date of Medicare Billing Privileges

Under current policy, physicians are not prohibited from billing Medicare prior to their enrollment in the program. Once enrolled, physicians may retroactively bill the Medicare program for services that were rendered up to 27 months prior to being enrolled to participate in the Medicare program.

CMS is concerned that some physician and NPP organizations and individual practitioners may bill Medicare for services when they are not meeting other program requirements such as those associated with Advance Beneficiary Notices. CMS seeks public comment on two approaches for establishing an effective date for Medicare billing privileges:
· The first approach would establish the initial enrollment date as the date of approval by a Medicare contractor.
· The second approach would establish the initial enrollment date as the later of: (1) the date of filing of a Medicare enrollment application that was subsequently approved by a fee for service (FFS) contractor; or (2) the date an enrolled supplier first started rendering services at a new practice location. The date of filing the enrollment application is the date that the Medicare FFS contractor receives a signed Medicare enrollment application that the Medicare FFS contractor is able to process to approval.

We are opposed to both approaches because they will restrict the ability of new physicians to receive payment for medically necessary services that they provide to Medicare beneficiaries. For geriatric psychiatry, Medicare patients constitute the vast majority of all patients treated in a practice. To expect such practices to be able to pay for their staff and their other operating expenses without a source of income is unreasonable. The existing policies have been in place for many years with the vast majority of physicians providing appropriate care prior to enrollment while meeting all other program requirements. We believe it is unreasonable to expect them to provide care to their patients without the ability to be paid for their services until they are officially enrolled in the Medicare program.

We recommend a simpler and more reasonable alternative to those proposed by CMS. Specifically, CMS could simply shorten the period of time during which retroactive billing is permitted from 27 months to 12 months. This would eliminate the unreasonable administrative burden that the CMS alternatives would place on all new physicians and provide sufficient time for enrollment to occur.


We strongly support the proposed increases in payment for psychiatric services in CY 2009. Regrettably, these increases will be short-lived if the flawed SGR formula is not replaced sometime before CY 2010. We are deeply troubled by the prospect of reduced payment for the services of geriatric psychiatrists at a time when there is evidence that these practices are struggling to remain financially viable. We believe that CMS should take every opportunity to exercise its discretion to expand access to psychiatric services for Medicare beneficiaries. We hope you will join with us in asking Congress to replace the current SGR policy.

We support the efforts of CMS to improve the quality of care provided to Medicare beneficiaries through the PQRI and other programs. We believe that CMS should move very cautiously in considering extension of HAC principles to other payment systems and care settings. Finally, we request a modification of the proposed policy on the effective date of Medicare billing privileges so that geriatric psychiatrists entering practice for the first time will be able to provide care to Medicare beneficiaries and bill for the services they provide pending their official enrollment in the program.

Thank you for this opportunity to comment on the proposed rule.


Christine M. deVries
Chief Executive Officer

(1) Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L. 110–173).