CMS Proposes Changes in Physician Fee Schedule; Title VII Funding Remains Uncertain; Medicare Part D Update

CMS Proposes Changes in Physician Fee Schedule that Would Substantially Increase Payments to Geriatricians; AGS Supports Key Changes

In a move that could significantly increase payments to geriatricians and other physicians caring for Medicare beneficiaries, the Centers for Medicare & Medicaid Services (CMS) in June proposed major changes—including changes the American Geriatrics Society (AGS) has recommended and advocated for—in the Medicare Physician Fee Schedule.

The changes, which could be implemented January 1, 2007, call for the largest increases in payments for evaluation and management (E/M) services since the fee schedule took effect in 1992. The most important change for geriatricians would revise physician work relative value units (RVUs) for E/M services by adopting the recommendations that the Resource-Based Relative Value Scale (RBRVS) Update Committee (RUC) made as part of its 5-year review process. AGS was a key member of the coalition that reviewed the E/M codes and presented them to the RUC. In addition, AGS Board Chair Meghan Gerety, MD, chaired the RUC’s 5-year review committee, which determined the process the RUC used to evaluate the E/M codes.

CMS published the proposed changes in the June 29 Federal Register and is accepting comment on the changes until August 21. In a letter it plans to send to CMS Administrator Mark McClellan before that deadline, AGS will voice its support for key elements of the proposal by endorsing the E/M workgroup recommendations in full, but will recommend changes in a few others. AGS will ask CMS to reconsider a proposed change that would adjust expenditures—to comply with Medicare law limiting spending increases—by reducing the work RVU for each service by 10%. AGS is considering endorsing a different approach to complying with the cap on expenditure increases, such as using a conversion factor, which is a dollar multiplier that turns RVUs into an actual payment amount. AGS views this as a potentially more equitable approach.

AGS urges clinicians to submit comments to CMS supporting the E/M code work values. Up-to-date information on this issue is accessible via AGS Public Policy at https://www.americangeriatrics.org. 

Despite Some Steps Forward, Title VII Geriatrics Health Professions Program Funding Remains Uncertain; AGS Continues Advocacy Work

Despite some promising steps in the right direction, funding for Title VII Geriatrics Health Professions programs is far from a certainty as members of the Senate and House continue to consider—and reconsider—their FY 2007 spending plans. Congress last year eliminated funds for these crucial geriatrics training programs from its FY 2006 budget, with devastating results.

In early June, thanks in large part to the efforts of members of AGS and of the Association of Directors of Geriatric Academic Programs (ADGAP), the House Appropriations Committee earmarked $31.5 million for the programs in its 2007 spending proposal. That amount would restore funding for the programs to 2005 levels. Days later, however, the House leadership delayed a full vote on the Appropriations plan after a contentious amendment to increase the minimum wage was added to the legislation. Washington insiders speculate that the House may not vote on the bill until after the November elections.

Also in June, Senate appropriations subcommittees approved $5 billion more for health, education, and labor programs than the President’s proposed spending plan did. This, however, was $2 billion less than the Senate budget resolution originally earmarked for these programs. Whether the new figure will allow for restoration of Title VII geriatrics funds remains unclear. In mid-July, as this issue of Annals of Long-Term Care went to press, the Senate was expected to “mark up,” or review the wording of the budget proposal, before its August recess.

AGS continues to encourage members to advocate for restoration of Title VII geriatrics program funding. In addition, AGS staff, and Title VII grantees are participating in ongoing meetings with key legislators in the House and Senate. Ultimately, the full House and Senate must agree on allocations for Title VII geriatrics professions and other programs. In some cases, final funding decisions may not be made until December.

Medicare Prescription Drug Benefit Update

In an effort to encourage low-income Medicare beneficiaries who lack drug coverage to enroll in a Medicare prescription drug plan, the Bush Administration in June launched an enrollment campaign that has involved, among other things, mailing drug benefit applications to an estimated 500,000 older adults. The mailings have targeted adults age 79 and older, seniors in low-income neighborhoods, Latinos, and those who have disabilities or don’t handle their own financial affairs.

According to CMS, 38.7 million of the nation’s 42.5 million Medicare beneficiaries have drug coverage of one kind or another. About three-quarters of the roughly 4 million who lack coverage have low incomes and would likely qualify for extra financial assistance with premiums and other costs, CMS estimates.

Whether Congress will waive late-enrollment penalties for most older adults who missed the initial May 15 enrollment deadline remains to be seen, but pundits predict that, during this, an election year, lawmakers up for reelection may feel pressured to defer the penalty.

Under current policy, many Medicare beneficiaries who missed the initial deadline face higher premiums once they enroll. Low-income beneficiaries who meet certain financial criteria, however, do not face increased costs. The next general enrollment period begins November 15.

Early this summer, Capitol insiders predicted that efforts to waive the penalty would likely gain momentum as the elections near.

At the same time, CMS began reporting its efforts to oversee Medicare drug plan providers. CMS estimated that it had sanctioned plans for failing to meet customer service, marketing, and other standards more than 1000 times this year. Agency officials reported sending more than 650 warning letters and ordering insurers to submit plans for service improvements over 300 times. The agency also reported that it had imposed more serious sanctions—temporary restrictions on marketing prescription drug plans via CMS’ Web-based “plan finder”—75 times. In early July, it was considering removing one insurer, America’s Health Choice of Florida, from the program for continued “marketing violations,” according to Congressional Quarterly.