Medicare Program; Proposed Revisions to Payment Policies Under the Physician Fee Schedule, Aug 2007

Published Sunday, March 8, 2009 7:00 am

Mr. Herb B. Kuhn
Acting Administrator
Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-1385-P
P.O. Box 8018
Baltimore, MD 21244-8018

Dear Mr. Kuhn:

We are pleased to submit these comments on the proposed rule for Revisions to Payment Policies under the Physician Fee Schedule for Calendar Year 2008 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 will address the proposed increase in work RVUs for certain nursing facility codes and the proposed conversion factor update for 2008.

Proposed Work RVUs for Nursing Facility Services

CMS proposes to accept the recommendations of the AMA’s Specialty Society Relative Value Update Committee (RUC) for the seven codes that describe initial nursing facility care, subsequent nursing facility care and an annual nursing facility assessment (CPT codes 99304-99310). We strongly support the proposed changes, which are consistent with our position that the physician work of nursing home care has increased as the acuity and complexity of the nursing home patients and the regulatory burden associated with their care has increased.

AAGP participated in the survey that resulted in RUC recommendations for increased work RVUs for all the codes in this family. Our analysis indicates that if the conversion factor does not change in 2008, the payments for these services will increase by more than $164 million over what they would have
been absent these changes. We wish to express our appreciation to the RUC and to the CMS staff who worked closely with us and with the other physician groups whose members provide care to this vulnerable population. The timing of the changes in the nursing facility codes and the 5-year review cycle required special consideration without which the necessary changes in work RVUs would not have occurred.

Proposed Conversion Factor Update for 2008

Ironically, the appropriate changes in payment for nursing facility care described above will be largely wiped out by the proposed -9.9 percent update of the conversion factor for 2008. We continue to be deeply concerned about the impact of the sustainable growth rate (SGR) formula on payments for nursing facility care and all the psychiatric services under the fee schedule. We believe if a reduction of this magnitude is put into place, the quality of care and beneficiary access to physicians’ services will be adversely affected. 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 psychiatry, a negative update to the fee schedule and other changes in work and practice expense relative value units (RVUs) would result in a 10 percent reduction in total Medicare payments for the specialty in 2008. This cut comes in the face of forecasted increases in practice costs. For our members who predominantly care for patients over age 65, these payment policies are likely to threaten 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, these policies are likely to erode access to mental health care for growing numbers of elderly and disabled beneficiaries.


We strongly support the proposed increases in work RVUs for nursing facility care. Regrettably, these increases will do little to overcome a proposed 9.9 percent across the board cut in payment for these and all other services we provide. In sum, the payment policies for the Medicare Physician Fee Schedule combined with the limited and discriminatory Medicare benefit for mental illness care can further burden Medicare beneficiaries and jeopardize their access to effective treatment. 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 reconsider your options for updating the fee schedule and will join with us in asking Congress to replace the current SGR policy.

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


Gary Moak, MD