MEDICARE PHYSICIAN FEE SCHEDULE, ASSISTANCE FOR MEDICARE PART D, PART B PREMIUM SURCHARGE, OLDER AMERICANS ACT, PAY FOR PERFORMA

CMS’ Final Physician Fee Rule Calls for Higher Payments for Evaluation and Management Services, But Also for Overall 5.0% Fee Cut, Starting January 1

Payments for the evaluation and management services physicians provide Medicare beneficiaries will increase significantly, but, overall, Medicare fees to physicians will drop 5.0% starting January 1, under the final Medicare Physician Fee Schedule rule the Centers for Medicare & Medicaid Services (CMS) issued November 1. The American Geriatrics Society (AGS) strongly supports the increase in payments for evaluation and management services. It continues, however, to urge Congress to block the 5% across-the-board fee cut, which would essentially negate the evaluation and management payment increase. The House and Senate have the authority to prevent the cut, which Medicare’s Sustainable Growth Rate (SGR) formula mandates whenever growth in these expenditures outpaces growth in Gross Domestic Product. In early November, when this issue of Annals of Long-Term Care went to press, Congress was on its mid-year election recess and had yet to act on the pending cut. The SGR has mandated physician fee cuts since 2002, but Congress has blocked the cuts since 2003.

CMS’ final physician fee schedule rule is posted at https://www.cms.gov.

Medicare Prescription Drug Plan Open Enrollment Period Ends December 31; CMS, Other Organizations, Offer Assistance in Finding Plans, Financial Help

Medicare beneficiaries who want to enroll in a Medicare prescription drug plan for the first time in 2007, and those who wish to change plans next year, have until December 31 to do so. Open enrollment, which started November 15, ends the last day of 2006.

There will be more Medicare drug plans in 2007 than in 2006, according to CMS, which reported that the number of companies offering plans nationwide would jump from 9 to 17. The average monthly premium will be roughly $24 next year, approximately what it is this year, the agency estimates.

The “donut hole”—the coverage gap found in most Medicare prescription drug plans—will be $250 wider in 2007, however. And, according to a November report from the advocacy group Families USA, drug plans that don’t include a significant coverage gap will be harder to find and will charge significantly higher premiums in 2007 than in 2006. To help beneficiaries compare and choose plans, CMS has added several new tools to its website, including an updated, enhanced version of CMS’ “Medicare Prescription Drug Finder,” (visit www.medicare.gov, then click on “Compare Medicare Prescription Drug Plans”) and “Medicare Options Compare”. Beneficiaries with limited incomes and resources can also apply for federal “Extra Help” with Medicare prescription drug plan costs more easily this year, by logging onto the National Council on Aging’s “BenefitsCheckUp” website (at https://www.benefitscheckup.org/). The site streamlines the application process. Those qualifying for Extra Help do not face a coverage gap and pay lower premiums, copays, and deductibles.

Higher-Income Medicare Beneficiaries Face Part B Premium Surcharge in 2007

For the first time, Medicare beneficiaries with higher incomes will have to pay a Part B premium surcharge in 2007.

The basic premium for Medicare Part B—which covers doctors’ services, medical tests, and outpatient hospital care—will rise $5 to $93.50 per month next year, CMS announced recently. In addition, higher income beneficiaries can expect to pay an additional Part B surcharge, ranging from $12.50 to $68.60 monthly, depending on their incomes. The surcharge will apply to individuals with incomes exceeding $80,000 and couples earning more than $160,000. It will be phased in over three years and will increase in coming years.

Critics of the surcharge—the first since the benefit was established—have expressed concern that it will prompt wealthier older adults to drop out of Medicare, leaving the program to serve poorer constituents and, as a result, rendering it a more likely target for funding cuts. The surcharge was mandated by 2003 Medicare legislation.

President Signs Older Americans Act, in Keeping With Key White House Conference on Aging Recommendation

In a major victory for older adults and their advocates, President Bush signed legislation October 17th reauthorizing the Older Americans Act (OAA). Among other things, the OAA provides support and funding for senior center services, meals, transportation, and home care for older adults, and caregiver support for those caring for older people. The House and Senate unanimously approved the reauthorization of the act.

One of the key resolutions of the 2005 White House Conference on Aging (WHCoA)—to which AGS sent more than three dozen delegates—called for reauthorization of the act. The Conference’s final report, released in September, includes additional resolutions that, among other things, call on the President and Congress to address the growing shortage of geriatrics healthcare professionals, and to support efforts to better coordinate care for older adults who need care in a variety of settings.

CMS to Launch New Pay-for-Performance Demonstration Program in Solo, Small, and Medium-Sized Physician Practices Next Year

CMS will launch a new pay-for-performance (P4P) demonstration project involving physicians in solo, small, and medium-sized practices in 2007, the agency announced in October.

AGS was heavily involved in the legislation authorizing the program—which is based, in part, on the Geriatric Care Act—and worked to emphasize the chronic care focus of the demonstration.

Efforts to make P4P policy—which offers financial incentives to healthcare providers meeting certain quality measures or standards—part of Medicare are gaining ground in Washington. CMS has already launched P4P demonstration projects in hospitals and ten large group practices, and last January launched its nationwide Physician Voluntary Reporting Program (PVRP) demonstration. The PVRP offers physicians who voluntarily report quality data feedback, but no additional pay, in return. AGS supports P4P programs that recognize the unique healthcare needs of older adults.

The new demonstration project, the Medicare Care Management Performance (MCMP) Demonstration will include roughly 800 physician practices in four states: Arkansas, California, Massachusetts, and Utah. Participating physicians will submit data annually on as many as 26 quality measures related to both the care of patients with diabetes, congestive heart failure, or coronary artery disease, and to the provision of preventive health services to high-risk patients with a range of chronic diseases. CMS will continue to pay participating physician groups on a fee-for-service basis. In the program’s first year, however, physicians will receive additional payments for reporting quality data. In subsequent years, incentives will be based on performance, and participating practices will be eligible for an annual incentive of up to $10,000 per physician and up to $50,000 per practice.

AGS will continue to support other P4P demonstration projects and initiatives aimed at ensuring high-quality healthcare for older adults.